9911796707
TMI Blog1999 (7) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Appellate Tribunal has referred the following question of law to this court for opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the commission of Rs. 1,24,969 paid by the assessee to Parekh and Co., would fall to be considered under section 40A(5), or section 40(c), as the case may be ?" The controversy in this case pert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,24,969 to Parekh and Co. The Income-tax Officer applied section 40A(5) of the Income-tax Act for finding out the allowable salary. Following the earlier orders of the Income-tax Appellate Tribunal in the case of the assessee for the years 1975-76 to 1977-78, in appeal the Commissioner of Income-tax (Appeals) held that the amount paid to Parekh and Co., is not covered by section 40A(5) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the matter to the authorities below for being processed under section 40(c) of the Income-tax Act. The Income-tax Appellate Tribunal held that there is prima facie evidence to show that the commission paid is not excessive or unreasonable having regard to the business of the assessee. In this view of the matter, the Income-tax Appellate Tribunal dismissed the appeal filed by the Department and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors of the assessee-company in favour of the assessee. So long as the agreement whereunder the said payments were made is not held to be a mere device or a mere screen, the said payments cannot be treated as payments made to the directors as directors (qua directors). The payments were made by way of consideration for allowing the assessee to use a valuable right belonging to them, viz., the br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or the reasonableness thereof having regard to the legitimate business needs of the assessee. Since the dispute in regard to the scope and ambit of section 40(c) of the Income-tax Act is put to rest by the above decision of the Supreme Court which is followed by this court in Pai Paper and Allied Industries P. Ltd. v. CIT [1994] 207 ITR 410, we answer the question referred to us in the aforestat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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