9911796707
TMI Blog1985 (12) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... see-company. It was resolved that the three directors of Larsen Toubro Ltd., viz., Mr. H. Holck-Larsen, Mr. N.M. Desai and Mr. Gunnar Hansen would serve as members of the committee as directors of the assessee-company and that the remuneration payable to them (exclusive of sitting fees as members of the committee) would be held by them in trust for the company (L T) and shall be made over by them to the said company. Those three directors acted as trustees of Larsen Toubro Ltd., and received Rs. 1,20,761 as commission from the assessee-company in the capacity of such trustees. In fact cheque for that amount had been given direct to Larsen Toubro Ltd. by the assessee-company. The stand of the assessee throughout this proceeding is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee before us is that the words 'person who has substantial interest in the company' in section 40(c)(i) refers to a living person and not to an incorporated company. This, according to the assessee, is because of the fact that in the last part of sub-clause (i) of section 40(c), there is reference to 'relative of such person'. According to the assessee, only a living person could have a relative ; a company could not have a relative. Accordingly, the assessee-company was excluded from the category of 'person who has substantial interest in the company' in section 40(c)(i). According to the assessee no disallowance could be made under the said provision. The learned departmental representative has relied on definition given in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstantial interest in the company and not for restricting the expression 'person having substantial interest in the company' to living individuals only by excluding company, firm, HUF, AOP, local body, etc. Larsen Toubro Ltd. is holding company in relation to the assessee-company and, as such, it comes in the category of 'person who has substantial interest in the company' (assessee-company) with the result that provisions of section 40(c)(i) would be applicable. We, therefore, reject the submission of the assessee on this point. 6. Before parting with this matter, we may point out that the learned representative of the assessee had referred to the order of the Bench 'D' of the Tribunal at Bombay dated 24-9-1980 in IT Appeal No. 1143 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
