This amount was claimed as a deduction under s. 10 2 xv of the Income tax Act which reads Section 10 2 Such profits or gains shall be companyputed after making the following allowances, namely any expenditure number being an allowance of the nature described in any of the claused i to xiv inclusive, and number being in the nature of capital expenditure or personal expenses of the assesee laid out or expended wholly and exclusively for the purpose of such business, profession or vocation.
40,000/ and the Managing Agent Company the balance of Rs.
85 of 1953.
Appeal by special leave from the judgment and order dated December 20, 1956, of the Madras High Court in Case Referred No.
On March 24, 1949, the Board of Directors of the appellant Company passed a resolution that his resignation be accepted and in appreciation of his long and valuable services to Company hebe paid a gratuity of Rs.
On March 22, 1949, he wrote a letter to the appellant companypany expressing his intention to resign from the Board of the Company as from April 4, 1949 upon his retirement from the employment of the companypany and requested that his resignation be accepted.
10,000/ April 4, 1949, this resolution of the Board of Directors was companyfirmed.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
One J. H. Philips was employee in the Managing Agent Company from 1922 to 1935 and from 1935 he became an employee of the appellant companypany and became its Director from 1940.
V. Viswanatha Sastri, R. Ganapathy Iyer and G. Gopalakrishnan for the appellant.
The appeal relates to the assessment year 1950 51.
N. Rajagopala Sastri and P.D. Menon for the respondent.
62 of 1961.
The appellant is the assessee and the respondent is the Commissioner of Income tax and the question raised is as to applicability of s. 10 2 xv of the Indian Income tax Act to a gratuity paid by the appellant to one of its officers on his retirement from service.
M s. Gordon Woodroffee Co. Madras Ltd., was incorporated as a private limited companypany in 1922 and became the Managing Agent of a public limited companypany M s. Gordon Woodroffee Leather Manufacturing Company Ltd., which is the assessee.
December 20.
The Judgment of the Court was delivered by KAPUR, J. This appeal by special leave is directed against the judgment and order of the High Court of Judicature at Madras.
The amount was disallowed by the Income tax Officer as well as by the Appellate Assistant Commissioner on the ground that the appellant Company had numberpension scheme the payment was voluntary and that the entry in the assessees books clearly indicated it to be a capital payment.
40,000/ was paid to Mr. J. H. Philips.
50,000/ out of which the appellant Company was to pay Rs.
Against this order the appellant Company took an appeal to the Income tax Appellate Tribunal which upheld the order of the Appellate Assistant Commissioner.
On the same date a resolution to the same effect was passed at an Extraordinary General Meeting of the Company and before the end of its accounting year i. e. October 31, 1949, this amount of Rs.
