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TMI Blog2002 (4) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... (P) Ltd. The entire share capital was contributed by the assessee, his wife and two children. The total paid-up capital comprised of 900 shares of ₹ 10 each; out of which the assessee held 705 shares. The objects of the company as stated in the memorandum and articles of association were mainly in connection with the film business. The assessee had also entered into an agreement with the said company whereby all the programmes to be held by him would be arranged by the company. As per the terms of the agreement, the company would have exclusive right to negotiate on behalf of the assessee in connection with the film shows and sound recordings. The assessee would be entitled to professional fees on the basis of programme receipts received by the company. He was also entitled to get salary of ₹ 6,000 per month, free telephone and reimbursement of medical expenses and 50 per cent of the maintenance of the residential house of the assessee. 3. It was explained to the AO that the said company was found for commercial reasons with a view to have continuity, larger funds, better administration, etc. and not with any other intention of reducing any tax liability. The AO was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arvind Narottam (1988) 72 CTR (SC) 94: (1988) 173 ITR 479(SC); (ii) Valliappan vs. ITO (1988) 67 CTR (Mad) 289: (1988) 170 ITR 238(Mad); (iii) CIT vs. Smt. Saira Banu (1993) 111 CTR (Bom) 234: (1993) 203 ITR 145(Bom; (iv) Navketan International Film (P) Ltd. vs. CIT (1994) 119 CTR (Bom) 468: (1994) 209 ITR 976(Bom); and (v) Vishal International Productions (I) Ltd. vs. ITO (1982) 9 Taxman 10(Bom). 7. We have considered the rival submissions and perused the facts on record. A company, under the general law, is a juristic person and it is separate and distinct from its shareholders (Saloman vs. Saloman Co. (1897) AC 22 (HL), Mrs. Bacha F. Guzdar vs. CIT (1955) 27 ITR 1(SC), CIT vs. B.M. Kharwar, (1969) 72 ITR 603(SC), Calcutta Tramways Co. Ltd. vs. CWT 1972 CTR (SC) 405: (1972) 86 ITR 133(SC), CIT vs. Associated Industrial Development Co. (P) Ltd. (1969) 73 ITD 50(Cal). The assessee and Nitin Mukesh Films (P) Ltd. are therefore, two different entities. The company was found with an intention to carry out commercial activities of production of films, serials, etc., apart from having exclusive rights to conduct programmes of the assessee. The contention of the AO that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a remuneration of ₹ 80,000 per annum to the assessee. The company had entered into agreements with the film producers directly and received all payments. In the previous year relevant to the asst. yrs. 1972-73 and 1973-74, the assessee had acted in 2 films and 5 movies for which the company got ₹ 45,000 and ₹ 3,35,011 respectively. For the years 1972-73 and 1973-74, the assessee claimed ₹ 1,65,712 and ₹ 2,30,096 respectively in her returns for income for the above years which included ₹ 80,000 received by the assessee from the company. The ITO took the view that the assessee had entered the agreement with the company with a view to avoid tax; that the company was controlled by the assessee's brother and mother, who was also a leading star. On appeal, the Hon'ble High Court held that out of the income earned by the company from various films in which the assessee acted, the assessee was entitled to only ₹ 80,000 from the said company and not the entire income which the producers paid to the said company. Nowhere in the order of the ITO it was shown that there was an attempt on behalf of the assessee to evade tax. 9. In the ligh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en brought on record to show that the assessee had contributed to the marriage expenses over and above what he had declared. In the case of Yadu Hari Dalmia vs. CIT (1980) 17 CTR (Del) 234: (1980) 126 ITR 48(Del), the Hon'ble Delhi High Court while adjudicating upon the marriage expenses has held an estimate without details will not be upheld in all circumstances and the Department should give some definite basis for arriving at some expenditure where it can . We find that no material has been placed on record by the AO to warrant the impugned addition and the addition based on pure presumption has rightly been deleted by the CIT(A). We, accordingly, decline to interfere. This ground too falls and is dismissed. 15. Ground Note reads as under : 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) earred in deleting the disallowance of ₹ 36,000 being salary paid to assessee's wife. 16. During the year under appeal, the assessee paid a sum of ₹ 36,000 as salary to his wife Mrs. Nisha N. Mathur. It was explained to the AO that Mrs. Mathur was acting as secretary to the assessee and similar salary had been paid in the past a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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