TMI Blog1968 (8) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ax, Delhi, Rajasthan And Madhya Pradesh R. B. Suraj Narain (Represented By Bishan Narain And Another) Versus Commissioner of Income-Tax, Delhi, Rajasthan And Madhya Pradesh A. N. GROVER., V. RAMASWAMY. and J. C. SHAH. JUDGMENT Civil Appeal No. 2521 of 1966. The judgment of the court was delivered by RAMASWAMI J.-- The appellant, Shri Ishwar Lal, hereinafter referred to as " the assessee ", was one of the Directors of M/s. J. N.Singh Co. Ltd., hereinafter referred to as " the company ". The assessee received for the financial year 1948-49 by way of director's fee a sum of Rs. 1,200 in addition to an annual remuneration of Rs. 10,000. This remuneration was paid to the assessee in pursuance of a resolution passed at a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of director's remuneration was disallowed. This disallowance was upheld in appeal. Meanwhile the assessee was also assessed on the above remuneration in his 1941-42 assessment which was paid earlier in 1940. There has, therefore, been a double assessment of this sum. I, therefore, direct that this sum shall not be subjected to tax in his personal assessment but will be included in his total income for rate purposes. " The company did not pay any such remuneration for the years ending June 30, 1941, to June 30, 1948, and thereafter, the remuneration was paid for the first time to the assessee and other directors for the previous year ending on June 30, 1949, corresponding to the assessment year 1950-51. The company did not claim the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition for the application of the terms of the Notification referred to in question No. (1) to the facts of the present case that the amount of remuneration should have been claimed as a deduction by the company in its assessment and whether it was necessary for the company to make the claim year after year ? " By its judgment dated February 5, 1962, the High Court answered the questions in favour of the Commissioner of Income-tax and against the assessee. This appeal is brought by certificate granted by the High Court under section 66A(2) of the Income-tax Act, 1922. It is necessary at this stage to set out the terms of the Notification No. 878-F dated March 21, 1922, as amended by Notification No. 8 of March 24, 1928, which is to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax authorities, whether or not the company claimed such deduction and that the amount should have been included in the profits of the company and was assessed to tax. In our opinion, the argument put forward on behalf of the appellant is well-founded and must be accepted as correct. The obvious Purpose of the Notification in question is to avoid double taxation by providing that if the amount has been assessed and charged in the hands of the company the same should not be assessed and charged over again in the hands of the assessee. There is nothing in the language of the Notification to suggest that it was a condition precedent for getting the benefit of the Notification that the company should have expressly made a claim for deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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