Director remuneration not excessive where directors served partnership interests and payments were justified on the facts.

Remuneration and director's fee paid to directors were not treated as excessive where the company, though not carrying on active business, had income from partnership interests and the directors were attending to its interests in those firms. On those facts, the tribunal found that the total payments were justified and the disallowance was not warranted. The deletion of the addition was upheld in favour of the assessee.

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Issues: Whether the disallowance of remuneration and director's fee paid to the directors as excessive was justified.

Analysis: The company had three directors who received salary and director's fee during the relevant year. Although the company itself had no business operations, it was a partner in two registered firms and derived income therefrom. The directors were found to be attending to the company's interests in those firms, and the total payment was not considered excessive on the facts.

Conclusion: The disallowance was not warranted and the deletion of the addition was upheld in favour of the assessee.

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