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TMI Blog2007 (5) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case, the Tribunal was right in holding that the deduction allowable under section 8OHHA with regard to the income derived from industrial undertaking after setting off such income against loss from non-industrial unit in term of section 8OAB and section 71 of the Income-tax Act, 1961 ?" 2 So far as the second question is concerned, it has been noted in the statement of case itself that for the earlier assessment year 1982-83, the same issue was decided in favour of the Department and against the assessee relying upon the decision of the Supreme Court in the case of Cambay Electric Supply Industrial Co. Ltd v. CIT [1978] 113 ITR 84 and in the case of Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120 (SC). No r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company, any expenditure which results directly or indirectly in the provision of any remuneration or benefit or amenity to a director or to a person, who has a substantial interest in the company or to a relative of the director or of such person, provided in the opinion of the Assessing Officer, any such expenditure is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by the company from such expenditure. Also there is a limit prescribed to such expenditure. 8 Reading the provision would indicate that apart from the taxation part, the provision seems to have another purpose and that is to discourage persons holding substantial interest in and consequently a control over a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reatment of the managing director. Thus, there appears no reason, why the said provision of section 40(c) (ii) should not apply to the present case. The opening words of section 40 made it clear that it has overriding the effect upon section 37. 12 From the side of the assessee reliance has been placed upon the decision of the Calcutta High Court in the case of CIT v . National and Grindlays Bank Ltd . [1993] 202 ITR 559. Reliance has also been placed from the side of the assessee upon the decision of the Supreme Court in the case of CIT v. Mafatlal Gangabhai and Co. P. Ltd. [1996] 219 ITR 644. Both these decisions deal with "perquisite" as contemplated by section 40A(5). Perquisite to an employee stands on a different footing as a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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