1937 (2) TMI 9

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..... n the parties provided that it was terminable at six months' notice. On 19th October 1926, Messrs. Brunner Mond Co., Ltd., gave notice to Messrs. Katrak and Co. terminating their agreement from 30th April 1927, that is to say, at the expiry of full six months from the date of the notice. The reason for this was that Messrs. Brunner Mond and Co., Ltd., wanted to open their own branch office at Karachi. In consideration however of the services rendered by Messrs. Katrak and Co., for several years past in helping Messrs. Brunner Mond and Co., Ltd., to build up their business, the latter firm agreed to give K.B. Katrak a monthly allowance of ₹ 500 per month so long as he lived and further agreed that in the event of his death before .....

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..... covenanting to pay (a) his debts, (b) a certain sum for the marriage expenses of the assessee's daughter, and (c) certain annual sums to him during his lifetime, and it was contended that the assessee was not liable in respect of the annual installments inter alia on the ground that such installments were not in the nature of an annuity but a capital sum being the purchase price of the property conveyed by him. In dealing with this case their Lordships have said: Their Lordships agree with the opinion expressed by the Chief Justice upon this point. The word 'income' is not limited by the words 'profits' and 'gains'. Anything which can properly be described as income is taxable under the Act unless expressly e .....

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..... were permitted to enjoy a part of the fruits of the tree provided of course they did not try to destroy the tree by entering into a competitive business. The produce of this tree which they were permitted to enjoy was indubitably income assessable as such. In the Privy Council cases referred to above there is no reference to the definition of salary as given in S. 7, Income tax Act. In that section salary is denned as including not only what is originally known as salary but also wages and any annuity, pension or gratuity, fees, commissions, perquisites or profits received by the assessee in lieu of or in addition to any salary or wages. The agreement to pay a certain periodical sum of money during the life time of K.B. Katrak and in the ev .....

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