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TMI Blog1996 (11) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment, the Tribunal referred the following question for the opinion of this court under section 256(1) of the Income-tax Act, 1961, hereinafter referred to as the "Act", for the assessment years 1975-76 and 1976-77 : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the disallowance towards the remuneration paid to Sri R. K. Swamy, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mills Ltd. [1978] 113 ITR 745. Hence, the Commissioner of Income-tax (Appeals) remitted the matter back to the Income-tax Officer for recalculating the disallowance under section 40(c) of the Act. On the Revenue's appeal, the Tribunal upheld the Commissioner's direction on this point, following the decision in Addl. CIT v. Tarun Commercial Mills Ltd. [1978] 113 ITR 745 (Guj) as also the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case and find out the reasonableness in allowing the expenditure incurred by the employer towards its managing director. We have heard learned senior standing counsel appearing for the Department and also learned counsel appearing for the assessee, who supported the order passed by the Tribunal. The fact remains that though the Tribunal in its order, gave certain findings with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision in clause (c) of section 40 applies to directors among others. Of course, section 40(c) is applicable only to companies, whereas section 40A(5) is applicable to employees whether of companies or others. In the case of directors, who are also employees, both the provisions will be attracted---the higher of the two ceilings has to be applied". In view of the abovesaid decision of the Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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