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TMI Blog1986 (4) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that the salary and commission paid to Shri H. S. Sethi exceeded the limit of Rs. 60,000 provided for in section 40A(5)(a)(i) and (c) of the Act. This was a mistake and, therefore, he proceeded on to rectify the same by limiting the total to as prescribe by law. The assessee went in appeals to the Commissioner (Appeals) who was of the opinion that payment of commission to Shri H. S. Sethi had been made depending on the increase of sales and, therefore, the salary band commission to him related to different items for two different services performed by Shri H. S. Sethi. The payment was not in the nature of salary but was with reference to the guarantee of sales and, therefore, it could not be included along with salary so as to limit the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely : (1) in the said clause (1), the word 'perquisites' occurring in sub-clause (iv) and the whole of sub-clause (vii) shall be omitted; (2) in the said clause (3), the references to 'assessee' shall be construed as references to 'employee or former employee' and the references to 'his employer or former employer' and 'an employer or a former employer' shall be construed as references to 'the assessee';" Section 17 of the Act defines the word 'salary' as under : "For the purposes of sections 15 and 16 and of this section, (1) 'salary' includes - (i) to (iii) ** ** **. (iv) any fees, commissions, perquisites or profits in lieu of or in addition to any salary or wages;" Whether Shri H. S. Sethi was being paid a commission i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the directors clearly earned the commission not in consideration of their capacity as directors or employees but entirely in a different capacity, namely, as the guarantors of the credit worthiness of the assessee company. Thereby they exposed their personal properties to the risk of being proceeded against the creditor, in case the company was not able to meet its obligation regarding the guaranteed credit, this commission was not dependent upon their personal efforts. In the present case although the agreement to pay commission appears to be a separate one as was argued at length by the assessee's representative, the fact remains that the commission was directed to be paid for performance of certain duties in relation to sales as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied his mind to the correct legal position. In such circumstances we sitting as a Tribunal would also rectify an rode which does not take into consideration a particular provision of law if the same was silent about it. But if the matter had been discussed and a wrong conclusion arrived, probably rectification may not be possible. 3. Considering the overall circumstances of the case, we are of the opinion that the earlier order clearly suffered from a mistake apparent on record. We, therefore, accept these appeals, set aside the order of the Commissioner (Appeals) and restore those of the order of the IAC in this behalf. 4. In the result, the appeals are allowed. Per Shri A. Kalyanasundharam, Accountant Member - I agree with the con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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