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1972 (8) TMI 61 - SC - Income TaxWhether the 10 per cent. gross profit payable to the assessee under the terms of the agreement appointing him as the managing director is liable to be assessed as salary or under the head "income from business"? Held that:- A perusal of the articles and terms and conditions of the agreement definitely indicates that the assessee was appointed to manage the business of the company in terms of the articles of association and within the powers prescribed therein. Every power which is given to the managing director, therefore, emanates from the articles of association which prescribes the limits of the exercise of that power. The powers of the assessee have to be exercised within the terms and limitations prescribed thereunder and subject to the control and supervision of the directors which, in our view, is indicative of his being employed as a servant of the company. We would, therefore, hold that the remuneration payable to him is salary.
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