Legal Reference Library

To tax or not The IT laws do not clearly distinguish what kind of receipts are capital receipts and what are revenue receipts. A capital receipt is considered to be an amount which is received for loss of capital, for example, the amount received on loss of a source of income. On the other hand, a revenue receipt is an amount which is received as a gain or profit in a transaction, such as profit in trading by a trader. But there are many instances where difficulty arises in ascertaining whether the amount received is for loss of a source of income or profit in a transaction. Such borderline cases give rise to vexing problems and litigation with the tax authorities. Generally, any amount received by a professional from his principal who has engaged him to perform professional activities is considered as revenue receipt and is therefore taxable. For example, the fee received by a doctor, chartered accountant, lawyer or journalist from the person to whom he has rendered his services ...

Supreme Court has, in Nandram vs. M/s Garware Polyster Ltd., held that a complaint against termination of an employee of a company is not only maintainable in a Labour court having jurisdiction of the place where the employee was working, when the termination was ordered, but also the Labour court having jurisdiction of the place where the decision to terminate the employee was taken by the management of Company. In this case, the employee who was initially employed by the company in Aurangabad was later transferred to the company plant in Pondicherry where he was given termination order. He complained before the Labour court which held the complaint as maintainable. But the Industrial Tribunal on revision and later the High Court held that the Labour court at Aurangabad has no jurisdiction. The employee then approached the Apex Court. In a very short judgment, the bench of Justices Kurian Joseph and R.F. Nariman observed “The undisputed position is that the appellant was employed by t...

Federal Labor Court, decision dated February 10, 2015 – 9 AZR 455/13 Facts of the case The employee was employed since more than 20 years. The employer terminated the employment with immediate effect and additionally gave statutory notice of termination under due respect of the applicable notice period in case the dismissal with immediate effect may be invalid. Furthermore the letter of termination said: “In case that only the statutory notice of termination is effective, you are released from your duty to work with immediate effect, taking into account all leave and overtime claims.” The parties reached a settlement ending the employment 5 weeks after notice was given. Although this period would have sufficed to grant the entire leave, the employee claimed compensation for the leave. The Federal Labor Court sided with the plaintiff. The decision According to precedents set by the Federal Labor Court, it was possible so far to grant any remaining days of leave by releasing the empl...

Requirements for the official hearing of an employee Federal Labor Court, decision dated February 12, 2015 – 6 AZR 845/13 High demands have always been placed on terminating an employment relationship by an employer. This is especially true for so-called termination due to suspicion. Even the suspicion of a serious breach of duty can represent important grounds for an extraordinary termination of an employment relationship. A prerequisite is that the suspicion is supported by objective facts and that these suspicions destroy the trust necessary for the continuation of the employment relationship. There is a risk that the employee who will be terminated will be wrongly accused. Accordingly, the employer must make all reasonable efforts to clarify the underlying facts. This also means providing the employee with the opportunity to weigh in and comment on the allegations. The Federal Labor Court has substantiated the requirements for such an official hearing of the employee in the deci...