HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Bombay North v. Harivallabhdas Kalidas & Co. and connected appeal
Civil Appeals Nos. 145 of 1958 and 323 of 1957
[1960] (3) SCR 50 ·
Indian Income-tax Act, 1922: accrual of managing-agency commission
Sources & disclosures includedDownload original judgment / order
3-judge bench · S. K. Das · J. L. Kapur · M. Hidayatullah
Assessment years: 1951-52, 1952-53
01 · Facts of the case
Managing agents agreed before the 1950 year-end to reduce commission from 5% to 3%; ratification and formal execution followed. Revenue added the difference as accrued income subsequently relinquished. The contract gave an annual choice of commission basis and required a possible annual rebate tied to the company’s dividend capacity.
Source: Primary report: SCR 52–54
02 · Discussion by the Hon’ble Court
The agreement had to be read as an integrated whole. The annual option and contingent reduction meant commission accrued only at year-end, not on each sale. Earlier modification therefore preceded accrual; cases of subsequently diverted accrued commission were distinguishable.
Source: Primary report: SCR 55–57
03 · Judicial decision
No voluntary relinquishment of already accrued commission occurred; the High Court’s conclusion for the agents was upheld.
Source: Primary report: SCR 57
04 · Outcome / in whose favour
Revenue’s Civil Appeal 145/1958 was dismissed with costs. The managed company did not press connected Civil Appeal 323/1957, dismissed with parties bearing their own costs.
Source: Primary report: SCR 57–58
05 · AKHB REVIEW POINT
Distinguish pre-accrual contractual variation from disposal of accrued income by reading the actual remuneration conditions. The connected company appeal was not decided on an independent deduction merits claim.
Source: Primary report: SCR 54–58
Source & verification
Download original judgment / order · Open cited source rendition
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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.
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