THE COMMISSIONER OF INCOME-TAX,BOMBAY NORTH & OTHERS. vs M/S. HARIVALLABHDAS KALIDAS AND CO.,

The Supreme Court held that the Managing Agents of Shri Ambika Mills Ltd. did not voluntarily relinquish any portion of their commission by agreeing to a reduced rate of 3% instead of 5% for the year ending December 31, 1950. The Court clarified that the commission did not accrue until the end of the year, as per the Managing Agency Agreement, and thus, the income-tax authorities' assessment was incorrect. The ruling emphasized that the modification of the agreement did not constitute a relinquishment of accrued income for tax purposes.