https://www.taxtmi.com/caselaws?id=7175 Excess remuneration paid to a managing director was examined as a business deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922. The governing test was commercial expediency: expenditure need not yield a direct benefit if it is voluntarily incurred for the ultimate benefit of the business. On the facts, the managing director's services increased the managed company's profits and, in turn, the assessee's managing agency commission; the arrangement was bona fide and connected with business advantage. The payment was therefore treated as laid out wholly and exclusively for the purposes of the assessee's business, and the disallowance could not be sustained. en-us Mon, 14 Aug 1967 00:00:00 +0530 Thu, 12 Feb 2009 11:56:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=7175 Excess remuneration paid to a managing director was examined as a business deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922. The governing test was commercial expediency: expenditure need not yield a direct benefit if it is voluntarily incurred for the ultimate benefit of the business. On the facts, the managing director's services increased the managed company's profits and, in turn, the assessee's managing agency commission; the arrangement was bona fide and connected with business advantage. The payment was therefore treated as laid out wholly and exclusively for the purposes of the assessee's business, and the disallowance could not be sustained. Case-Laws Income Tax Mon, 14 Aug 1967 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=7175