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1965 (4) TMI 16 - SC - Income TaxWhether on the facts and in the circumstances of the case the disallowance of a sum of ₹ 19,796 out of the remuneration paid to Mr. T. M. Ayyadurai is justifiable ? Whether a sum of ₹ 17,346, which represented compensation received by the assessee for the loss of the managing agency of the Nellore Power and Light Company Ltd., is income liable to tax? Held that:- It is true that if, on a consideration of the relevant materials, the Appellate Tribunal is of the opinion that a particular remuneration stipulated to be paid is not bona fide or is unreasonable, the High Court in exercising its advisory jurisdiction has no power to interfere with that opinion. But the material circumstances relating to the nature of the contract, the services to be performed and the nature of the duties by the employee were not at all taken into account by the Tribunal and the income-tax authorities. We, therefore, agree with the High Court that the first question should be answered in the negative. The High Court was of the opinion that compensation received for taking over the Nellore Power and Light Company Ltd. was a capital receipt not liable to be taxed, and on the materials placed before us, we are unable to disagree with the High Court on this question. Appeal dismissed.
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