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TMI Blog1986 (8) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... income from other sources in both the years. On appeal, the AAC held that the relationship of employer and employee existed between the company and the assessee and so income should be assessed under the head salary. Against the same the Revenue has preferred these appeals. 3. The ld. departmental representative submitted that the relationship between the assessee and the company is that of an agent but not as a servant. Hence the income received is assessable under the head other sources. Learned counsel for the assessee submitted that the relationship of employer and employee existed between the company and the assessee and so the income is assessable under the head salary and standard deduction has to be allowed. Thus he supported the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the agreement. The agreement was approved by the Government of India as per its letter dt. 20th April, 1981 under which the Managing Director was entitled to 5 per cent commission on the net profits of the company subject to a ceiling of Rs. 66,000 per annum all inclusive. Under the Memorandum and Articles of Association of the Company the business of the Company shall be managed by the Board of Directors. Under art, 106 the Company may remove any director before the expiration of his period of office. Under art. 118 of the Company the business of the Company shall be managed by the Board of Directors. Under art. 125 the Board may from time to time delegate to and fonder on any Managing Director or any wholetime director any or all the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only be determined by the Articles of Association and the terms of his employment. It was held that if the company is itself carrying on the business and the assessee is employed to manage its affairs in terms of its articles and the agreement, he should be dismissed or his employment can be terminated by the Company if his work is not satisfactory, it can hardly be said that he is not a servant of the company. In the facts of the case it was held that the sum of Rs. 53,913 was payable to the Managing Director as salary and was chargeable under s. 7 of the Indian IT Act, 1922. In Satya Paul vs. CIT (Central), Calcutta 1978 CTR (Cal) 92 : (1979) 11 ITR 335 (Cal), the Calcutta High Court held that the relationship between the Managing Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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