LACHHMAN DASS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Though these two references are made at the instance of two different assesseds, they raise a question which comes up for consideration in almost similar circumstances and it is, Therefore, convenient to dispose of both these references by a single judgment.

(2.) Lachhman Dass, the assessed in ITR No. 6 of 1971, was an employee of Ganga Sugar Corporation Ltd. During the previous year relevant to the assessment year 1962-63, he received a sum of Rs. 9,500 from his employer company. The assessed's case was that he had suffered certain loss of movable assets in Pakistan at the time of partition to the extent of Rs. 15,430 and that he made a request to his employer to compensate him Therefore and that it was in partial grant of this request that the employer gave him a sum of Rs. 9,500. The question is whether this amount is liable to tax in the hands of the assessed as "profits in lieu of salary".

(3.) In ITR No. 18 of 1971, the assessed, Jai Karan Kohli, was an employee of two sugar mills, the Ramkola Sugar Mills Co. Ltd., and the Mahalakshmi Sugar Mills Co. Ltd. He was there employed in Nawanshahr in Pakistan. It appears that due to the disturbances consequent on and preliminary to the partition of the country he had to shift from Nawanshahr to Lahore, from Lahore to Srinagar and then from Srinagar to Delhi. On July 25, 1961, he made a representation to the management of the companies stating that as a result of all the above disturbances he had suffered considerable losses. He stated that he had requested the earlier proprietor to compensate him for his losses but that no decision had been arrived at during his lifetime. So he gave another representation for granting some compensation for the loss of his movable property. On Aug. 31, 1961, the two companies passed resolutions granting the payment of Rs. 2,500 each to the assessed as compensation for losses sustained by him as a result of partition. Here again the ITO brought the sum of Rs. 5,000 to tax in the hands of the assessed as salary.