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TMI Blog1933 (1) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... is whether on the facts of this case the transfer to the company's employees on the termination of their employment with the company of shares representing bonuses is a payment to them falling under the head "Salaries" as defined in Section 7 of the Income-tax Act. Section 7 (1) runs as follows:- "The tax shall be payable by an assessee under the head 'Salaries' in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y shares of the company, and to be calculated at the same rate as the dividend declared on the ordinary shares in each year. The shares so granted as bonus to become the absolute property of the employee at the termination of this engagement with the company whenever that may happen". Now, the scheme set out in the above minute of the company's proceedings on the 20th of March, 1918, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld fall within the head "Salaries" in Sec. 7(1) of the Income-Tax Act. And it must be borne in mind that on the present reference the question does not arise whether the payment to the trustees for the benefit of the employee of the money with which the shares were purchased was a payment of salary within Sec. 7(1) of the Income-Tax Act; and we refrain from expressing any opinion on thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the employee the company did not possess any legal or beneficial interest in the shares; it possessed no legal interest in the shares because the legal estate passed to the trustees on the registration of the transfer, and it possessed no beneficial interest in the shares because after the transfer to the trustees the shares thereafter were held by the trustees for the employee as the person ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yee compel the company at the termination of his engagement to transfer the shares to him? Clearly not, because under the scheme the company did not retain any interest in the shares or in the money provided for purchasing them and was incapable of causing a transfer to be made. For these reasons, in my opinion, the answer to the question propounded is in the negative. Das, J.-I agree. Mya Bu, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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