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TMI Blog2019 (3) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... r Respondent. P.C. : 1. The revenue has filed this Income Tax Appeal challenging the judgment of Income Tax Appellate Tribunal. Following question is presented for our consideration: "Whether on the facts and circumstances of the case and in law the Hon'ble ITAT was justified in deleting the addition made on account of compensation received on termination of contract to the tune of Rs. 2.25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) (c) of the Income Tax Act, 1961 (for short 'the Act'). 3. CIT (A) allowed the Assessee's Appeal holding that there was no principal agent relationship between the parties and the contract was on principal to principal basis and therefore section 28(ii)(c) would not apply. In further Appeal by the revenue, the tribunal confirmed the view of the CIT Appeals, interalia holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy in connection with the termination of the agency or the modification of the terms and conditions relating thereto, chargeable as profits and gains of business and profession. The essential requirement for application of section would therefore be that there was a co-relation of agency principal between the assessee and the US based company. In the present case the CIT (A) and the tribunal have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties. The true character of the relationship from the agreement would have to be gathered from reading the document as a whole. This Court in case of Daruvala Bros. (P). Ltd. Vs. Commissioner of Income-Tax (Central), Bombay, reported in (1971) 80 ITR 213 had found that the agreement made between the parties, was of sole distribution and the agent was acting on his behalf and not on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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