9911796707
TMI Blog1982 (8) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... f Life Insurance Corpn. of India for his employer is not assessable under s. 15 of the IT Act, 1961". 2. We have heard the parities and we find that no referable question of law arises out of the order of the Tribunal and the question as framed by the Commissioner does not arise at all out of the order of the Tribunal. The Tribunal had given clear a cut finding that the assessee was not an ordinary employee of Life Insurance Corpn. as understood in common parlance. In so far as the nature of employment of the assessee is concerned, the Tribunal gave the following finding about it in paras 4 and 5 of the order: "4. Shri Raj Kumar Sethi is an employee of the Life Insurance Corpn. of India. During the accounting period relevant to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regard, the observations of the Tribunal are contained in paras 6, 7 and 8 which are as under: "6. The life Insurance Corpn. had introduced a scheme of incentive bonus. The incentive bonus was linked as a percentage of business secured in excess of certain stipulated premium income. For example, for appraisal year ending on or after 31st March, 1970, incentive bonus shall be paid to the Development Officer on the following basis: "(ii) For appraisal year ending on or after 31st March 1970, Incentive Bonus shall be paid to the Development Officer on the following basis: Stipulation Basic Incentive Bonus (a) Scheduled first year's premium income in Excess of 5 times the total expenses incurred on the Develo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim on the ground that he was not supposed to keep any employee for earning salary/allowance." 8. For the asst. yr. 1978-79, the above decision arrived at by the ITO was applied and the claim of the assessee for deduction of 40 per cent expenses against the incentive bonus was rejected. When these assessments were taken up in appeal, the AAC accepted in part claim of the assessee and allowed expenses @ 20 per cent of the gross incentive bonus received during the accounting period relevant to each of the assessment years under appeal. While allowing this quantum of expenses, he gave a finding as under: "5. I have considered the submissions made on behalf of the appellant. I have also perused the relevant assessment orders. I am incli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given very careful consideration to the rival submissions and the facts on record. Chapter IV of the Act deals with the computations of total income and in s. 14 the heads of income are enumerated, salaries being the first. The connotation of salaries is provided in s. 15 which is as under: Salaries: 15. The following income shall be chargeable to income-tax under the head "Salaries"— (a) any salary due from an employer or a former employer to an assessee in the previous year, whether paid or not; (b) and salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer though not due or before it became due to him; (c) any arrears of salary paid or allowed to him in the previous year by o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provident fund, to the extent to which it is chargeable to tax under sub-r. (4) thereof." A careful perusal of the definition of salary given in s. 17 of the Act shows that the legislature has carefully avoided the use of the word bonus in it. This appears to be quite in accordance with the scheme of the Act because there is a special provision relating to the deduction of bonus while computing the total income of an assessee in accordance with the provisions of the Act. Section 36(1)(ii) of the Act provides that any sum paid to an employee as bonus or commission for services rendered, where such sum would not have been payable to him as profits or dividend if it had not been paid as bonus or commission may be deducted in computing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) r/w r. 2(h) of Part A of the Fourth Schedule of the Act would have to be understood as only covering a periodical payment excluding all types of allowances and perquisites and that bonus is in the nature of an allowance and, therefore, for the purpose of s. 40(c) salary would not include bonus. In that case, according to the Revenue, bonus did not form even an integral part of salary. 13. In the case before us, incentive bonus was earned by the assessee by performance of filed duties in securing insurance policies for the Corpn. For the year ending 31st March, 1976, he introduced record business of Rs. 74,17,000 on 515 lives and emerged as the leader of Chandigarh Division. This is in recognition of the efforts put in beyond the call o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
