TMI Blog1965 (9) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent. on the net annual profits with a minimum payment in the absence or inadequacy of profits of ₹ 1,500 per month from the date of commencement of the business by the company. On June 15, 1953, the assessee wrote to the company confirming the resolution of the latter nominating Chevalier J.L.P. Roche Victoria as its ex-officio director on behalf of the managing agents and intimating that thereby they authorised Roche Victoria to draw the managing agency allowance of ₹ 1,000 per month for his expenses to attend to all the matters relating to the managing agency affairs on behalf of the assessee. During the accounting year ended on June 30, 1959, the assessee credited the sum of ₹ 12,000 in its books as managing agency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is court should reframe the question in such a way as to include the tenability of the assessee's claim to deduction under section 10(2)(xv). We think that learned counsel is right on that aspect. But, before we consider it, we shall first see whether the sum could be regarded as income in the hands of the assessee. As we mentioned, the articles of association clearly provided for the remuneration for the assessee as the managing agents of the company, which include the sum of ₹ 12,000 which was payable at the rate of ₹ 1,000 per month as office allowance. Though the amount was received by Roche Victoria directly from the company, that was pursuant to the direction of the assessee in its letter dated June 15, 1953. We thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that the sum of ₹ 12,000 which was paid by the company directly to Roche Victoria is expenditure laid out and in the circumstances will be regarded as actually paid by the assessee. Actually paid in sub-section (5), in our view, is not to be understood in a physical sense, but in the sense that the expenditure is actually incurred. When it is found that Roche Victoria acted for the assessee in its capacity as the managing agent and discharged its duties, he was entitled to remuneration. It is true there was no agreement in writing providing for remuneration. But there is sufficient indication in the letter of the assessee dated June 15, 1953, that there was an implied understanding between the assessee and J.L.P. Roche Victori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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