1988 (8) TMI 54

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....der the Income-tax Act, 1961. The assessee in this case is India Carbon Ltd., Noonmati, Gauhati. The following two questions are referred to this court under sub-section (1) of section 256 of the Act : "(1) Whether, on the facts and in the circumstances of the case, and on a proper construction of section 40(c) of the Income-tax Act, 1961, as amended by section 9 of the Finance (No. 2) Act, 197....

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....r held that the amount was excessive and allowed Rs. 54,000. The balance of Rs. 1,53,783 was disallowed. For the assessment year 1972-73, the Income-tax Officer allowed Rs. 54,000 and disallowed Rs. 1,66,330. For the year 1973-74, he allowed Rs. 54,000 and disallowed Rs. 1,90,081. On appeal, the order of the Income-tax Officer was confirmed (sic). The Appellate Tribunal confirmed the order in appe....

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....be rectified" and "Under the circumstances, we are of the opinion that the Appellate Assistant Commissioner was justified in holding that the managing director's remuneration was reasonable and not excessive. He was, therefore, right in allowing the managing director's remuneration in full for the assessment year 1970-71 as claimed by the assessee. However, in view of the amendment to section 40(c....

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....eeks to interpret it. It is argued that section 40(c) would apply only if the Revenue authorities hold that what was paid by the assessee towards the remuneration of the managing director is excessive and unreasonable. If such a finding is not recorded, then the application of section 40(c) is not called for. The argument is that such a finding is a jurisdictional question. Therefore, the Appellat....