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2002 (11) TMI 57 - HC - Income TaxDuring the previous year ended on March 31, 1973, and relevant to the assessment year 1973-74, the assessee was the managing director of Modi Industries Limited and a director in Modipon Limited - In his return of income for the relevant assessment year, the assessee did not disclose any remuneration received from Modipon. Article 111 of the articles of association of Modipon, dealing with payment of remuneration to the directors - "Whether, Tribunal was right in law in holding that no remuneration from Modipon Ltd. accrued to the assessee during the previous year relevant to the assessment year 1973-74?" - Remuneration at one per cent. of the net profits of the company was to be determined in the manner laid down in the Companies Act. For the assessment year 1973-74, the company closed its accounts on February 28, 1973, and, therefore, the question of payment of the remuneration to the directors, based on the net profits in terms of the said article could arise only on February 28, 1973, or thereafter, when the net profits of the company were determined. The board of directors having decided to forgo the said remuneration, much prior to the said date, the contention of the Revenue that right to receive remuneration accrued from month to month and the assessee had relinquished his right to claim the remuneration after it had become due, is without any substance.
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