Law:

Section:

Section 4 read with section 2(1) and 17 of the Excess Profits Tax Act, 1940 - Change of Tax - Accounting periods 1-7-1941 to 30-6-1946 - Assessee was managing agent of 'S' company - Under terms of agreement remuneration to assessee was payable by way of commission at rate of 10 per cent on annual net profit of 'S' after making all proper allowance and deduction - Ships of 'S' were requisitioned by Government was to make payments to 'S' at provisional rates - Accordingly in addition to yearly payments at ad hoc rates a sum was paid by Government to 'S' during period 1-7-1945 to 30-6-1946, when ships were derequisitioned and final payment on account of hire and compensation was made during year 1947-48 - Excess profit-tax Officer while passing assessment order took into account actual amount received and added thereto estimated receipt of certain sum for subsequent four accounting periods and assessment orders were passed on same footing - Appeals by assessee for said accounting periods were disposed by AAC accordingly - Subsequent to disposal of matter by AAC further amounts that were expected from Government were actually received by 'S' Company - AAC took view that in view of deductions which had then been allowed to 'S' company in respect of Commission payable to assessee for various accounting periods, assessee's own excess profits tax assessments would be liable to enhancement and accordingly he passed order of enhancement for each accounting periods - Whether by time when appeals were disposed of by AAC, as actual future amounts were received by managed company and they were apportioned during various chargeable accounting periods of managed company, right of assessee to receive managing agency commission was crystallised and on basis of such a right which had already accrued to assessee during each of respective chargeable accounting periods, he was entitled to determine correct amount of excess profits tax payable - Held, yes - Whether, therefore, in four accounting periods managing agency commission to be included in excess profit tax assessment was amount an determined by AAC - Held, yes - From mere fact that having regard to terms of managing agency…

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