Commission exemption under tax notification upheld where all cumulative conditions were satisfied and double taxation was avoided.

Commission paid to an assessee was exempt under the relevant notification because all three cumulative conditions were met: it was paid out of business profits, it had not been allowed as a deduction and was included in the employer's taxable profits, and income-tax had been assessed on those profits as business income. The notification was applied to avoid double taxation of the same income, and the commission was therefore exempt in the assessee's hands.

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Issues: Whether the commission received by the assessee was exempt from tax under the relevant notification.

Analysis: The notification granted exemption to salary, bonus, commission or other remuneration only when three cumulative conditions were satisfied: the payment had been made out of or with reference to the profits of the business, the amount had not been allowed as a deduction but had been included in the business profits, and income-tax had been assessed and charged on those profits under the head "business". The third condition was admittedly satisfied. On the first condition, the commission was held in fact to have been paid out of the employer's business profits. On the second condition, the amount had been disallowed in computing the employer's taxable profits and had been included in the assessment. The object of the notification was to prevent the same income from being taxed twice over.

Conclusion: The commission satisfied all the conditions of the notification and was exempt from tax in the hands of the assessee.

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