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TMI Blog1992 (7) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... t for our opinion on the following question : "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that, the remuneration of the assessee as managing director of the company, Messrs. Pile Foundation Construction Co. (India) Pvt. Ltd., is assessable under the head 'Salary' as there existed the relationship of the employee and employer ?" The m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal, the Appellate Assistant Commissioner, after referring to clauses 68(a) and 49 of the articles of association of the company, observed that the assessee being the first managing director of the company had to act and discharge all the duties and powers vested in the board of directors and that, on a total reading of the memorandum and articles of association, it cannot be said that the employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l appearing for the parties are that the answer to the question will depend on the interpretation of the relevant clauses of the articles of association of the company. On a combined reading of clauses 64, 65, 67 and 68, it appears that the managing director is to act and discharge all the duties and powers subject to the direct control and supervision of the board of directors. Clause 65(b) provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject to the control and supervision and disciplinary power of the person who employs him. The latter is the employer and the former is the employee. In the words of the Supreme Court, "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 and he can be dismissed or his employment can be terminated by the com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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