C o u rte sy | m a n m o h a n . ko lka ta @ g m a ilco
. m Salary is the recompense or consideration given to a person for the pains he has bestowed upon another’s business Convile vs. CIT (1935) 3 ITR 404 Courtesy | manmohan.kolkata@gmail.com employee of the Government, even though he receives retainer fee and his contract for service depends on pleasure of the Governor. Such retainer fee shall be taxable under the head “Profits and gains of business or profession”.
CIT vs Govinda swaminathan
233 ITR 264 (Mad) allowed to work in the paying clinic run in the college at some share of fee from such clinic. Such share of fee received by employee-doctors shall be taxable as salary, because the authority to work in the clinic, fee of the clinic, share of doctors, etc. were prescribed by the employer. CIT vs Dr. Mrs. Usha Verma (P&H-2002) Amount of scholarship given by employer –company to children to its employee solely at its discretion without reference to terms of employment is not assessable as perquisites. CIT vs. M.N. Nadkarni (1986) 161 ITR 544(BOM) Remuneration received by judges is taxable under the head “Salaries” even though they are not having any employer. Justice Deoki Nandan Agarwal vs Union of India, 237 ITR 872 (SC) Remuneration received by judges is taxable under the head “Salaries” even though they are not having any employer. Justice Deoki Nandan Agarwal vs Union of India, 237 ITR 872 (SC) Salary & Wages are identical in the Income-tax Act
Gestetner Duplicators (P.) ltd.
vs CIT [1979] 117 ITR 1 (SC) Salary income must be real and not fictitious
Reade v. Brearley (1933) 17 TC-
687 Once salary has been earned by an employee, its subsequent waiver does not make it exempt from tax liability. CIT vs. Gian Singh Kalasi (1980) (Del) provided rent free accommodation by the employer , he will be chargeable to tax even though he does not utilize the accommodation (at his own will) CIT vs. Bawa Singh Chauhan (1984)150 ITR 8 (Delhi) Any increment in salary with retrospective effect which have not been taxed in the past, such arrears will be taxed in the year in which it is allowed. Sardar Arjun Singh Allhuwalia vs CIT (1980) 124 ITR 347 (MP) The reduction in salary of an employee cannot be effected with retrospective effect. Such reduction can operate only prospectively.
Raghunathan (T.M.) vs CIT
(1998) 231 ITR 826 (Mad) For computation of salary, method of accounting followed by employee is irrelevant. CIT vs Thiagaraja Chetty & Co. (1953) 24 ITR 525 (SC) a Managing Director retired and reappointed, then it shall not be treated as termination of service for the purpose of computation of gratuity etc. CIT vs Savitaben N Amin (Smt.) (1986) 157 ITR 135 (Guj) entertainment allowance u/s 16 is permissible even if the amount received as entertainment allowance is not proved to have been spent CIT Vs. Kamal Devi [1971] 81 ITR 773 (Delhi). The word completed years of service appearing in sec. 10(10) should be interpreted to mean the employees total service including service under former employer(s), provided he was not paid gratuity by the former employer(s) CIT vs P.M. Mehra (1993) 201 ITR 930 (Bom). in Pakistan, migrated to India at the time of partition. He suffered loss of personal movable property in Pakistan due to partition. He applied to his employer for compensating him for such loss. Certain payments were given to him as compensation. It was held that such payments should not be taxed as ‘profit in lieu of salary’
- Lachman Dass Vs. CIT [1980]
124 ITR 706 (Delhi). Pension received from United Nations Organisationis not taxable. Further, pension received by a widow of the United Nations ex-officials from UN Joint Staff Pension Fund is also exempt. CIT vs. Janaki Loganathan (2002) 257 ITR 620 (Mad.) Allowance means fixed quantum of money given regularly in addition to salary to meet particular requirement.
Mutual Acceptance Co. vs. FCT
(1944) 69 CLR 389 Compensatory allowance received by judge under Article 222(2) of the Constitution is not taxable since it is neither salary nor perquisite
perquisite—Bishamber Dayal Vs. CIT [1976] 103 ITR 813 (MP). Perquisite may be contractual or voluntary perquisites .
CIT vs S.S.M. Lingappan (1981)
7Taxmann 71 (Mad.) Only legally originated benefit from employment can be taxed as perquisite. A benefit derived by unauthorised means shall not be taxable. CIT vs C. Kulandaivelu Konar (1975) 100 ITR 629 (Mad.) Fixed amount paid to employees by way of leave travel allowance shall not be exempt u/s 10(5). Dr. Reddy laboratories Ltd. vs. ITO 58 ITD104 The legal representative is not liable for payment of tax on income that has not accrued to the deceased till his death. Arvind Bhogilal vs. CIT (1976) 105 ITR 764 (Bom.)