9911796707
TMI Blog1987 (4) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... t includible in the total income because provisions of section 10(10) of the Income-tax Act, 1961, applied in respect of the said amount. The ITO rejected the claim on the ground that section 10(10) applied to gratuity received by employee from employer and the assessee was not the employee of LIC but was an agent and as such, said provisions did not apply. The assessee filed appeal and the AAC held that the agent appointed by LIC under the said regulations would come within the ambit of the term "employee" in section 10(10) and as such those provisions would apply to the amount received by the assessee as gratuity. She directed the ITO to allow exemption under the said provision. The department is now in appeal before us and in substance t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of this case. Clause (iii) on which reliance is placed is as follows: "(iii) any other gratuity received by an employee on his retirement or on his becoming incapacitated prior to such retirement or on termination of his employment.....to the extent it does not, in either case, exceed one half month's salary for each year of completed service calculated on the basis of the average salary for the three years immediately preceding the year in which gratuity is paid, subject to a maximum of thirty thousand rupees or twenty months' salary so calculated, whichever is less" Explanation: In this clause "salary" shall have the meaning assigned it in clause (h) of rule 2 of Part A of the Fourth Schedule. In clause (h) of rule 2 of Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his functions under the Regulations is the commission at the rates set out in Schedule II on the first year premiums and renewal premiums received during the continuance of agency in respect of the completed business under his agency and also bonus commission on first premiums as provided in Schedule III (vide clause 10 of the Regulations). The commission received by him cannot be termed as salary. Obviously, it is not possible to calculate "one and half month's salary for every completed year of service" and "average salary" of the previous three years as ordained in clause (iii) of section 10(10). Consequently, the said clause could not apply to amount received by assessee, though termed as "gratuity" in the Regulations. The "gratuity" c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but expenses incurred wholly and exclusively for earning the commission. This fact is also relevant to determine whether assessee was "employee" or not. 10. The learned Representative of the assessee relied on the decision in the Piyare Lal Adishwar Lal v. CIT [1960] 40 ITR 17 (SC) and Gestetner Duplicators (P.) Ltd v. CIT [1979] 117 ITR 1 (SC). Neither of these two decisions has any relevance in the present case. In the first case, terms and conditions of employment clearly indicated that the treasurer was a servant of the bank and emoluments received by him was salary. The nature of work of the treasurer and the control and supervision of the Bank indicated relationship of master and servant such is not present in our case. The second d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
