9911796707
TMI Blog2000 (12) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... to whether the fixed salary or commission on net profit or sales or partly by one or partly by the other in respect of the directors, was to be decided by the board of directors as laid down in articles 25 and 29 of the memorandum and articles of association of the company. By resolution passed at an extraordinary meeting of the shareholders held on March 8, 1966, D.R. Bhagat was appointed as the managing director and three other persons, namely, Jatinder Kumar, Prem Sagar Bhagat and Vidya Sagar Bhagat, were appointed as directors. D.R. Bhagat was to be paid a fixed salary of Rs. 2,500 per month with effect from November 1, 1965, and commission at 1 1/2 per cent. of the total contractual receipts, and other directors were to be paid salary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the payments received. It was purportedly done on the basis that the company had suffered a loss of Rs. 7.83 lakhs. Accordingly, returns were filed. It appears that for the assessment year 1971-72, the assessee in each case filed a return of income showing the commission receivable at 1/2 per cent. but subsequently a revised return was filed indicating a revised commission of 1/4 per cent. Assessments for the two years were completed by the Income-tax Officer accepting the claims. The Commissioner of Income-tax (in short, "the Commissioner") was of the view that the assessments so done were prejudicial to the interests of the Revenue and, therefore, initiated proceedings under section 263 of the Act and issued notice. The foundation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 263 of the Income-tax Act?" We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessee in spite of notice. Learned counsel for the Revenue submitted that the pivotal question is whether the income had accrued prior to the purported resolutions. The assessee's stand was based on an oral agreement. The Judicial Member with reference to the subsequent resolutions has factually recorded that there was no reference to any oral agreement in the subsequent resolutions. In fact, he also noticed about the original return which was filed on the basis of commission fixed by the previous resolution. Unfortunately, though the Vice-President agreed with the Accountant Member he did not refer to these aspects which w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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