THE STATE OF MADHYA PRADESH vs BINOD MILLS COMPANY LTD.

The Supreme Court held that under the Gwalior War Profits Tax Ordinance, Samvat 2001, specifically proviso (b) to rule 4(1) of Schedule 1, remuneration paid to managing agents can be deducted from a company's profits even if the managing agents hold a controlling interest. The Court clarified that the managing agents' obligation to include this remuneration in their assessable profits is not contingent on the assessing authority's actions. Thus, the company was entitled to deduct the managing agents' remuneration in computing its profits for War Profits Tax purposes.