2001 (8) TMI 40

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.... Income-tax Act, 1961 (in short "the Act"), the Income-tax Appellate Tribunal, Delhi Bench (in short "the Tribunal"), has referred the following question for the assessment years 1978-79 and 1979-80 for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Income-tax Officer in the assessment of the assessee was justified in making the addition of Rs.30,063....

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....ore the Commissioner of Income-tax (Appeals) (in short "the CIT (A)"), who held that section 40A(5)(c) had no application regarding remuneration of the three directors. The matter was carried in appeals before the Tribunal by the Revenue. Following its view in some other case the Tribunal was of the view that salary, bonus, commission and house rent allowance have to be restricted to the extent it....

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....tes to directors. The proviso to section 40A(5)(a)(i) applicable to employee directors at the relevant time read as under: Section 40A(5) prior to its omission by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), with effect from 1st April, 1989, stood as under: "40A. (5)(a) Where the assessee- (i) incurs any expenditure which results directly or indirectly in the payment of any sala....

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....nd allowance referred to in sub-clauses (i) and (ii) of clause (c) of section 40, in respect of an employee or a former employee, being a director or a person who has a substantial interest in the company or a relative of the director or of such person, as is in excess of the sum of seventy two thousand rupees shall in no case be allowed as a deduction: Provided further that in computing the....