TMI Blog1951 (12) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... September, 1938. He was previously drawing a salary of ₹ 6,000 per year and later his salary was increased to ₹ 10,000 per year. He ceased to be the director in charge in September, 1938, and since then he was working merely as one of the directors of the company. The private limited company decided to go into voluntary liquidation with effect from 30th September, 1941, and the actual order of dissolution was passed by the District Judge of Kanpur on 8th December, 1941. From the 1st of October, 1941, a new public company, which was floated, took over the business of the private limited company. The Board of Directors of this dissolved company, by their resolution dated 2nd February, 1942, approved and confirmed the payment of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bonus or commission is reasonable, keeping in view the pay of the employee and the conditions of his service, the profits of the business, profession or vocation for the year in question and the general practice in similar businesses, professions or vocations. As no reliance was placed on this section of the Act and as the amount was not claimed as bonus or commission to an employee for the services rendered, the Tribunal has not considered whether the amount paid to Shri Cocolas was a reasonable amount. In the application under Section 66(1) of the Indian Income-tax Act for reference of the question to this Court, the assessee appears to have relied on clause (xv) of sub-section (2) of Section 10 of the Indian Income-tax Act as was done b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it could come to the conclusion that the amount paid to Shri Cocolas had not been expended wholly and exclusively for the purposes of such business. The circumstances relied on by the Tribunal appear to us to justify the conclusion arrived at by it. Shri Pathak has, however, urged that the point of law that he wanted to urge is that the Tribunal committed an error of law in its view that the amount spent could not be held to be wholly and exclusively laid out for purposes of the business unless it related to expenditure for purposes of future business. In other words, if an employee has worked well, it is open to the assessee to recognise such exceptionally good service, which has resulted in profits to the assessee, by making payment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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