46 D of 1962.
By virtue of Art.
109 of the Articles of Association of the said companypany, the assessed became the first Managing Direction on terms companyditions agreed to and embodied in an agreement dated November 20,1955 between himself and the companypany.
The assessee claimed that the amount given up by him was number liable to be included in his total income because the amount had number accrued to him at all, at ,my rate, in the accounting year ended 31st March 1956 and that even assuming that it had accrued in the account year ended 31st March 1956, it is number taxable under s. 7 or s. 10 of the Indian Income tax Act, 1922 hereinafter called the Act .
Tile Judgment of the Court was delivered by Jaganmohan Reddy, J. The assessee and his wife owned a large number of shares in a private limited companypany engaged in the business of running hotels.
The above amount was given up by him because the companypany would number be making net profits if the stipulated companymission was paid to him.
C. A. No.
2,000/ per month, a fixed sum of Rs.
53,913/ was taxable as salary under s. 7 of the Act and that the income had accrued to the assessee during the previous year.
Against the judgment of the High Court, this appeal is by special leave.
CIVIL APPELLATE JURISDICTION.
N. Sinha Solicitor General of India, B. D. Sharma and N. Sachthey for the respondent.
Appeal by special leave from the judgment and ordered dated September 29,1967 of the Delhi High Court in 1.
1946 of 1968.
Under the said agreement, the assessee was to receive Rs.
53,913/ payable to him as 10 of the gross profits of the companypany which he gave up soon after the accounts were finalised but before they were passed by the general meeting of the shareholders.
K. Sen, H. K. Puri and S. K. Dhingra, for the appellant.
The Income tax Officer, the Appellate Assistant Commissioner, the Tribunal and on a reference under s. 66 1 the High Court have all held that the 10 companymission on gross profits amounting to Rs.
500/p.m. as car allowance, 10 per cent of gross profits of the companypany and he and his wife were entitled to free board and lodging in the hotel.
T. Reference No.
