1992 (12) TMI 10

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....WAL J.-In pursuance of the directions made by this court under section 256(2) of the Income-tax Act, 1961, the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following question for the opinion of this court : "Whether, on the facts and in the circumstances of the case, any part of the sum of Rs. 12,000 paid as remuneration to Shri Ram Awadh Dubey, managing director ....

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....laim of the assessee amounting to Rs. 12,000 ; on appeal, the learned Appellate Assistant Commissioner observed that, in the immediately preceding year, a salary of Rs. 6,000 was allowed and keeping in view the increase in the cost of living, he directed the allowance of the managing director's salary at Rs. 600 per month. He recorded a positive finding that the salary claimed at Rs. 1,000 per mon....

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....s also nothing to suggest that the managing director deserved raising of his salary from Rs. 500 per month to 1,000 per month. There is no evidence to show that this increase was justified by the services rendered by him. " "Keeping all the facts of the case in view, we feel that the decision of the Appellate Assistant Commissioner holding that the remuneration of Rs. 600 per month would be fai....

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....rded a finding that the salary paid to the managing director was excessive or unreasonable having regard to the legitimate business needs of the company as is the requirement of section 40(c). It is true that the words "legitimate business needs of the company" have not been used in any of the orders, but the mere omission to use the language of the statute will not be of any consequence. The Asse....