1978 (9) TMI 109

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....ssee is a private limited company. In making the assessment, the ITO made three additions. To quote from the order of assessment, the additions were:- "(i) Salary and allowance to Directors- Rs. 35,116. In view of the paucity of profits the claim is restricted to 50 per cent(50 per cent of Rs. 35,116) Rs. 17,558 (ii) Commission payment to agent in respect of new series of chit introduced ....

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....there was no warrant for paying such high remuneration or commission. Regarding the disallowance of expenditure on coffee and tea, he relied on the decision in the case of CIT, Kerala vs. Veeriah Reddiar.(1) 5. The learned counsel for the assessee, on the other hand, submitted that out of total salary and allowance of Rs. 35,116, an amount of Rs. 12,716 represented travelling expenditure of the....

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....ed the facts and it is clear that out of Rs. 35,116, Rs. 12,716 represented travelling expenses and there is no material to suggest that there was any inflation in such claim. The same has to be allowed in full. Regarding the balance of salary and sitting fees, the salary of the two Directors was Rs. 500 per month in the earlier accounting period and it was raised by resolution dt. 2nd Jan., 1976 ....

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....essee would have received its share of commission only on first auction, the payments to agents should be disallowed, as not relating to the accounting period. We are unable to subscribe to this view. The agents have already canvassed for the business. There are a large number of agents involved. There is no dispute regarding the factum of payment. Business having been already canvassed for, servi....