TMI Blog1991 (2) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... s has confined his submissions in relation to the following two questions : "1. Whether, on the facts and circumstances of the case, the Appellate Tribunal was legally correct and justified in law in upholding the disallowance of Rs. 23,196 out of the total payment of Rs. 79,996 made to Shri K. R. Sharma ? 2. Whether, on the facts and circumstances of the case, the Appellate Tribunal was legally correct and justified in law in upholding the disallowance of Rs. 32,770 by invoking the provisions of section 36(1)(iii) ?" Shri C. S. Aggarwal, learned counsel for the appellant, vehemently submitted that, having regard to the terms of the agreement, only a sum of Rs. 200 was agreed to be paid by way of remuneration to Shri K. R. Sharma by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artake the character of salary, the percentage basis being the measure of the salary and, therefore, such remuneration or recompense must fall within the expression "salary" as defined in rule 2(h) of Part A of the Fourth Schedule to the Act. The expression "salary" has also been defined in section 17. Under section 17, the expression "salary" has been defined for the purposes of sections 15 and 16 and also for the purpose of section 17 to include wages, any annuity or pension, any gratuity, any fees, commission, perquisites or profits in lieu of or in addition to any salary or wages. Reliance has also been placed on another decision of the Supreme Court in Ram Prashad v. CIT [1972] 86 ITR 122. There, the question was whether the managing d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed into with the view that the services of Shri K. R. Sharma can be availed of by opening a new branch at Moradabad. He was already in the employment of the applicant assessee. On account of his transfer from Delhi to Moradabad, what was needed by Shri Sharma was a substantial increase in his emoluments. The agreement also recites that the whole office at Moradabad would be under the direct control of Shri K. R. Sharma who will supervise the work and look after the work, employment and dismissal of the employees at Moradabad. Further restrictions were placed on him not to do any similar business of the nature done by the assessee while at Moradabad and Shri Sharma will be entitled to get a remuneration of Rs. 200 per mensem and one month bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall apply to any expenditure or allowance in relation to any employee whose income chargeable under the head "Salaries" is seven thousand and five hundred rupees or less. Counsel for the applicant submitted that the expression used in this provision is "income chargeable under the head 'Salary'. So, K. R. Sharma's salary has to be taken into consideration and, on that basis, it should be found as to what is his net salary. What we have to see under the terms of the agreement is as to what is payable to Shri K. R. Sharma in the form of salary, bonus or commission. If Shri Sharma has spent any amount in connection with the business, the same would be recoverable from the assessee at his instance. But, so far as the assessee's assessment is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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