TaxTMI 
TaxTMI 
1989 (3) TMI 92
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....KAL CHAND MITAL J. -A director of a company was also its employee. The total perks debited were valued at Rs. 9,600 during the accounting year relevant to the assessment year and salary of Rs. 18,000. The Income-tax Officer applied the provisions of section 40A(5)(c) of the Income-tax Act, 1961 (for short "the Act"), and came to the conclusion that the allowance on account of perquisites was to b....
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....ector of the company ?" On behalf of the Revenue, reliance is placed on Travancore Rayons Ltd. v. CIT [1986] 162 ITR 732, a decision of the Kerala High Court for the proposition that if a director is also an employee of the company, then section 40A(5) of the Act is applicable and section 40(c) of the Act would not apply. The Tribunal relied upon a decision of the Gujarat High Court in Addl. CIT ....
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....r relatives were the partners. It was not a case where the director of the company was an employee. To such facts, as were before this court in Avon Cycles (P.) Ltd.'s case [1980] 126 ITR 448, section 40A(5) of the Act could not even remotely apply. The Tribunal fell into an error in referring to the decision while deciding the matter. On a reading of the judgments of the Kerala High Court in Tra....
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.... which results directly or indirectly in the payment of any salary to an employee, and the proviso further provides that where the assessee is company, so much of the aggregate of the expenditure referred to in sub-classes (i) and (ii) thereof 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 ....