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Issues:
1. Assessment of shop-pool commission as income from 'Other sources' and allowance of 30% deduction for expenses. 2. Assessment of employee's commission under section 16 of the Income-tax Act, 1961. Analysis: The case involved the assessment of shop-pool commission received by an employee as income from 'Other sources' and the allowance of a 30% deduction for expenses. The employee, in addition to a monthly salary, received commission amounts for two assessment years. The employer reflected the commission as part of the salary in its accounts, while the employee claimed it as income from other sources in his returns. The Assessing Officer included the commission in the computation of salary, allowing deductions under section 16(i) of the Act. The Appellate Assistant Commissioner accepted the employee's contention that the income was taxable as income from other sources, allowing a 30% deduction for expenses. The Revenue appealed, arguing that the commission should be assessed under the head "Salary." The Tribunal upheld the income as from other sources and the 30% deduction. However, the Revenue contended that the Tribunal's approach was erroneous, as the terms of engagement indicated an employer-employee relationship, and the commission should be assessed as salary income. The Tribunal's error was noted in concluding that the income should be assessed as income from other sources, while the Appellate Assistant Commissioner had categorized it as salary income, allowing a 30% deduction for expenses. The conditions of engagement indicated an employer-employee relationship, and the commission was to be assessed under the head "Salary" as per section 17(1)(iv) of the Act. The employer's treatment of the commission as salary for tax deduction purposes further supported this categorization. Legal precedents highlighted that commission based on work done falls under the definition of "salary," as seen in previous court decisions. The Tribunal's decision to allow the 30% deduction for expenses was deemed incorrect, as the commission was rightly assessed as salary income. Therefore, both questions were answered in the negative, favoring the Revenue and against the assessee. The judgment, delivered by Judge Arijit Pasayat, emphasized the legal definitions and precedents governing the categorization of commission income as salary income. The analysis focused on the employer-employee relationship and the nature of the commission received, ultimately determining the correct assessment under the Income-tax Act, 1961.
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