TMI Blog1991 (8) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred to as "the said Act"), allied with reference of the remuneration as well as fees of the directors' and committee meetings paid by the company to the directors. He, therefore, disallowed a sum of Rs. 31,500 in all for the assessment year 1972-73 and a sum of Rs. 28,000 for the assessment year 1973-74. In the appeals filed before the Appellate Assistant Commissioner, he took the view that the directors fees and committee meeting fees were not covered by the expression "remuneration or a benefit or an amenity" within the meaning of section 40(c)(i)(A) of the said Act. He, therefore, restricted the disallowance to Rs. 16,000 for the assessment year 1972-73 and to Rs. 16,000 for the assessment year 1973-74 being the excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any company (i) 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, as the case may be, . . . . . if, in the opinion of the Income-tax Officer, any such expenditure or allowance as is mentioned in sub-clauses (i) and (ii) is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom, so, however, that the deduction in respect of the aggregate of such expenditure and allowance in respect of any one person referred to in sub-clause (i) shall, in no case, exceed (A) where suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parate field. Even though the remuneration payable by way of fee to the directors for attending meetings may not be included while calculating the overall maximum managerial remuneration payable to the directors under section 309 of the Companies Act, it cannot be said that such remuneration would not be taxable under the said Act. To remunerate would mean to make some return for services, etc., or to reward a person or to pay for services rendered or work done. (See the Oxford English Dictionary, Volume VIII). In this context, we may refer to the observations of justice Blackburn in the Queen v. Postmaster General [1876] 1 QBD 658, at 663, while considering the meaning of the word "remuneration", 'but I think the word 'remuneration' is a w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learly remuneration paid to the directors and, therefore, it is not necessary for us to express any opinion on the decision in Avon Cycles' case [1980] 126 ITR 448 (P H), in so far as it holds that payment by the company to a firm in which directors are partners does not fall within the ambit of the provisions of section 40(c) of the said Act. In CIT v. Chotanagpur Engineering Works Ltd. [1987] 163 ITR 705 (Patna), on which reliance was placed on behalf of the assessee, the issue involved was entirely different and it was in the context of deposits which were made in the names of relations of directors and for which interest was disallowed by the Income-tax Officer under section 40(c) that the Tribunal held that the case did not fall unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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