Contracts Cases

9793 Words Jan 30th, 2013 40 Pages
1. Lakshminarayan Ram Gopal and Son Ltd V. The Government of Hyderabad, AIR 1954 SC 364
An Agency agreement was entered into between the Mills Company and the appellants appointing the appellants it’s Agents for a period of 30 years. The appellants throughout worked only as the Agents of the Mills Company and for the Fasli years 1351 and 1352 they received their remuneration under the terms of the Agency agreement. Notice was sent to the appellants to pay the amount of tax appertaining to these chargeable accounting periods. The appellants submitted their accounts and contended that the remuneration received by them from the Mills Company was not taxable on the ground that it is was not income, profits or gains from business and
…show more content…
4. The remuneration by way of commission of 2 1/2 per cent. of the amount of sale proceeds of the produce of the Company savoured more of the remuneration given by a principal to his agent in the carrying out of the general management of the business of the principals than of wages or salary which would not normally be on such a basis. 5. All these circumstances together with the power of sub-delegation go to establish that the appellants were the agents of the Company and not merely the servants of the Company remunerated by wages or salary. 6. The objects of the appellants in this case inter alia were to act as agents for Governments or Authorities or for any bankers, manufacturers, merchants, shippers, Joint Stock Companies and others and carry on all kinds of agency business. This object standing by itself would comprise within its ambit the activities of the appellants as the agents of the Company and constitute the work which they did by way of general management of the business of the company an agency business. Apart however from this there is the further fact that there was a continuity of operations which constituted the activities of

More about Contracts Cases

Open Document