2002 (11) TMI 37

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....e following question has been referred to this court under the provisions of section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as the "Act"): "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the provisions of section 40(b) of the Act were applicable in relation to (a) salary amount to Rs. 42,000 paid to Shri N.R. Sh....

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.... said expenditure under the provisions of section 40(b) of the Act. Being aggrieved by the disallowance, an appeal was filed before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) was pleased to dismiss the appeal and confirm the order passed by the Income-tax Officer. Thereupon, the assessee filed an appeal before the Tribunal but the Tribunal also upheld ....

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....e provisions of section 40(b) of the Act. Our attention has been drawn by the learned advocates to the judgment delivered by this court in the case of National Wire Mfg. Co. v. CIT [2002] 253 ITR 496. In the said case, this court has opined that in the circumstances which have been referred to hereinabove, the salary or consultation fees paid to the partner has to be disallowed under the provision....