Judgement

Appeal (No. 41 of 1947) from a judgment of the High Court (March 27, 1945) given on the reference of a question of law made to the court under s. 66, sub-s. 1 of the Indian Income-tax Act by the Appellate Tribunal.

The following facts are taken from the judgment of the Judicial Committee. The assessee, at all material times, was the managing agent of Marsland Price and Company, Ld. (hereinafter called "the principal company"), under an agreement dated February 1, 1926, and made between the principal company of the one part and the assessee (by its then name of the Tata Construction Company, Ld.) of the other part. The remuneration of the assessee was regulated by cl. 2 of the agreement, and under sub-cl. (b) the assessee was entitled to "A commission at the rate of ten per cent, per annum oh " the annual net profits of the principal company after making "all proper allowances and deductions from revenue for " working expenses chargeable against profits but without " making any deduction for depreciation or in respect of any " amount carried to reserve or sinking fund or any payment " on account of super-tax or any deduction for expenditure " on capital account provided th