HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Lakshminarayan Ram Gopal and Son Ltd. v. The Government of Hyderabad
Civil Appeals Nos. 292 and 312 of 1950
[1955] 1 SCR 393 ·
Hyderabad Excess Profits Tax Regulation sections 2(4), 13, 48
Sources & disclosures includedDownload original judgment / order
3-judge bench · S.R. Das J. · N.H. Bhagwati J. · Jagannadhadas J.
Assessment years: 1351 and 1352 Fasli chargeable accounting periods
01 · Facts of the case
The company managed Dewan Bahadur Ramgopal Mills under a thirty-year agency agreement, receiving commission on sales and reimbursement of expenses. It managed only that mill and claimed its remuneration was salary or service income rather than business profits subject to Hyderabad excess profits tax.
02 · Discussion by the Hon’ble Court
General board supervision did not confer the detailed control over how work was performed characteristic of a master-servant relationship. Broad contracting and staffing powers, delegation, assignability, tenure and commission supported agency. Agency alone was not enough: the continuous management operations, corporate objects and services also established business. Serving only one principal did not prevent the activity from being business. Corporate objects were relevant but not conclusive.
03 · Judicial decision
Both appeals dismissed with costs. The management remuneration was business income and the excess profits tax assessments were sustained.
04 · Outcome / in whose favour
Revenue.
05 · AKHB REVIEW POINT
Review contractual powers and actual continuity of operations rather than relying on a service label or the number of clients. Distinguish agency status from the separate conclusion that the activities amount to business.
Source & verification
Download original judgment / order · Open cited source rendition
Complete 16-page primary Supreme Court Reports scan. Adjoining report fragments, where present, are retained in the exact original; only the identified case is analysed.
Statutory scope
Historical predecessor legislation and the provisions expressly identified in this note. This is not a decision applying the Income-tax Act, 1961 or the Income-tax Act, 2025; verify any modern-law comparison independently.
Later treatment
Source checked 2026-10-23. Subsequent treatment and current-law applicability have not been comprehensively checked.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from an identified primary report. Independent human review is not represented.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court’s holding. No current-law clearance is claimed.