9911796707
TMI Blog1984 (5) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... Mackinnon Mackenzie Co. (P.) Ltd., the agents for the UK Co., with effect from the termination of the last voyage of steamship 'Karanjia' in 1976. The assessee by his letter dated 22-6-1976 addressed to Mackinnon Mackenzie Co. (P.) Ltd. requested for a reasonable pension considering the length of his service and the present prevailing living conditions. Mackinnon Mackenzie Co. (P.) Ltd. after due consultation with its London principal, agreed to offer a lump sum payment of Rs. 1,25,000 instead of a monthly annuity, the payment to be made to him in two instalments, the first in April 1977 and the next in April 1978. While conveying the sanction for the payment of this amount, Mackinnon Mackenzie Co. (P.) Ltd. placed on record its Lon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exemption under section 10(10A). 4. The revenue has, therefore, filed an appeal before the Tribunal on the plea that the learned Commissioner (Appeals) had erred in holding that there was an employer-employee relation between the UK Co. and the assessee and in directing the ITO to grant the lump sum payment of Rs. 62,500 received by the assessee as commutation of pension. The learned departmental representative in support of the plea on behalf of the revenue, invited our attention to the first letter of the UK Co. dated 23-8-1937 stating that the assessee was appointed as a 'passenger broker' of the company. Further, according to the letter defining the terms of appointment dated 30-8-1937, the remuneration payable to him was Rs. 400 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up that the payment made to the assessee was in the nature of additional fees for the services in the last 40 years and for the professional services rendered by the assessee. 5. The learned counsel for the assessee has referred to the terms of appointment of the assessee and stated that the employer was a limited company. Its business was being carried on by the employees such as the assessee. Referring to the terms of employment, he stated that the assessee was expected to carry on the business of the UK Co. The description of the assessee as a broker was to describe the nature of the business to be carried on by the assessee on behalf of the UK Co. The terms were absolutely clear. He was being paid a nominal basic salary. The addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purposes of his duties. It was argued by the learned counsel for the assessee that all the expenses claimed by the assessee were only of such nature which were expended by him wholly, necessarily and exclusively for the performance of his duties. The learned counsel proceeded to explain that on the enactment of the 1961 Act, section 16(1) was placed on the statute book which was in pari materia with section 7(2) of the 1922 Act. Gradually this allowance came to be modified and it took the final shape of the standard deduction under section 16(1) as now admissible. As to the nature of the receipts received by the assessee, the learned counsel has proceeded to argue that what the assessee has received is the commuted pension as stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was initially for a period of one year and which was subject to renewal from year after year. The remuneration was also fixed initially at the rate of Rs. 400 per month and later at the rate of Rs. 2,000 per month. The incentive bonus was depended on the passengers booked by him. As to the payment now in dispute before us, the assessee claimed pension considering his length of service, the nature of service and the present living conditions. Instead of a monthly annuity, the employer has considered it advisable to commute it and made payable in two annual installments. 8. As to the objections on behalf of the revenue, in our opinion, the learned counsel for the assessee has adequately met them as detailed in the previous paragraphs. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing a foreign registered company, the employer considered it expedient to make a payment of a lump sum once and for all, as clarified in the letter of Mackinnon Mackenzie Co. (P.) Ltd. dated 25-11-1976. The very nature of the correspondence between the assessee and Mackinnon Mackenzie Co. (P.) Ltd. shows that what the assessee received was the commuted value of the pension. In the circumstances, the order of the Commissioner (Appeals) is unexceptionable and calls for no interference. 10. The assessee has filed a cross-objection on the ground that during the course of the assessment proceedings, the assessee had alternatively contended that the amount of Rs. 62,500 was not taxable as income as it was on account of termination of servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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