Supreme Court of India
Case Name: Appellants:- Gestetner Duplicators Pvt.Ltd.
Respondent:- Commissioner of Income Tax,
Decided on: 14.12.1978
Assessee's claim for deduction under section 36(1)(iv) of the Indian Income Tax Act 1961 in respect of three sums of Rs.95,421/-,Rs.1,00,564/- and Rs.1,17,969/- out of Total contribution made by the assessee to a recognised Provident Fund was disallowed in Rule2(h) in Part A of the IV Schedule to the Act"Commission" paid by the assessee to its salesman in terms of their contracts of Employment?
Whether commission should be part of salary for Retirment Benefits Salary?
The assessee is pvt. ltd. company and carries on the business of manufacture and sale of duplicating machines and accessories. It has in its regular employment three catefories of salesmen-machine salesmen,mixed salesmen and supply salesman. As a term of the contract of employment between the assessee and the salesmen of the aforesaid categories, the assessee, besides paying a fixed monthly salary also paid commission to them at fixed percentage of turnover achived by each salesman, the rate of percentage varying according to the class of article sold nad the category to which the salesmen belonged.The assessee made a regular Provident Fund for its employees which was recognised by the Commissioner of Income Tax some time in 1937 and the said recognition continued and was in force during the relevant years in question. In the previous years ending 31st December1961,31st December1962 and 31st December1963 relevant to the assessment years 1962-63,1963-64,1964-65 the assessee made contribut