COMMISSIONER OF INCOME TAX Vs. SHANTI DEVI

JUDGEMENT

(1.) THE question referred at the instance of the Revenue under Section 256(1) of the Income-tax Act, 1961, for our decision is :

(2.) THE assessees in the different cases are all directors of Messrs, Kapoor Motor Engineering Private Ltd., a company registered under the Companies Act, 1956. THE different cases involve a common question of law, though they pertain to different assessment years and to different assessees. THEse references have, therefore, been heard analogously and are being disposed of by this common judgment. For the relevant years, the assessees were all assessed as individuals and they claimed their remuneration as "salaries" and claimed standard deduction thereon under Section 16(i) of the Income-tax Act, 1961 (for short, "the Act"). THE assessing authority, namely, the Income-tax Officer, did not accept the contention of the assessees that the remuneration received by them were salaries and, accordingly, did not allow the standard deduction. On appeal, the Appellate Assistant Commissioner confirmed the order of the Income-tax Officer. THE Tribunal, however, accepted the contention of the assessees and said that the assessees were entitled to standard deduction treating the remuneration as salaries on the basis that the assessees received the remuneration as employees of the company. This has led to the filing of the references by the Department.

(3.) I agree.