HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Delhi v. Delhi Flour Mills Co. Ltd.
Civil Appeal No. 211 of 1955
[1959] Supp. 1 SCR 28 ·
Excess Profits Tax Act, 1940 · Managing-agency agreement of 1936
Sources & disclosures includedDownload original judgment / order
3-judge bench · T. L. Venkatarama Aiyar · P. B. Gajendragadkar · A. K. Sarkar
01 · Facts of the case
The company promised its managing agents fixed monthly remuneration plus ten per cent of annual net profits, after specified expenses and before reserves. The excess-profits-tax assessment required deciding whether that tax reduced the contractual commission base.
02 · Discussion by the Hon’ble Court
The agreement was construed as sharing divisible profits. Its list of deductions was not exhaustive. Profits taken by the State as excess profits tax were unavailable for division between company and agents. Other agreements and the Companies Act provision applicable only to later agreements did not alter this construction.
03 · Judicial decision
Excess profits tax must be deducted when calculating the annual net profits under this particular agreement.
Source: Primary report: SCR Supp. (1) 38
04 · Outcome / in whose favour
Revenue appeal allowed with costs in the Supreme Court and High Court; the referred question was answered affirmatively.
Source: Primary report: SCR Supp. (1) 38
05 · AKHB REVIEW POINT
Read the exact remuneration agreement. The judgment decides a contractual commission base and does not announce that income-tax is generally deductible in computing taxable profits.
Source & verification
Download original judgment / order · Open cited source rendition
Complete 11-page Supreme Court Reports scan. Any adjoining report fragments remain in the unchanged original and are excluded from this analysis.
Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
Source checked 2026-10-23. Subsequent treatment and present-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 uses AI assistance and a preserved full-primary review, with refreshed exact original-byte verification. 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. AKHB REVIEW POINT is editorial analysis, not the Court’s holding.