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TMI Blog1968 (6) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the addition of Rs. 18,685 on the ground of purchase inflation was sustainable ? " The year of assessment with which we are concerned is 1962-1963, the corresponding accounting period having ended on the 30th of September, 1961. During that year of account one Sri P. Gopinathan Nair who is the husband of the assessee, was paid a sum of Rs. 1,250 per mensem as salary. The salary fixed by the assessee for Sri P. Gopinathan Nair for the period before October 1, 1960, was Rs. 1,000 per month. That the business of the assessee is being managed by the said Gopinathan Nair is not disputed. The business consists of dealing in cashewnuts, processing of the nuts for sale either by way of export or for internal consumption. The assessee owns 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than Nair, amounted to Rs. 20,500. In the preceding year, i.e., 1961-62, the department allowed Rs. 6,000 and the assessee accepted this. In the year 1960-61, as against a claim of Rs. 11,484, the department allowed only Rs. 3,242 and this was also accepted. " The question arising in such cases for determination has now been well settled and it is hardly necessary to refer to any else other than the recent pronouncement of the Supreme Court in Commissioner of Income-tax v. Walchand and Co. Private Ltd. We shall extract a few passages from this judgment : " It is open to the Tribunal to come to a conclusion either that the alleged payment is not real or that it is not incurred by the assessee in the character of a trader or that it is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inathan Nair by the assessee and that these decisions were not challenged. This, we do not think, has any relevancy in deciding the question as to what can be reasonably claimed as an expenditure coming under section 10(2)(xv) of the Indian Income-tax Act, 1922, for the particular year in question. The other circumstance relied on by the Tribunal is a comparison of the salaries paid by others engaged in similar business to their so-called managers. Comparisions in such circumstances are always dangerous and not at all clinching. What a particular employee should be paid will naturally depend upon what responsibility he has been asked to shoulder and what qualifications and experience the person who has been employed possessed at the time he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There are eight factories and these have to be managed. It was suggested that the so-called managers in each of the factories drawing a salary of Rs. 150 per month would discharge the managerial functions in these factories. The suggestion seems to be ridiculous. It is difficult to get even a clerk for Rs. 150 in this State and it is impossible to imagine that a person capable of discharging managerial functions can be obtained for Rs. 150 per month. Even if they are called managers, they cannot be understood as managers. We are not satisfied that there was material before the Tribunal which would justify a reasonable conclusion that extraneous considerations weighed with the assessee in fixing up the salary of the said Gopinathan Nair a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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