Judgment

SHAH (Actg. C. J.): These appeals related to the assessment to tax of M/s. Bengal Enamel Works Ltd. - a public limited company - for the assessment years 1951-52, 1952-53 and 1953-54.

2. The Company is doing business of manufacturing "enamelled-ware". It had originally employed a technician at a monthly salary of Rs. 500. In June, 1941 the technician was relieved, and one Col. Bhattacharya who was a director of the Company was appointed its "Technical Adviser". He was to receive as remuneration 15% of the gross annual profits of the Company. Col. Bhattacharya resigned his office and Dr. Ganguly (Son-in-law of Col. Bhattacharya) was appointed to that office. The Board of Directors resolved on May 18, 1950 to pay to Dr. Ganguly 15% of the gross annual profits (without deducting depreciation) as his remuneration.

3. In the assessment years 1951-52, 1952-53 and 1953-54 the Company claimed under Section 10 (2) (xv) of the Income-tax Act, 1922, as admissible allowance, in computing its taxable income, Rs. 52,947, Rs. 64,356 and Rs. 79,227 respectively paid as remuneration to Dr. Ganguly under the terms of the resolution dated May 18, 1950. The Income-tax Officer, Companies District