DHIRAJBEN R AMIN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference made at the instance of the assessee by the Tribunal under S. 66(1) of the Indian IT Act, 1922 (hereinafter referred to as the Act). The assessee is an individual and the assessment years in question are 1955 56, 1956 57, 1957 58 and 1958 59, the corresponding previous years being years ending March 31, 1955, March 31, 1956, March, 31, 1957, and March 31, 1958. The following three questions have been referred to us by the Tribunal :

(2.) THE facts leading to this reference are as follows : The assessee belongs to Amin family, which has a substantial interest in the Alembic Chemical Works Ltd. at Baroda and allied concerns. One of this group of concerns is a public limited company known as Alembic Glass Industries Ltd. and there is another limited company called Uday Ltd. Uday Ltd. are the managing agents of Alembic Glass Industries Ltd. On March 21, 1954, the Alembic Glass Industries Ltd., the managed company, passed a resolution of the board of directors appointing the assessee as Industrial Relations Officer (Social) of the managed company. Under the resolution, she was to be paid Rs. 1,000 per month. As regards the other limited company, Uday Ltd. by a resolution, dated February 4, 1955, of the board of directors of that company, it was resolved that the assessee be paid 20per cent of the profits as her remuneration for the year 1954 and onwards for the services that she would be rendering to the company and the profits were to be computed for this purpose before charging the said remuneration. In the income tax assessment of Alembic Glass Industries Ltd. and Uday Ltd., the amounts paid to the assessee were claimed as deductions, but in the case of each of these two companies these payments were disallowed by the ITO concerned for the assessment years in relation to which the present reference has arisen. In the case of Alembic Glass Industries Ltd., it was found by the ITO that the payments made to the assessee by the company and styled as "salary" were nothing but gratuitous payments made to her because of the position which her family enjoyed with that company. In the case of Uday Ltd., the ITO found that the payments were merely gratuitous made to a member of Amin family by virtue of the controlling power which the family exercised over the managed and the managing companies.

(3.) ON behalf of the respondent, the learned Advocate General has urged before us a preliminary objection regarding questions Nos. 1 and 2 out of the three questions referred to us. In this connection, the learned Advocate General has pointed out to us that the Tribunal pronounced its order on appeal before it on July 17, 1964, and the orders passed by the Tribunal were received by the assessee on October 9, 1964. Within the period of 60 days counting from October 9, 1964, application for reference under S. 66(1) of the Act were preferred to the Tribunal on December 5, 1964, and in each of these four applications only one question was asked for, viz. : " Whether the assessee was entitled to earned income relief on the salary and remuneration received by her from Alembic Glass Industries Ltd. and Uday Ltd. and which were assessed unter the head "salary" ? Question No. 3 which has been referred to us is substantially the same question which the assessee asked the Tribunal to refer to the High Court by her four applications, each for the different year of assessment. The applications for the reference were preferred in the Form R(T), which is the prescribed form for preferring a reference application under S. 66(1) of the Act. On February 5, 1965, there was a preliminary hearing of the four applications and on February 6, 1965, the Tribunal prepared a draft statement of the case and that was naturally in connection with the question which was sought to be referred to the High Court till that stage. The four applications were thereafter fixed for hearing before the Tribunal on March 19, 1965 and April 9, 1965. But from the record it does not become clear as to what transpired on those two dates. Most probably the matters were not taken up on those two dates. Some time between April 9, 1965 and April 23, 1965, the assessee preferred an application praying that two more question should be referred to the High Court along with the original question for which the reference was asked for on December