COMMISSIONER OF INCOME TAX Vs. RITU KAPOOR

JUDGEMENT

(1.) THE assessee is a director of a company named Messrs, Kapoor Motor Engineering (P.) Ltd., along with other directors. Her remuneration as a director for the assessment years 1978-79, 1979-80, 1980-81 and 1981-82, was assessed as income from other sources. She claimed the same to be salary from the company and, on that account, urged that she would be entitled to deduction under Section 16(i) of the Income-tax Act, 1961. Her claim was rejected. Aggrieved by the order, she preferred an appeal before the Appellate Assistant Commissioner where her claim was not accepted and it was held that the Income-tax Officer was justified in disallowing the claim of deduction under Section 16(i) of the Act. In second appeal before the Income-tax Appellate Tribunal by the assessee, relying upon Clauses 50 to 70 of the articles of association of the company, the claim of the assessee that the remuneration received was salary, was accepted for her entitlement to deduction under Section 16(i). THE Revenue sought for a statement of case to this court under Section 256(1) of the Income-tax Act. THE Tribunal has referred the- following question to this court and has stated a case for our answer :

(2.) OTHER directors of the company were similarly assessed and had become successful before the Tribunal by interpretation of the clauses of the same articles of association of the company. In S. J. C. Nos. 20 to 29 of 1987 and batch ( CIT v. Shanti Devi [1993] 199 ITR 800 ) decided on April 22, 1992, this court has answered the question in favour of the Revenue as follows (at page 805) :