LAKSHMIPAT SINGHANIA vs COMMISSIONER OF INCOME-TAX, U. P. — 1972 PTD 401

Citation: 1972 PTD 401

Court: Allahabad High Court

Year: 1968

Decision Date: 1968-12-10

Parties: LAKSHMIPAT SINGHANIA vs COMMISSIONER OF INCOME-TAX, U. P.

Headnotes

Case cited as 1972 PTD 401

Judgment Text

Court Name: Allahabad High Court Judge(s): V. G. Oak, T. P. Mukherjee Title: LAKSHMIPAT SINGHANIA vs COMMISSIONER OF INCOME-TAX, U. P. Case No.: Case No. 231 of 1962 Date of Judgment:1968-12-10 Reported As: 1972 PTD 401 Result: answered in the affirmative JUDGMENT JUDGMENT T. P. MUKERJEE, J.------The question raised in this reference relates to the situs of accrual of income being remuneration paid to a director of a company limited by shares. The assessee was one of the six directors of Messrs Straw Products Ltd. (hereafter referred to as the company). The company was registered in Bhopal where the manufacturing operations were carried on. At all material times, Bhopal was an Indian State to which the Indian Income-tax Act, 1922, as it then stood (hereafter referred to as the Act), did not apply. The directors were entitled to receive sitting fees for attending meetings of the board under Article 105-A and further remunera--tion from the company under Article 105-B of the articles of association, the terms of which were as follows : "In the event of the company making profits, the directors shall be entitled to appropriate out of such profits, either a sum which is sufficient to allow a further remuneration of Rs. 5,000 to each director or a sum equal to 5 per cent. Of the net profits as defined under section 105 of the Bhopal State Companies Act, 1945, whichever is higher, and, in the latter case, the directors may distribute among themselves the sum as appropriated in…

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