Judgment

SHAH, J. : These appeals relate to Excess Profits Tax liability of the appellants in respect of two chargeable accounting periods April 1, 1944 to March 31, 1945 and April 1, 1945 to March 31, 1946.

2. The appellants were under an agreement dated July 11, 1945, appointed managing agents for 20 years of the Coimbatore Spinning and Weaving Co., Ltd. - hereinafter referred to as the company. Prior to October 1, 1944, the appellants were the Managing Agents of the Coimbatore Mills Agency Ltd.- hereinafter referred to as the Agency Company who were the Managing Agents of the company. The year of account of the appellants ended on March 31, of the company on June 30, and of the Agency Company on September 30. Under the agreement by which the appellants were appointed managing agents, the following remuneration was provided :

1. Office allowance at Rs. 1,500/- per mensem;

2. Commission at 1% on all purchases of cotton and stores and 2 1/2% on all capital expenditure incurred from time to time; and

3. Commission at 10% on the net profits of the company due and payable yearly immediately after the accounts of the company were closed.

3. For the assessment year 1945-46, the appellants su