COMMISSIONER OF INCOME-TAX Vs. MENABEN VADILAL PAREKH

JUDGEMENT

(1.) The question which is referred to us at the instance of the Commissioner of Income Tax is as follows :

(2.) The facts leading to this reference are as under : V. M. Parekh was an employee in the jewellery department of Messrs. Batliboi and Co. Private Ltd. There was no agreement in writing between V. M. Parekh and his employers in regard to the terms of his employment and remuneration. But it is an accepted position that remuneration was to be paid to V. M. Parekh by the employers at Rs. 150 per month or a share of 3 annas 9 pies in a rupee in the profits of the jewellery department whichever was higher. The accounts of the employer were closed each year on June 30. It was then that the profits were ascertained and the share in the profits was paid to V. M. Parekh.

(3.) V. M. Parekh was assessed from year to year in respect of his remuneration under the head "Salary". His salary income was computed on the basis of the previous year being Samvat year.