QAMAR SHAFFI TYABJI vs THE COMMISSIONER, EXCESS PROFITS TAX,HYDERABAD

The Supreme Court held that the appellant, appointed as managing agent and selling agent under agreements with the Trustees of the Industrial Trust Fund, was not an employee but an agent of the principal as per Section 194 of the Indian Contract Act, 1872. The Court clarified that the appellant was conducting his own business, thus his remuneration and commission were subject to excess profits tax. The assessment of the appellant to excess profits tax was upheld, affirming the nature of his income as taxable.