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TMI Blog1978 (1) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... f salary and, therefore, according to the Income-tax Officer, the assessee was not entitled to any exemption under section 10(13A) of the Income-tax Act, 1961, in respect of the house-rent allowance received by him from Messrs. Iran Tea Trading Co. Private Ltd. The assessee had received house-rent allowance of Rs. 6,600 in each of the two years under consideration. The Income-tax Officer included the same in the respective assessments for the two years. There were appeals before the Appellate Assistant Commissioner. It appears that before the Appellate Assistant Commissioner it was not disputed that there was the relationship of employer and employee as between the assessee and Messrs. Iran Tea Trading Co. Private Ltd. It was, therefore, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Act, 1961. He, accordingly, dismissed the appeals. There was a further appeal before the Tribunal. According to the Tribunal, in view of section 17 of the Act giving a wider definition to the term " salary ", the same should be read along with the special definition of the term " salary " as given in the different rules for the purposes of special exemption. In the view of the Tribunal the meaning of the word " salary " could not be restricted merely to periodical payments for services rendered by an employee to his employer. The Tribunal, therefore, accepted the assessee's contention and held that the assessee was entitled to exemption under section 10(13A) of the Act. Upon this, under section 256(1) of the Income-tax Act, 1961, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alary " in the said rule, that is to say, rule 2A, would have the same meaning assigned to it in clause (h) of rule 2 of Part A of the Fourth Schedule to the Income-tax Act, 1961. The Fourth Schedule to the Income-tax Act, 1961, primarily deals with recognised provident funds and rule 2(h) of the said Part A of the Fourth Schedule defines salary " for the pupose of the said Schedule. It provides that " salary includes dearness allowance, if the terms of the employment so provide, but excludes all other allowances and perquisites. " Salary " as such has not been defined. But section 15 deals, with income which will be chargeable to income-tax under the head " salary ". Section 16 deals with the deduction from " salary " and section 17 deals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that the word " contribution " in rule 2(c) of Part A of the Fourth Schedule to the Income-tax Act, 1961, must be read and understood in its own context. The word " salary " had been used in that provision and, therefore, the contribution to be made to the provident fund must be the proportionate amount of salary paid to the employees. Salary was a fixed monthly payment whereas the commission was not a fixed payment and could not be included within the scope and ambit of the term " salary ". The court observed at page 50 of the report as follows : " The commission payable to different categories of salesmen by the company is, therefore, not a, fixed amount. The amounts also vary from salesman to salesman. Payment of commission a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of invalidity of the rule can at all be agitated in this reference jurisdiction, specially so when this aspect of the matter was not canvassed before the Tribunal. Apart from the same, in our opinion, rule 2A is in no way in conflict with the concept codified in section 15, 16 or 17 of the Act. Section 17 specifically provides that the definition given of the salary and other concepts are limited for the purpose of sections 15 and 16 of the Act. Therefore, we find no substance in the argument that rule 2A in any way runs counter to any provision of the Act. Our attention was drawn to the observations of the Division Bench of the Karnataka High Court in the case of Additional Commissioner of Income-tax v. P. Krishna Kamat [1975] 99 ITR 74 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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