Judgment

KAPUR, J. : These are two appeals against two judgments and orders of the High Court of Bombay on two References made by the Income-tax Appellate Tribunal. The appellant in both the appeals is the Commissioner of Income-tax and in C. A. 162 of 1958, the respondent is the assessee Chamanlal Mangaldas and Co., a registered firm, who are the Managing Agents of Girdhardas Harivallavdas Mills Ltd., Ahmedabad and in C. A. 210 of 1953, the respondent is Mangaldas Girdhar Das Parekh Ltd., a private limited company, which is the Managing Agent of Rajnagar Spinning Weaving and Manufacturing Co. Ltd., Ahmedabad. The respondents in the two appeals will in the judgment be called the Managing Agents and the Company of which they are the Managing Agents will be referred to as the Managed Company.

2. In C. A. 162 of 1958 the Managing Agents were appointed by an agreement dated September 7, 1940, under which they were to receive from the Managed Company a commission at the rate of 3 1/2 per cent on the sale price of all cotton yarn and cotton cloth manufactured and sold by the Company and a commission of 3 1/2 per cent on the sale proceeds of all material yarn and fabrics manufactured from w