Director's remuneration treated as salary income where employer-employee relationship exists; standard deduction allowed.

Where a director is, on the facts, under the control of the board and engaged on stipulated terms, the remuneration is assessable as salary income because the relationship is that of employer and employee; the assessee is therefore entitled to standard deduction. The reference to adjustment under section 143(1)(a) did not change the substantive character of the receipt, and the departmental challenge failed.

---

---

Issues: Whether the director's remuneration received by the assessee was assessable as salary income on the basis of an employer-employee relationship, with consequential entitlement to standard deduction, and whether the adjustment made under section 143(1)(a) was justified.

Analysis: The assessee was found to have earned the remuneration as an employee of the company. The Tribunal accepted that the director was under the control of the board, the appointment was on stipulated terms, and the relationship was that of employer and employee. On that footing, the remuneration was held to be salary income and the assessee was held entitled to standard deduction. The reliance placed on the adjustment under section 143(1)(a) did not alter the substantive finding on the nature of the receipt.

Conclusion: The remuneration was rightly treated as salary income, and the assessee was entitled to standard deduction. The departmental appeal failed.

Final Conclusion: The assessment treatment directed by the first appellate authority was upheld, and the departmental challenge was rejected.

Ratio Decidendi: Where a director is found on the facts to be in an employer-employee relationship with the company, the remuneration received is assessable as salary income with the attendant deduction benefits.

---