2002 (9) TMI 61 - HC - Income Tax

Whether, Tribunal, having held that the commission received by the assesses from Kunal Engineering Company Limited apart from his regular salary income would form part of his salary income, was right in holding that only the net commission claimed by the assessee, after deduction of various expenses, such as canvassing, salary, travelling, telephone, postage, etc., expenses and depreciation on car should be assessed to tax as the assessee s income from salary? - The commission paid to the assessee here was with reference to the volume of sales. The assessee was employed as a regional sales manager and the commission paid was obviously to enthuse the employee to effect a higher volume of sale. The commission so paid in addition to what the employer had fixed as a salary would also form part of salary. The question of allowing any deduction therefrom on the ground that the assessee had incurred expenses to earn that commission therefore does not arise. - The question referred to us is, therefore, answered in favour of the Revenue and against the assessee.

Summary

The High Court of Madras ruled that commission received by an employee from the employer forms part of the employee's salary income. The court held that expenses incurred by the employee to earn the commission cannot be deducted. The judgment favored the Revenue and went against the assessee.