LexTHE AGGARWAL CHAMBER OF COMMERCE, LTD. versus M/S. GANPAT RAI HIRA LAL
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I 938 SUPREME COURT REPORTS (1958] 1957 the work given to him? We have referred to the Nohirta Ram circumstances in which the appellant refused to do v. work in the Public Health Section to which he was The Ulfion. of India allotted; he did not work from October 13, 1952 and s. K.Das1. got no pay from November, 1952. The appellant has to thank himself for the predicament in which he is placed. All that we can say is that if he had shown patience, good sense and moderation, he could have avoided. a great part of the trouble he brought on him- self. 1957 Novtmbtr, 11. In the result, both appeals fail and are dismissed with costs; as the appeals were heard together there will be one hearing fee to be shared by the respon- dents in the two appeals. Appeals dismissed. THE AGGARWAL CHAMBER OF COMMERCE, LTD. 'V. M/s. GANPAT RAI HIRA LAL (B. P. SrNHA and J. L. KAPUR JJ.) Income-tax-Assessment of agent in respect of profits held fO'r non-resident principal-Agent's right to claim deduction for payment made-Ultimate liability of princi- pal to income-tu on basis of his world income, if a relevant consideraticn--Indian Income-tax Act, (XI of 1922), ss. 40 (2)' 42 (1). . The appellant company and the respondent firm were carrying on business in the erstwhile Patiala State, and were non-residents in British India. The appellant, ·acting as commission agent for the respondent, entered into several forward transactions with a Hapur firm of commis- .sion agents. The profits accruing on these transactions amounted to Rs. 29,275-2-6 on which the Hapur firm paid .a swn of Rs. 9,314-13-4 as income-tax. In 1943 the appellant was ordered to be wound up and the respondent was placed ·on the list of contributories. The Official Liquidator applied to the Liquidation Judge for a payment order for a sum which included the amount of income-tax paid by the Hapur firm for and on behalf of the respondent. The main -eontention raised on behalf of the respondent was that it 'had no taxable income in the year in dispute and was not liable to pay any income-tax and that, consequently, it was 11ot liable for the income-tax paid by the Hapur firm. S.C.R. SUPREME COURT REPORTS 939 Held, that the Liquidator was entitled to claim from the respondent the amount of income-tax paid by the Hapur firm irrespective of the consideration whether its world income was taxable or not. Under the law the Hapur firm was an agent of the respondent for the business of the agency which was entrusted to it, and was as such liable under ss. 40(2) and 42 (1) Income-tax Actt as an assessee for income-tax on the profits made on tne respondent's transactions at Hapur and was entitled to retain the esti- mated amount of income-tax payable on the amount of the respondent's profits. As the Hapur firm had rightly paid the tax on the profits, the respondent could not be allowed to challenge the liability on the ground that his total world income was not taxable and he was entitled to his profits without deductions. That was a question which must be agitated by the non-resident assessee at the time of his :assessment. As between the parties the tax; paid by the agent had to be taken into account irrespective of the result of the assessment on the non-resident. C1v1L APPELLATE JURISDICTION: Civil Appeal No. 79 of 1954. Appeal from the judgment and order dated .March 10, 1953, of the former Pepsu High Court in Letters Patent Appeal No. 493 of Samvat 2005 arising out of the judgment and order dated January 18, 1949, of the said High Court in E. As. Nos. 78-96 of Samvat :2001. Naunit Lal, for the appellants. Mohan Behari Lal, for the respondents. 1957. November 11. The following Judgment of the Court was delivered by. KAPUR J.-This is an appeal brought pursuant to a certificate under Art. 133 ( 1) ( c) of the .Constitution irom the judgement and order of the Division Bench of the erstwhile Pepsu High Court pronounced on March 10, 1953, modifying in appeal the order of the Liquidation Judge. The facts are fully recited in the judgments of the courts below and comparatively a brief recital will be sufficient for the purpose of this judgment. The appellant company was incorporated in 1934 under the Companies Act of the erstwhile Patiala State. ·It carried on the business of commission agency for deal- ing in forward transactions in various kinds of grain 195'7 __., The Aggarwal Chamber of Commtrce
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