https://www.taxtmi.com/caselaws?id=8759 Bonus paid to a managing director may be disallowed where the payment is found excessive or unreasonable in light of the company's legitimate business needs and the benefit derived by it. The payment is not tested only as ordinary business expenditure or by comparison with bonus to other employees; it must also satisfy the special restriction governing remuneration, benefit or amenity to a director or person with substantial interest. Applying that standard, the authorities found that the company had already paid enhanced salary and commission, and that the additional bonus was not justified as an incentive or wage adjustment. The disallowance was therefore upheld against the assessee. en-us Tue, 13 Jun 1972 00:00:00 +0530 Wed, 03 Jun 2009 16:55:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=8759 Bonus paid to a managing director may be disallowed where the payment is found excessive or unreasonable in light of the company's legitimate business needs and the benefit derived by it. The payment is not tested only as ordinary business expenditure or by comparison with bonus to other employees; it must also satisfy the special restriction governing remuneration, benefit or amenity to a director or person with substantial interest. Applying that standard, the authorities found that the company had already paid enhanced salary and commission, and that the additional bonus was not justified as an incentive or wage adjustment. The disallowance was therefore upheld against the assessee. Case-Laws Income Tax Tue, 13 Jun 1972 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=8759