1997 (12) TMI 19

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....is tax case revision is filed against the order of the Commissioner of Agricultural Income-tax, dated January 12, 1990, passed in S.R.M.P. No. 4 of 1988. The assessment year involved is 1984-85. The Commissioner of Agricultural Income-tax disallowed the commission paid to the managing director of the company and other directors on the ground that the directors including the managing director we....

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.... the other directors. The learned Government Advocate, on the other hand, submitted that the commission paid to the managing director and other directors are not allow able in the computation of the agricultural income of the assessee as the com mission paid to them would really partake of the character of the non-agricultural expenses. We have carefully considered the submissions of learned....

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....ng director. The payment of salary can be measured either on time basis, i.e., weekly, monthly or quarterly, and it can also be paid on the basis of the work done by the director. Whatever may be the measure for the payment of money to the director for the work done, the commission paid to the director by the company would really partake of the character of the salary though it is styled as a comm....

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....the fact that the company is a distinct and separate juristic entity and the directors are not entitled to share the profit and they will be entitled to receive dividends on the declaration of the dividends in a general body meeting of the company. It is not disputed that the directors did render any service to the company and therefore it cannot be held that the payments were made on certain extr....