Law: Income Tax Act, 1922

Section: 34(1),secondproviso,43

Income-tax Act, 1922 -Section 34(1) second proviso Section 43 -- Non-resident -Agent -Business connection -Assessee entered into agreement with a non-resident for exploitation of his picture in Pakistan under certain conditions -Non-resident actively associated at every stage of new exploitation of picture -Assessee whether can be treated as agent of non-resident -Held yes -Whether business connection existed -Held yes -- Assessee appointed as distributor of Film belonging to non-resident -Exploitation through different exhibitors with previous approval of non-resident -Income from various transactions lasting for over five years -Assessee held, to be agent of non-resident because of his "business connections" -- Bar of limitation -Not applicable to an assessment made in consequence of appellate order -- Corresponding Sections: Income-tax Ordinance, 1979 -Section 78(3) -- ORDER {The order was passed by NUR ILAHI, President}.---These three appeals by one and the same assessee involve the charge years 1955-56, 1956-57 and 1958-59 and more or less common grounds, we will, therefore, be disposing them of by this one and the same order. 2. The assessee carries on its business of Film distribution under the name and style of M/s. E. Its activities income wherefrom is the subject matter of these appeals were that on 14th June 1953 it entered into an agreement with one K a non-resident for the distribution of film B which belonged to the non-resident, on commission basis. Net earnings were to be shared by the non-resident and the assessee in the ratio of 80% and 20% respectively. The picture was to be obtained from M/s. R Pictures of Karachi, an agent of the non-resident. The positives and the negatives were to remain the property of the non-resident. Full and honest accounts of earnings were to be submitted to the non-resident, and exploitation of the picture by the exhibitors was also to be with the concurrence of the non-resident. The agreement containing these stipulations was held to establish a business connection between the non-resident and the assessee, and accordingly income accruing from the exploitation of the picture was brought to tax for the three years…

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