Salami - Definition - Law Dictionary Home Dictionary Definition salami

Definition :

Salami, 'salami' is a single payment made for the acquisition of the right of the lessor by the lessee to enjoy the benefits granted to him by the lease. That general right may properly be regarded as a capital asset and the money paid to purchase it may properly be held to be a payment on capital account, Maharaja Chintamani Saran Nath Sah Deo v. CIT, AIR 1972 SC 80 (81): (1971) 2 SCC 521: (1972) 1 SCR 36.

'Salami' is defined as; 'a free gift by way of compliment or in return of a favour'. Salami is a payment by the tenant as a present or as price for parting by the landlord with his rights under the lease of a holding. It is a lump sum payment as consideration for what the landlord transfers to the tenant, Member for the Board of Agricultural Income Tax v. Sindhurani Chaudhurani, AIR 1957 SC 729 (733): (1955) SCALE 772: 1957 ITR 169.

Salami, are (i) its single non-recurring character; and (ii) payment prior to the creation of the tenancy. It is the consideration, paid by the tenant for being let into possession, and can be neither rent nor revenue but is a capital receipt in the hands of the landlord. The payment may be made in a single sum, but that is not a conclusive test, for salami can be paid in a single payment or by installments. The real test is whether the said amount paid in a lump sum, or in instalments, is the consideration paid by the tenant for being let into possession, CIT, Assam v. Panbari Tea Co. Ltd., AIR 1965 SC 1871: (1965) 2 SCJ 350: (1965) 2 ITJ 242: (1965) 57 ITR 1.

Salami, denotes a free gift made by way of compliment or in return for a favour, Legal Remembrancer, West Bengal v. Abdul Wadud, (1951) ILR 1 Cal 547.

Salami, is something quite different from rent. The two things are two quite different classes. Whatever money by the figure of standard rent determined under section 9 of the West Bengal Premises Rent Control (Temporary Provisions) Act. 'Salami' was the amount paid in addition to that rent, West Bengal v. Abdul Wadud, ILR (1951) 1 Cal 547; State of Madhya Pradesh v. Azad Bharat Finance Co., 1967 SC 276.