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2008 (4) TMI 280

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....reat. 2. On the facts and in the circumstances of the case, whether the learned Income-tax Appellate Tribunal was correct in law in holding that only 50 per cent. of depreciation is admissible in respect of the assets installed in the premises of JKCM and that no depreciation is admissible at all in respect of the assets installed in the premises of PPL, the amounts of disallowance confirmed being Rs. 30,234 and Rs. 11,943 respectively in each case. 3. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the limit of Rs. 5,000 prescribed in the proviso to section 80VV is an overall limit and not relating to and in each proceeding that view in confirming a part of the disallowance of legal ....

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....tor or to a person who has a substantial interest in the company or to a relative of the director or of such person, as the case may be. (ii) Any expenditure or allowance in respect of any assets of the company used by any person referred to in sub-clause (i) either wholly or partly for his own purposes or benefit, if in the opinion of the Income-tax Officer any such expenditure or allowance as is mentioned in sub-clauses (i) and (ii) is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom, so, however, that the deduction in respect of the aggregate of such expenditure and allowance in respect of any one person referred to in sub-clause (i) shall, in....

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..... 15 lakhs and according to the Assessing Officer, wherever payment was made over and above the ceiling amount of Rs. 72,000 it was required to be disallowed. Therefore, the disallowance was to the extent of Rs. 8,18,000. 8. What is required to be considered is whether the disallowance of Rs. 8,18,000 was permissible in view of section 40(c) of the Act or not. 9. Learned counsel for the assessee has brought to our notice that commission was paid to the directors in terms of the special resolution passed by the assessee on August 30, 1974. This special resolution reads as follows:  "As special resolutions : (1) Resolved that subject to the approval, if required, of the Central Government and pursuant to the provisions of section 30....

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.... consideration have not been spelt out but we have to proceed on the basis of the decision of the board as it is presuming that the commission payable to the directors is determined on the basis of services rendered by them or some similar requirement. 11. It is under these circumstances that different amounts were paid to different directors and no fixed amount was paid or determined. 12. According to learned counsel for the Revenue, the commission is actually remuneration within the meaning of section 40(c) of the Act. There is no definition of remuneration that has been pointed out by learned counsel either from any statute or from any case law. But from the cases cited by her, it does appear that "remuneration" must have at least one ....