TaxTMI 
TaxTMI 
1993 (9) TMI 8
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....e paid compensation at the rate of Rs. 40,000 per annum for the unexpired period. The Revenue, of course, disputes the aforesaid stipulations relating to period of service and the provision for compensation in case of premature termination. Through a letter dated February 14, 1950, the services of the appellant were terminated with effect from November 30, 1949. An amount of s. 7 lakhs was paid to the appellant on that occasion. In the assessment proceedings relating to the assessment Year 1950-51, the appellant claimed that the said sum of Rs. 7 lakhs received by him was not taxable inasmuch as it represented compensation for loss of employment. He submitted that, according to the law as it then stood, the amount paid by way of compensation towards loss of employment was not taxable. The Income-tax Officer did not agree with the submission and included the said amount in his income. On appeal, the Appellate Assistant Commissioner upheld the appellant's plea and allowed the appeal, whereupon the Revenue went in appeal to the Tribunal. This appeal was dismissed on August 13, 1956. An application filed by the Revenue under section 66(1) of the Indian Income-tax Act, 1922, was d....
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....ion investigating the matter afresh for any other purposes." "The question before the income-tax authorities was whether the receipt of Rs. 7 lakhs was taxable or not in the hands of Shriyans Prasad Jain. We are not, however, looking into this question, viz., taxability or otherwise of the payment of Rs. 7 lakhs. What we are concerned with is the propriety of the transaction itself." The Commission had further observed: "We do not deny that Shri Shriyans Prasad worked for D. C. P. M. from 1943 and that he drew remuneration specified in the liquidator's letter of May 1, 1953, to Messrs. D. P. Khosla and Co., nor did we question that the income-tax was paid as stated during that period. We have questioned in another place the reasonableness of the terms but not the fact of appointment on those terms. What we are questioning here are the terms about the period of employment and the provision about the payment of compensation for the breach that finds place in the impugned letter. In our opinion, that was an after-thought. We are of the view that those terms do not appear in the original contract. The scheme to defraud the exchequer by these ingenious devices was devised later....
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....mary facts, it will always be open to take action under section 147(a). Under section 151(1), no notice shall be issued under section 148 after the expiry of eight years from the end of the relevant assessment year, unless the Board is satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice. The notice under section 148 in the present case has been issued after the expiry of eight years from the end of the assessment year 1950-51, but the Central Board of Direct Taxes, upon a report submitted by the Income-tax Officer, has accorded its sanction for initiation of proceedings against the assessee for the assessment year 1950-51 under section 147(a) of the Act. In that view of the matter, it is not possible to take the view that the initiation of proceedings can be regarded as time barred. Accordingly, the notice for initiation of reassessment proceedings will have to be upheld in so far as it relates to the item of Rs. 7 lakhs paid by the company to the petitioner." The appellant sought to question the judgment of the Bombay High Court by way of special leave petition in this court, which was rejected on February 24, 1975. ....
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....nce. It is a case of pure guess. Shri P. S. Poti, learned counsel for the Revenue, supported the reasoning and conclusion of the Settlement Commission. He submitted that the findings recorded by the Commission are not subject to review in this appeal. Learned counsel submitted that in the absence of the appellant establishing that the order of the Commission is violative of any of the provisions of the Act, no relief can be granted to him in this appeal. He relied upon the decision of this court in Jyotendrasinhji v. S. I. Tripathi [1993] 201 ITR 611. Section 7 of Indian Income-tax Act, 1922, read as follows at the relevant time: "Salaries.-(1) The tax shall be payable by an assessee under the head 'Salaries' in respect of any salary or wages, any annuity, pension or gratuity, and any fees, commissions, perquisites or profits in lieu of, or in addition to, or are paid by or on behalf of, the Government, a local authority, a company, or any other public body or association, or any private employer ; and for the purposes of this sub-section advances by way of loan or otherwise of income chargeable under this head shall be deemed to be salary due on the date when the advance ....
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....een carried on between this company and yourself, this is to confirm that you will please look after the Bombay office organisation of this company, for which you will be paid a fixed amount of Rs. 4,000 (rupees four thousand only) per month. Income-tax and super-tax due and payable on this amount of remuneration will be paid by the company according to the rate prescribed in the yearly Finance Acts. Conveyance and entertainment allowances will be allowed as may be agreed upon from time to time. The term of employment will be for a definite period of 25 years commencing from April 1, 1943, and the company reserves to itself the right to depute you to look after the interests of any other concern and arrange for your remuneration being paid either by that other concern or itself meet the same. You have requested that it should be made clear that should your services be terminated before the expiry of 25 years, then a definite compensation for loss of office and breach of agreement should be provided. In confirming that on the occurrence of any such contingency of our severing connections with each other or terminating the office of employment due to any reason, whatsoever, it ....
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....ment Commission, So far as the Assessing Officer is concerned, admittedly, he did not refer to the said aspect. He did say that the said letter was produced before him but he did not say whether the letter produced before him was the original or a copy. So far as the Appellate Assistant Commissioner is concerned, he merely observed in his order that " there is on record an agreement dated October 11, 1943". The genuineness of the said letter was not put in issue before him. It is true that before the Tribunal, the Departmental Representative sought to challenge the genuineness of the said letter, but the said challenge was not allowed to be raised. The Tribunal held that it was not open to the Department to attack the genuineness of the said agreement/letter for the first time at the stage of the Tribunal. It is, there fore, not correct to say that the genuineness of the letter was pronounced upon by the authorities in the original assessment proceedings. In this view of the matter, it is not necessary for us to go into the question whether, if any such finding had been recorded, it would operate as a bar to reopening the said question in reassessment proceedings or before the Sett....