Home Case Index All Cases Income Tax Income Tax + SC Income Tax - 1962 (12) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1962 (12) TMI 58 - SC - Income TaxWhether on the facts and circumstances of the case, the sum of Rs. 2,21,000, being the value of the shares received by the assessee free of payment is income of the assessee and assessable under section 7 of the Income-tax Act ? Whether compensation received for loss of employment or office or for cessation business is taxable under any of the three sections will fall to be considered, prior to the amendments of 1955, with reference to the general principle of income-tax which is to tax income? Whether it is income or capital in the hands of the assessee? Held that:- Appeal dismissed. Sum of Rs. 2,21,000 received by the respondent as employee from Killick Nixon & Co., his employers, on the occasion of the termination of his services after appropriate notice of one month, was not a payment made as compensation for loss of employment and, therefore, amounted to "profit in lieu of salary" in view of Explanation 2 to section 7(1) of the Act and was, as such, taxable to income-tax. The High Court was, therefore, in error in holding otherwise. It would accordingly allow the appeal with costs and my answer to the question referred would be that the sum of Rs. 2,21,000 received by the respondent is taxable to income-tax as "profits in lieu of salary" under subsection (1) of section 7 of the Act.
|