Office of profit means a broader employment relationship, and a contingency allowance can qualify for tax exemption.

The 5% amount was treated as distinct from commission and as compensation in lieu of contingency expenses, so it qualified for exemption under section 4(3)(vi) of the Income-tax Act, 1922. The phrase "office or employment of profit" was given its plain and natural meaning and was not confined to a permanent or pre-existing substantive post; a selling agent appointed for a defined territory could still hold such an office even if created by the appointment itself. On that construction, the assessee satisfied the exemption conditions.

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Issues: Whether the 5% amount received by the assessee was a special allowance specifically granted to meet contingency expenses and whether the assessee held an office or employment of profit so as to attract exemption under section 4(3)(vi) of the Income-tax Act, 1922.

Analysis: The 5% component was held to be distinct from the commission and to represent compensation in lieu of contingency expenses such as commissions to dyeing masters and agents. The Court further held that the expression "office or employment of profit" in section 4(3)(vi) should receive its plain and natural meaning and is not confined to a permanent or pre-existing substantive post. A selling agent appointed for a defined territory can hold an office of profit even if the position is created for the first time by appointment. The reference to sections 204 and 314 of the Companies Act, 1956 supported this broad construction of "office of profit".

Conclusion: The assessee satisfied the conditions of section 4(3)(vi) and was entitled to exemption on the 5% amount.

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