1975 (8) TMI 55

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....e managing director is one Mr. Korah. For the two assessment years he had been paid a remuneration of Rs. 60,000. The ITO though that the remuneration was excessive and he disallowed Rs. 18,000 under s. 40(c) for the asst. yr. 1973-74 and Rs. 15,000 for the asst. yr. 1974-75. On appeal the addition was confirmed for the first year but reduced to Rs. 9,000 in the next year. 2. The assessee is on....

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....the ITO has power to consider whether the expenditure incurred by the company is reasonable considering the market value of the services rendered by the managing director. We find that the assessee company is a closely held company. The shareholders are members of one family along with the managing director and his wife. The managing director and his wife own 74 shares out of 150 shares. He is in ....

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....ef-Executives of such ship-brokers would undoubtedly be a guide line. The ITO ought to have furnished some such guide lines and then only he could have come to the conclusion that the remuneration paid is excessive. In the absence of any comparative case being given it is impossible for us to judge whether the payment is excessive. Since the assessee has discharged his onus by giving the qualifica....

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....e years is disallowance of certain expenses treated as entertainment expenses. It appears that the assessee had to incur some expenditure when a representative of the shipping line whose business they are handling visited them. The expenditure was mainly stay in hotels, cost of momentees etc. These were disallowed as entertainment expenditure. The disallowance was upheld by the AAC. The counsel fo....