1992 (12) TMI 25

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....s is not assessable to tax in the hands of the assessee ?" The facts may first be stated in short. The assessee was a director of Tata Iron and Steel Company, Jamshedpur. He was appointed for a period of three years. According to the terms of the agreement, the assessee was to get a salary of Rs. 7,500 per month and a commission at the rate of 1% on the net profits earned by the company subject to a ceiling of Rs. 45,000 per annum or half of the fixed salary whichever was less. Later on, the terms of appointment of the assessee were varied and the company, instead of paying commission, decided to purchase deferred annuity policies worth Rs. 45,000 from the Life Insurance Corporation of India, vide a resolution passed at the annual genera....

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....licy for an amount of Rs. 45,000 from the Life Insurance Corporation of India. Under the terms of the said policy, the annuity was payable either to the assessee on his retirement or to his dependants on his death. During the course of assessment proceeding for the assessment year in question, the assessee claimed that the amount of Rs. 45,000 paid by the company against the deferred annuity policies, purchased pursuant to the aforesaid resolution, is not taxable in the hands of the assessee. The Income-tax Officer rejected the claim, which was upheld by the Appellate Assistant Commissioner. But, on second appeal, the Tribunal took the view that the amount in question was not taxable in the hands of the assessee in view of the decision o....