1984 (3) TMI 152

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....isallowed balance of Rs. 14,722. 6. The Commissioner (Appeals) following the Bombay Special Bench decision in ITO v. Sapt Textiles Products India Ltd. [1982] 1 SOT 269 as also Addl. CIT v. Tarun Commercial Mills Ltd. [1978] 113 ITR 745 (Guj.) and CIT v. Patiala Flour Mills Co. (P.) Ltd. [1980] 123 ITR 7 (Punj. & Har.) held that section 40(c) of the Income-tax Act, 1961 (' the Act ') was applicable in the case of directors and, therefore, only the overall limits of Rs. 72,000 applied and not the separate limit for salary and perquisites under section 40A(5) of the Act. 7. The learned departmental representative urged before us that the separate limits for salary and perquisites were applicable relying on CIT v. Forbes, Ewart & Figgis (....

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....yee and whether the salary paid to him was subject to limits imposed under section 40A(5). 9. International Instruments (P.) Ltd. v. CIT [1981] 130 ITR 315 (Kar.) held that ceiling of Rs. 72,000 applied to director under section 40A(5) as the managing director, was paid a salary of Rs. 72,000 plus perquisites. No question arose regarding the individual ceiling of salary and perquisites. The said decision was followed in International Instruments (P.) Ltd.'s case. The Gujarat High Court in CIT v. Bharat Vijay Mills Ltd. [1981] 128 ITR 633 held that section 40A had an overriding effect in the computation of income under the head ' Profits and gains of business or profession ' and that the function of the first proviso to section 40A(5)(a) ....