TaxTMI 
TaxTMI 
1994 (12) TMI 67
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....e's income for the assessment year 1974-75 ? " This reference relates to the assessment year 1974-75 having the corresponding previous year ended on March 31, 1974. The assessee, an individual, was the managing director of a company known as "Amar Dye Chem Limited " (for short, " the company "). Under an agreement dated May 11, 1970, between the assessee and the company, the assessee was appointed as the managing director of the company for a period of five years commencing from January 1, 1970, on a salary of Rs. 72,000 per annum plus commission at the rate of one per cent. of the net profits subject to a ceiling of 50 per cent. of the approved salary. The terms of the said agreement were modified by mutual consent by a subsequent ag....
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....mount so paid was an item of perquisite to the assessee from the company and was includible in the computation of the assessee's income. On appeal by the assessee, the Appellate Assistant Commissioner held that the said sum of Rs. 45,000 paid as premium to the Life Insurance Corporation of India could not be added to the income of the assessee as perquisite due to him during the year and ordered deletion thereof. On the Departmental appeal, the Income-tax Appellate Tribunal held that the said sum of Rs. 45,000 paid to the Life Insurance Corporation of India as premium for purchase of the deferred annuity policy was includible in the computation of the assessee's income as a part of salary and, as such, reversed the decision of the Appellate....
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.... per month, and in addition a commission at the rate of one per cent. of the net profits of the company for each financial year computed in the manner laid down in sections 349, 350 and 351 of the Companies Act, 1956, subject to a ceiling of Rs. 45,000 or one-half of the salary whichever is less with effect from January 1, 1970. It was, thereafter, agreed that the assessee as managing director would not be entitled to any commission on the net profits in respect of the financial year 1973 and subsequent financial years and the company agreed to purchase deferred annuity policies from the Life Insurance Corporation of India on the life of the assessee for the financial year commencing from January 1, 1973, and subsequent financial years. The....
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....greement as modified by the said supplemental deed to the effect as resolved in the said resolutions and to accept modifications as might be directed by the Central Government. By its letter dated April 11, 1974, the Central Government approved deletion of the commission payable by the company to the assessee and purchase of deferred annuity policies by the company for the assessee with effect from January 1, 1973. Accordingly, on April 22, 1974, a second supplemental agreement to the said principal agreement dated May 11, 1970, was executed by and between the company and the assessee and with effect from January 1, 1973, the company ceased to be liable to pay to the assessee commission at the rate of one per cent. of the net profits of the....
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....n appeal before the Tribunal. On the footing that on the last day of the company's relevant previous year, the valid agreement between the assessee and the company was the one dated April 26, 1971, under which the assessee was entitled to commission as aforesaid in addition to the salary of Rs. 90,000 per annum and that the approval of the Central Government to the new arrangement was not received till the end of the relevant previous year which ended on March 31, 1974, the Tribunal held that as on March 31, 1974, the assessee was entitled to salary and commission as per the said supplemental deed dated April 26, 1971, and that the said commission amount of Rs. 45,000 having accrued to the assessee during the relevant previous year ended on....