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1965 (3) TMI 25 - SC - Income TaxWhether in determining the 'smallness of profits' made by the applicant for the purpose of section 23A, the Tribunal correctly included the commission of ₹ 41,842 and ₹ 1,16,690 in the applicant's profits of the accounting periods ended 31st March, 1952, and 31st March, 1953, respectively ? and Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the orders under section 23A ? Held that:- It follows that the Income-tax Officer, in proceedings under section 23A, must determine commercial profits. In proceedings under section 23 he is not concerned with this. There he is concerned with assessable income or profits. Therefore, it is difficult to appreciate why a finding in the assessment order that a particular income is assessable income or profits necessarily means that that assessable income must form part of the accounting profits. It seems to us that the Appellate Assistant Commissioner was right in going into the question and holding that under the managing agency agreement the assessee-company did not have any right to receive the commission till the general meeting of the managed company was held and, therefore, it could not form part of its accounting profits. We accordingly accept the appeals, set aside the order of the High Court and remand the cases back to the High Court to dispose of the reference in accordance with law and in the light of this judgment.
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