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Issues:
1. Taxability of commission earned during the assessment year. 2. Characterization of commission as salary for the purpose of tax assessment. Analysis: 1. The appeal addressed the taxability of a commission earned during the assessment year. The assessee, as the chairman and managing director, was entitled to a commission based on profits. The assessing officer taxed the commission for the assessment year 1996-97. However, on appeal, both the Commissioner (Appeals) and the Tribunal found that the profit was finalized and approved in the following year relevant to the assessment year 1997-98. The Tribunal confirmed that the commission was taxable only in the assessment year 1997-98. The key contention was that the commission approved for the assessee pertained to the assessment year 1996-97, and thus, should be taxable in that year. 2. The court considered the facts and noted that the commission earned by the assessee was approved in the board meeting relevant to the assessment year 1997-98. Additionally, Tax Deducted at Source (TDS) was deducted only for the assessment year 1997-98 and not prior to that. Referring to a similar case, the court cited the decision in CIT v. Seshasayee Bros. (P) Ltd., where it was held that income is taxable in the assessment year when approved by the board. Both the Commissioner (Appeals) and the Tribunal relied on this decision. Consequently, the court found no merit in the appeal, as it aligned with the Division Bench judgment of the Court. Therefore, the tax case appeal was dismissed, ruling in favor of the assessee and against the revenue.
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