JUDGMENT (Per Smt. Sujata Manohar, J.) : The question which is referred to us at the instance of the Commissioner of Income Tax is as follows : Whether on the facts and in the circumstances of the case, the finding that the share of three annas nine pies in the rupee of jewellery department of M/s. Batliboi & Co. Pvt. Ltd. did not accrue to the deceased during his life time and as such could not be taxed as the income of the deceased, is in law justified ? The facts leading to this reference are as under : V. M. Parekh was an employee in the jewellery department of M/s. Batliboy & Co. Private Ltd. There was no agreement in writing between V. M. Parekh and his employers in regard to the terms of his employment and remuneration. But it is an accepted position that remuneration was to be paid to V. M. Parekh by the employers at Rs. 150/- per month or a share of 3 annas 9 pies in a rupee in the profits of the jewellery department, whichever was higher. The accounts of the employer were closed each year on 30th June. It was then that the profits were as ascertained and the share in the profits was paid to V. M. Parekh. V. M. Parekh was assessed from year to year in respect of his remuneration under the head 'Salary'. His salary income was computed on the basis of the previous year being Samvat Year. V. M. Parekh died on 9th January, 1961. The employers worked out their profit in the jewellery department for the accounting year ending on 30th June, 1961 and determined the remuneration to V. M. Parekh on pro rata basis for the period 1.7.1960 to 9.1.1961. This share in the profits was credited to the account of V. M. Parekh. The amount so credited to the account of V. M. Parekh on 30th June, 1961 was Rs. 6,75,244/-. The respondent Smt. Menaben Vadilal Parekh as the legal heir of the deceased V. M. Parekh filed a return of income and claimed that the sum of Rs. 6,75,244/- was a capital receipt and was not taxable as salary income of the deceased. The Tribunal has come to a conclusion that the higher remuneration with reference to the profits of the employer was payable only on the 30th of June each year. 6,75,244/- was a capital receipt and was not taxable as salary income of the deceased. The Tribunal has come to a conclusion that the higher remuneration with reference to the profits of the employer was payable only on the 30th of June each year. It upheld the contention of the assessees that the right to receive the share of the profits did not accrue to the deceased during his life time and hence it could not be taxed as the salary income of the deceased. We have to consider in the present case whether the amount of Rs. 6,75,244/- which was credited to the account of V. N. Parekh on 30.6.1961 as his remuneration for the period 1.7.1960 to 9.1.1961 can be taxed as salary income of the deceased. Under section 15 of the Income-tax Act income which is chargeable to tax under the head "salary" includes any salary due from an employer to an assessees in the previous year whether paid or not. It also covers any salary which may be paid or may have accrued to him in the previous year though not due or before it become due to him, and it also covers any arrears of salary paid or allowed to him in the previous year if not charged to income-tax for any earlier previous year. Basically, therefore, except in the last two cases, which are of actual payment, salary which is due from an employer in the previous year, whether paid or not, is chargeable to income-tax. We have therefore to consider whether any amount was due to the deceased at the time of his death as and by way of salary although it was not paid to him; in other words, whether V. M. Parekh had a right to receive any salary at the time when he died. The terms of the contract between V. M. Parekh and his employer are unfortunately not reduced to writing. However, it is clear that he was paid a remuneration at the rate of Rs. 150/- per month or a share of 3 annas 9 pies in a rupee in the profits of the jewellery department, whichever was higher. There is no dispute that this payment is by way of salary. The share in the profits is to be substituted for Rs. 150/- per month, if the former is higher. 150/- per month or a share of 3 annas 9 pies in a rupee in the profits of the jewellery department, whichever was higher. There is no dispute that this payment is by way of salary. The share in the profits is to be substituted for Rs. 150/- per month, if the former is higher. This would clearly indicate that the contract is for payment of a monthly salary. But, the share in the profit in lieu of salary can be determined only at the end of the accounting year of the employer. It cannot, therefore, be calculated and paid to the employee till the end of the accounting year. But that does not deprive this payment of the character of salary. Nor does it imply that the salary had not accrued to the employee in the previous months during which he had worked as an employee. He had a right to receive this amount although the actual computation and payment were at a later date. In the case of this very assessees in Estate Duly proceedings. Mrs. Menaben V. Parikh v. Controller of Estate Duty, Bombay, reported in (1979) 116 ITR 840 a Division Bench of this Court considerated the nature of the contract of employment between V. M. Parekh and his employer for the purposes of determination of estate duty. The Court considered whether the deceased had a right over the share of the profit only if he served the company for a full year; or whether he had no right to receive or whether it could be said that he lost such right, if he could not serve the company for the full year but only a part thereof by reason of his death before the completion of the year. The Court considered the decision of the Supreme Court in the case of Sassoon (E.D.) & Co. Ltd. v. CIT reported in (1954) 26 ITR 27 (SC) and distinguished the terms of the contract in that case from the contract in the present case. The Court said that in the present case "there is no real distinction between the monthly payment of Rs. 150/- and the payment in the share of profits. Ltd. v. CIT reported in (1954) 26 ITR 27 (SC) and distinguished the terms of the contract in that case from the contract in the present case. The Court said that in the present case "there is no real distinction between the monthly payment of Rs. 150/- and the payment in the share of profits. They must be taken to accrue to the deceased from month to month; however, the amount of profits accrued to him becomes due and payable to him only after June when the accountable year of the company would come to an end and when the profits, if any, can be ascertained". It held that any other conclusion would amount to a mixing up of computation or ascertainment of the amount due to the deceased with accrual of the same. Although the Division Bench has used the phrase "amount due and payable" with reference to payments made in June of each year the context makes it clear that the Court made a distinction between accrual of the right to receive and the actual computation on ascertainment of the amount due and payable. The Court held that the right to receive payments even if it was in the form of a share of the profits, accrued to the deceased from month to month although computation took place on the 30th June each year. We do not see why the same reasoning cannot apply in the present case. In our view the right to receive a pro rata share in the profits had accrued to the deceased at the time of his death although the amount was computed after the death of the deceased. Mr. Dwarkadas strongly relied upon the decision of the Supreme Court in the case of Sassoon (E.D.) & Co. Ltd. v. Commissioner of Income Tax, reported in (1954) 26 ITR 27 (SC). In the case before the Supreme Court the contract related to the Managing Agency of E.D. Sassoon & Company Ltd. This company is (S Company) was the Managing agent of 'U' Company. Under the terms of the managing agency, 'S' Company was entitled to receive as its remuneration, subject to a minimum, a commission of certain per cent per annum on the actual net profits of the 'U' company which was due to them on the 31st of March every year. Under the terms of the managing agency, 'S' Company was entitled to receive as its remuneration, subject to a minimum, a commission of certain per cent per annum on the actual net profits of the 'U' company which was due to them on the 31st of March every year. On 1st December, 1943 S' Company assigned their office as managing agents to 'A' Company, including their right to receive any commission. The Supreme Court was required to consider whether the annual remuneration received by 'A' company could be due pro rata as the income of the 'S' company or 'A' company. The Court held, looking to the terms of the agreement between the parties, that managing agent's right to receive remuneration accrued only at the end of the year and that it cannot be said that 'S' company had earned any income for the broken period, nor had any income accrued to them in respect of the broken period. The Supreme Court looking to the terms of the Managing agency agreement, therefore held that the right to receive remuneration accrued to the managing agent only at the end of the year. There is also a similar case dealing with a managing agency agreement which is in the case of Cotton Agents Ltd. v. Commissioner of Income tax (Central), Bombay, reported in (1960) 40 ITR 135. In this case also the terms of the contract of the managing agency provided that the commission shall become due to the managing agent at the end of each financial year or for any other period for which the accounts of the company are to be laid before the general meeting, and shall be payable and paid immediately after accounts have been passed in the general meeting. In both these cases the terms of the contract made it clear that the commission became due only at the end of the specific period. The right to receive the commission therefore accrued only at the end of the period specified. Such is not the present case. The remuneration is by way of salary. Salary is a monthly salary or profits in lieu of it, if higher. It has through out been taxed as salary. These circumstances in our view, lead to the conclusion that the right to receive salary accrued to the deceased from month to month. The sum of Rs. The remuneration is by way of salary. Salary is a monthly salary or profits in lieu of it, if higher. It has through out been taxed as salary. These circumstances in our view, lead to the conclusion that the right to receive salary accrued to the deceased from month to month. The sum of Rs. 6,75,244/- which was byway of salary for the period 1.7.1960 to 9.1.1961 had accrued to the deceased at the time when he died. In the premises the question which is referred to us is answered in the negative and in favour of the revenue. No order as to costs.