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Vithaldas Thakordas And Co. vs Commissioner Of Income-Tax on 8 October, 1946 cites

The Indian Radio And Cable ... vs The Commissioner Of Income Tax, Bombay ... on 8 April, 1937

17. It has been further contended by Mr. Setalvad that the agreement between Bai Tarabai and the partners of the firm is in the nature of a joint adventure or a quasi partnership and, therefore, what Bai Tarabai and the partners of the firm are doing are really sharing the real profits of the firm. Emphasis has been laid on the remarks of Lord Maugham in delivering the judgment of the Judicial Committee in Indian Radio & Cable Communications Company v. Commissioner of Income-tax, Bombay (1937) 39 Bom. L.R. 1025, P.C.. In that case the assessee company agreed to pay one-half of its net profits to another company in consideration of certain advantages to be received by the assessee company from the other company. The assessee company contended that the payment of share of the net profits was in the nature of rent and, therefore, it was entitled to deduct it from its net profits. The contention of the assessee company was rejected by the Privy Council. Lord Maugham pointed out that the one-half share of the profits was made payable as part of the consideration in respect of a number of different advantages which the assessees derived from the agreement and not all of them was shown to be of a purely temporary character and, therefore, the Privy Council came to the conclusion that the agreement as a whole was much more like one for a joint adventure for a term of years between the assessee company and the other company.
Bombay High Court Cites 6 - Cited by 14 - Full Document

British Sugar Manufacturers, Ltd. vs Harris (Inspector Of Taxes). on 16 December, 1937

15. The observation of Lord Macmillan in the Pondicherry case was again considered in British Sugar Manufacturers, Ltd. v. Harris. (1937) 7 I.T.R. 101 In this case a company carrying on a manufacturing business agreed with two other companies to pay them a stated percentage of its net profits. "Net profits" were to be ascertained after payment of all expenses of the company and after providing for interest on debentures, but before making any provisions for depreciation. The Court of Appeal held that in computing its profits for the purposes of income-tax, the company was entitled to deduct the sums so paid as being "money wholly and exclusively laid out or expended for the purposes of the trade". Lord Greene, the Master of the Rolls, pointed out that the "net profits" were to be arrived at upon a conventional basis, not the basis upon which the company would ascertain its profits for commercial purposes or the basis upon which it would ascertain its profits for income-tax purposes; and the percentage was to be paid out of these conventional profits and not the profits which were liable to tax. In the case before us also Bai Tarabai receives two annas in the rupee out of a fund which, although described as net profits, is really an artificial fund ascertained for the purpose of giving to Bai Tarabai her share under the agreement. The Master of the Rolls also appreciated the difficulty of distinguishing cases which are for a payment of a share of profits simpliciter and a payment of remuneration which is deductible in truth before the profits divisible are ascertained; and he confesses that the line between these two classes of cases was very difficult to draw.
Calcutta High Court Cites 1 - Cited by 39 - Full Document

Commissioner Of Income-Tax, Bombay ... vs Tata Sons Ltd. on 4 November, 1938

On the other hand, this High Court in Commissioner of Income-tax, Bombay v. Tata Sons, Limited, (1938) 41 Bom. L.R. 362 held that the payment to a financier of the share of the commission earned by Tata Sons, Limited, in order to obtain finance for the purposes of financing the Tata Iron and Steel Company, Limited, was an expenditure incurred by the assessees solely for the purposes of earning their profits and was a permissible deduction.
Bombay High Court Cites 10 - Cited by 8 - Full Document

Tata Hydro-Electric Agencies, Ltd. vs Commissioner Of Income-Tax, Bombay. on 27 March, 1935

19. Finally it was argued by Mr. Setalvad that the amount paid by the partnership firm to Bai Tarabai is not an expenditure expended wholly and exclusively for the purposes of the business. It is urged that this amount was not paid for the purposes of producing profits in the conduct of the business, but was paid in order to acquire the right to conduct the business in the particular name. It is not possible to accept this contention. The name in which a business is carried on is an important factor and the reason why the partnership paid for the goodwill was in order to attract more customers and earn more profits. The observations in the judgment delivered by Lord Macmillan in the Tata Hydro-Electric Agencies, Ltd., Bombay v. Commissioner of Income-tax, Bombay, (1937) 89 Bom. L.R. 775, P.C. must be read in the light of the facts found in that case; he said (p. 781) :
Bombay High Court Cites 1 - Cited by 17 - Full Document

The Pondicherry Railway Company Ltd. vs The Commissioner Of Income-Tax on 26 March, 1931

Sir John Beaumont frankly confessed that in the past he had wrongly understood the principle of the Pondicherry case; but the subsequent decisions had made the position clear. He observes that the question whether the payment of part of a commission to a third person can be regarded as expenditure incurred solely for the purpose of earning that commission is a question which must be answered on the facts of each case and on a commercial basis.
Bombay High Court Cites 9 - Cited by 78 - Full Document
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