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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether commission standing to the credit of a deceased managing agent, and paid after his death to his widow as administratrix, was includible in the assessment for the year 1939-40 as salary of the deceased under the Income-tax Act, 1922.
Analysis: The commission had been earned by the deceased in his capacity as managing agent and remained unpaid at the date of death. The amended charging provision relating to salary brought within tax not only salary actually paid, but also salary due though unpaid. The Court held that the word "due" could not be confined to salary due only in respect of the accounting year, and that the later payment to the legal representative did not alter the character of the amount as salary due to the deceased. On that construction, the deceased would have been assessable on the amount, and under the provisions governing assessment of a deceased person's estate the legal representative was liable for the tax.
Conclusion: The sum of Rs. 18,184 was rightly included in the assessment for 1939-40, and the question was answered in the affirmative, in favour of the Revenue.
Final Conclusion: The reference was disposed of by holding that arrears of commission earned by the deceased and paid after death to the legal representative remained taxable as salary of the deceased in the hands of the estate.
Ratio Decidendi: Salary or commission earned by a deceased employee or managing agent, though unpaid at death and later received by the legal representative, remains taxable as salary due to the deceased and is includible in the assessment of the deceased's estate.
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