TMI Blog1955 (3) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal's order in Income-tax Appeal No. 583 of 1951-52. The following question has been referred by the Income-tax Appellate Tribunal, Bombay, for judgment: Whether on the facts and circumstances of the case the sum of ₹ 10,000 received by the assessee is liable to be assessed as the assessee's income? 2. The assessee is K.B.M.E.R. Malak. He was governing director of the M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... managing director of the company. These three persons were collectively paid by the managing agents a monthly remuneration of ₹ 2,000 which was divided amongst the three persons in the ratio of 3:4:9. In the meeting of the board of directors of the managing agents held on 8th May, 1945, the following resolution was passed: Resolved unanimously that the shares worth ₹ 40,000 (R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his amount can be said to be compensation for loss of employment within the meaning of explanation 2 to section 7(1) of the Indian Income-tax Act. 5. It is to be noted that the assessee continues to be the governing director of the managing agents, although his remuneration has been reduced. As a matter of fact, it is on account of the commuted value of the amount of reduction that he has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 a year. By a subsequent agreement he released the company from its obligation to pay him the pension and agreed to accept a salary of 2,000 a year in consideration of the company agreeing to pay him 40,000. It was held that neither the pension nor the sum paid to commute it constituted profit of an office within the meaning of rule 1 of Schedule E to the Income Tax Act, 1918. It will be observ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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