Director remuneration disallowance under Section 40(C) was rejected after the court followed its earlier ruling.

Disallowance of director remuneration under Section 40(C) of the Income-tax Act was examined for Assessment Year 1982-83, where payments exceeded the prescribed limit. The issue was treated as covered by an earlier decision involving the same legal question for another assessment year, and the court followed that view. The result was that the disallowance was not sustained, and the matter was decided in favour of the assessee and against the Revenue.

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Issues: Whether the disallowance under Section 40(C) of the Income-tax Act, 1961, in respect of payments made to directors in excess of the prescribed limit was justified.

Analysis: The reference related to Assessment Year 1982-1983. The question on director payments under Section 40(C) was stated to be covered by an earlier decision involving the same legal issue for another assessment year.

Conclusion: The issue was answered in favour of the assessee and against the Revenue.

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