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Issues Involved:
The issue in this case revolves around the assessability of commission receipts as salary under section 16 of the Income-tax Act, 1961, and whether a part of such commission is exempt under section 10(14) of the Act. Assessability of Commission Receipts as Salary: The case involved an assessee who worked as a supervisor and received both a fixed salary and commission income. The Income-tax Officer rejected the assessee's claim for deductions based on actual expenses incurred. However, the Appellate Assistant Commissioner allowed a deduction of 30 per cent of the commission earned after applying section 16(1) of the Income-tax Act. The Tribunal, following precedents, upheld the allowance of the deduction. The court referred to a previous decision which clarified that commission falls under the definition of "salary" as per section 17 of the Act, irrespective of whether it is work-dependent or fixed. The court emphasized that the employer's treatment of the payment as salary, including deductions under section 192, supported the classification of the commission as income from salary. Consequently, the court ruled that a deduction of 30 per cent could not be granted for expenses incurred. Exemption under Section 10(14) of the Act: The Tribunal had to determine whether a part of the commission income was exempt under section 10(14) of the Income-tax Act. The court, aligning with the earlier decision, held that the commission received by the assessee was not eligible for the 30 per cent deduction claimed for expenses. Therefore, the references were answered in favor of the Revenue and against the assessee, indicating that no part of the commission was exempt under section 10(14) of the Act. This judgment clarifies the treatment of commission income as salary under section 16 of the Income-tax Act and emphasizes the importance of adhering to the definitions and provisions outlined in the Act when determining assessability and deductions related to such income.
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