9911796707
TMI Blog1968 (8) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to as " the company ". The assessee received for the financial year 1948-49 by way of director's fee a sum of Rs. 1,200 in addition to an annual remuneration of Rs. 10,000. This remuneration was paid to the assessee in pursuance of a resolution passed at a meeting of the board of directors held on January 6, 1949, which read as follows : " Resolved that the remuneration of the three directors R. B. Mr. Suraj Narain, R. B. Mr. Devi Singh and Mr. Ishwar Lal be fixed at Rs. 10,000 each for the year 1948-49 and these amounts shall be payable out of the profits of the company. " The resolution was confirmed in an extraordinary general meeting of the shareholders held on February 8, 1949, but the assessee was actually paid this sum as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June 30, 1941, to June 30, 1948, and thereafter, the remuneration was paid for the first time to the assessee and other directors for the previous year ending on June 30, 1949, corresponding to the assessment year 1950-51. The company did not claim the amount paid as remuneration to the directors as revenue expenditure in view of the orders of the income-tax authorities passed for the assessment year 1941-42. The assessee claimed that the remuneration paid to him should not be taxed for the relevant assessment year as it will result in double assessment. The claim of the assessee was rejected by the Income-tax Officer and also by the Appellate Assistant Commissioner in appeal. The assessee took the matter in appeal to the Income-tax Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate granted by the High Court under section 66A(2) of the Income-tax Act, 1922. It is necessary at this stage to set out the terms of the Notification No. 878-F dated March 21, 1922, as amended by Notification No. 8 of March 24, 1928, which is to the following effect : " Incomes included in total income but exempt from income-tax and not from super-tax.--The following classes of income shall be exempt from the tax payable under the said Act, but shall be taken into account in determining the total income of an assessee for the purposes of the said Act : (1) Sums received by an assessee on account of salary, bonus, commission or other remuneration for services rendered, or in lieu of interest on money advanced, to a person for purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d over again in the hands of the assessee. There is nothing in the language of the Notification to suggest that it was a condition precedent for getting the benefit of the Notification that the company should have expressly made a claim for deduction and that claim should have been expressly disallowed. The words used in the Notification are " have not been allowed as a deduction " and there is no warrant for construing these words as " have been claimed and not allowed as a deduction ". We are, on the contrary, of the opinion that, on a plain reading of the language of the Notification, the only requirement is that the deductions should not have been allowed to the company, whether or not it had claimed such deductions, and, in such a case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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