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TMI Blog1990 (7) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ied ?" The facts leading to this reference are as under: V. M. Parekh was an employee in the jewellery department of Messrs. Batliboi and Co. Private Ltd. There was no agreement in writing between V. M. Parekh and his employers in regard to the terms of his employment and remuneration. But it is an accepted position that remuneration was to be paid to V. M. Parekh by the employers at Rs. 150 per month or a share of 3 annas 9 pies in a rupee in the profits of the jewellery department, whichever was higher. The accounts of the employer were closed each year on 30th June. It was then that the profits were ascertained and the share in the profits was paid to V. M. Parekh. V. M. Parekh was assessed from year to year in respect of his remun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he head "Salary" includes any salary due from an employer to an assessee in the previous year, whether paid or not. It also covers any salary which may be paid or may have accrued to him in the previous year though not due or before it became due to him, and it also covers any arrears of salary paid or allowed to him in the previous year, if not charged to income-tax for any earlier previous year. Basically, therefore, except in the last two cases which are of actual payment, salary which is due from an employer in the previous year, whether paid or not, is chargeable to income-tax. We have, therefore, to consider whether any amount was due to the deceased at the time of his death as and by way of salary although it was not paid to him or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share of the profit only if he served the company for a full year ; or whether he had no right to receive or whether it could be said that he lost such right, if he could not serve the company for the full year but only for a part thereof by reason of his death before the completion of the year. The court considered the decision of the Supreme Court in the case of Sassoon (E. D.) and Co. Ltd. v. CIT [1954] 26 ITR 27 and distinguished the terms of the contract in that case from the contract in the present case. The court said that, in the present case (at p. 846) "there is no real distinction between the monthly payment of Rs. 150 and the payment in the share of profits. They must be taken to accrue to the deceased from month to month ; howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to receive as its remuneration, subject to a minimum, a commission of certain per cent per annum on the actual net profits of the "U" company which was due to them on March. 31 of every year. On December 1, 1943, "S" company assigned their office as managing agents to "A" company, including their right to receive any commission. The Supreme Court was required to consider whether the annual remuneration received by "A" company could be due pro rata as the income of the "S" company or "A" company. The court held, looking to the terms of the agreement between the parties, that the managing agent's right to receive remuneration accrued only at the end of the year and that it cannot be said that "S" company had earned any income for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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