JUDGEMENT

Appeal (No. 46 of 1936) from a judgment of the High Court (March 27, 1935) upon a reference made under s. 66, sub-s. 2, of the Indian Income-tax Act, 1922.

The appellant company, Tata Hydro-Electric Agencies, Ld., Bombay, were a private limited company who carried on business as the managing agents of the Tata Power Co., Ld., and of three other electric power companies in India. The questions referred to the High Court arose in the course of the assessment of the income of the appellants for the year of assessment ending on March 31, 1934, and were as follows —

" (1.) Whether in the circumstances of the case and in view of the provisions of s. 4, sub-s. 1, and s. 10 of the Act, the assessee company has been correctly assessed on the total amount of Rs.5,17,288 received by it as profits and gains of the business carried on by it as the managing agents of the Tata Power Co., Ld.

(2.) Whether under the provisions of s. 10 of the Act or under any other provisions thereof, the assessee company is entitled to have a deduction from the said profits and gains amounting to Rs.5,17,288 to the extent of Rs. 1,29,322 paid by it to certain parties under the agreements, exhibits F and