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TMI Blog1984 (9) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... d for considering the admissible limits of remuneration payable to him. The assessee, on an appeal filed before the CIT (A), relied on the Tribunal Special Bench decision in the case of Geoffrey Manners Co. Ltd. vs. ITO (1983) 3 SOT 40 (Bom) (SB) in ITA No. 1296 (Bom)/1976-77 decided on 29th July, 1978 to the effect that in the case of an employee-director, the provisions of s. 40(c) and not the provisions s. 40A(5) applied. The CIT (A), however, relied on the Gujarat High Court decision in the case of CIT vs. Bharat Vijay Mills Ltd. (1981) 128 ITR 633 (Guj), the Karnataka High Court decision in the case International Instruments (P) Ltd. vs. CIT (1981) 130 ITR 315 (Kar) and the order of the Supreme Court refusing to grant Special Leave t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of CIT vs. Bharat Vijay Mills (1981) 128 ITR 633 (Guj) relied upon by the CIT (A). I find that there is no dispute in this appeal for considering the question whether the provisions of s. 40(c) or s. 40A(5) of the IT Act applied to a person, who is a director or a person who is closely related to a director. The arguments and the decision proceeded on the basis that the decision proceeded on the basis that the provisions of s. 40A(5) applied to the facts of the case. Further, in the case of International Instruments (P) Ltd. vs. CIT decided by the Karnataka High Court (1981) 130 ITR 315 (Kar), it was the case of person who was an employee for the part of the year and was a director-cum-employee for the remaining part of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question which of the two provisions applied to the facts of the present case. As held by the Members of the Special Bench, I shall hold that the provisions of s. 40A(c) and not s. 40A(5) applied to the facts of the case. Since under s. 40(c) applied to the facts of the case. Since under s. 40(c) of the IT Act, the limit applicable is Rs. 72,000 for the whole year, in my opinion the CIT (A) was justified in applying this limit of Rs. 72,000 to the facts of the present case. The appeal filed by the Revenue deserves to be and is accordingly dismissed. 5. The assessee has filed the cross objection on the ground that the CIT (A) erred in applying the provisions of s. 40A(5) in respect of remuneration paid to Shri S. K. Bhattacharyya. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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