AMALGAMATIONS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, the Tribunal referred the following common question for our opinion :

(2.) THE assessee is a company whose shares were held by the estate of the late S. Anantharamakrishnan. THE assessee-company paid a pension of Rs. 60,000 during 1977-78 and Rs. 55,000 during 1978-79 to one Valli Anantharamakrishnan, wife of the late Anantharamakrishnan, who was the chairman of the assessee-company from 1952 till the date of his death on April 18, 1964. THE board of directors of the assessee-company resolved to pay a pension of Rs. 5,000 per mensem to the widow taking note of the services rendered by Anantharamakrishnan. THE Income-tax Officer disallowed the claim for deduction on the ground that there was no agreement between the assessee-company and Anantharamakrishnan for the payment of any pension and that Anantharamakrishnan was not an employee of the assessee-company and so the payment was not to the widow of an employee. On appeal, the Commissioner of Income-tax (Appeals) upheld the order of the Income-tax Officer. On further appeal, the Tribunal confirmed the disallowance made by the authorities below.