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TMI Blog1961 (4) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner : G. Rama Iyer JUDGMENT M. A. Ansari, CJ. This reference comes to us under section 66(1) of the Indian Income-tax Act, with the following question: "Whether there are materials for the Tribunal to hold that the whole of the claim of salary paid to Lakshmana Reddiar does not represent expenditure laid out or expended wholly or exclusively for the purpose of business?" The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e what would be reasonable salary. The Appellate Tribunal has reversed the decision, and the ground for doing so can shortly be given in the words of the Tribunal itself; "In the past the Tribunal has held that only a part thereof can be said to have been wholly and exclusively laid out for purpose of business. In this year, 1/3rd of the profits will amount to ₹ 22,000. This must deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at if the remuneration be paid out of purely commercial considerations, it should be allowed as expenditure incurred wholly or exclusively for the purpose of the business and it would not be open to the taxing authority to adopt a subjective standard of reasonableness and disallow a part of the remuneration as being unreasonably large. Acting on the aforesaid principle, the Appellate Assistant Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qually effective ground given as his legal salary. The grounds on which the salary paid according to the terms of employment had not been allowed in the assessment year are merely that in the earlier years, less has been llowed, but the employees had then been getting remuneration on a different basis and this difference had not been noticed in reducing the claim. The learned Government Pleader h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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