https://www.taxtmi.com/caselaws?id=204670 HC held that disallowance under Section 40A(2) on account of alleged excessive remuneration to the majority shareholder-director (Director A) was unjustified. Considering the assessee's business in advertising and media, the Court found that media consultancy is central and more critical than client management, thereby justifying higher remuneration to Director A vis-à-vis other directors. Applying the test of "legitimate needs of the business" and "benefit derived," and noting the CBDT clarification that Section 40A(2) targets tax evasion, not bona fide payments, HC ruled that the remuneration was neither excessive nor unreasonable. The disallowance was deleted and the appeal of the assessee allowed. en-us Fri, 08 Jul 2011 00:00:00 +0530 Tue, 09 Jun 2026 11:34:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=204670 HC held that disallowance under Section 40A(2) on account of alleged excessive remuneration to the majority shareholder-director (Director A) was unjustified. Considering the assessee's business in advertising and media, the Court found that media consultancy is central and more critical than client management, thereby justifying higher remuneration to Director A vis-à-vis other directors. Applying the test of "legitimate needs of the business" and "benefit derived," and noting the CBDT clarification that Section 40A(2) targets tax evasion, not bona fide payments, HC ruled that the remuneration was neither excessive nor unreasonable. The disallowance was deleted and the appeal of the assessee allowed. Case-Laws Income Tax Fri, 08 Jul 2011 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=204670