TaxTMI 
TaxTMI 
1977 (11) TMI 41
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....come-tax Officer in making the assessment-disallowed a sum of Rs. 1,75,000 out of the sum of Rs. 3,91,150 claimed by the assessee as having been paid as directors' remuneration. The Income-tax Officer held that such payment to the extent of the said sum of Rs. 1,75,000 Was excessive and unreasonable. Further, the assessee had paid a sum of Rs. 6,826 as contribution to a provident fund in East Pakistan where the assessee carried on business during the said assessment year. This provident fund was recognised by the Pakistan authorities but not by the Indian revenue authorities. The assessee claimed a deduction for the said sum of Rs. 6,826 which was disallowed by the Income-tax Officer. On appeal the Appellate Assistant Commissioner hel....
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....is context, the question would be whether an alleged payment to a provident fund is merely an a appropriation in the accounts, the assessee retaining full control over the amount, or whether the payment is to an outside body and is beyond the assessee's control. As the Appellate Assistant Commissioner has correctly observed, the payment would have to be deducted in computing the Pakistan income, if the provident fund has been set up under an irrevocable trust." From the aforesaid order of the Tribunal, the follow ing questions have been referred : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in allowing the entire remuneration to the directors as admissible deduction for the purpose of ....
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.... in assessing such income. In support of his proposition he cited a decision of the Supreme Court in the case of Commissioner of Income-tax v. C. Parakh & Co. (India) Ltd. [1956] 29 ITR 661. It was held by the Supreme Court in that case, that where an assessee carried on the same business at a number of places for the purpose of section 10 of the Indian Income-tax Act, 1922, they should be deemed to be only one business and the net profits thereof had to be ascertained by pooling together the profits earned in all the branches and deducting all the expenses, and the fact that some of the branches were in foreign territory would make no difference to the position, if the assessee was resident and ordinarily resident within India. Mr. Pal als....
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.... up under the Employees' Provident Funds Act, 1952, and claimed deduction of the amount of the transfer in computing its profits. It was that the amount in question had been spent and paid out in the relevant accounting period, and was deductible as expenditure incurred exclusively for purpose of the business of the respondent under section 10(3)(xv)) of the Indian Income-tax Act, 1922. To appreciate the controversy in this case, it is necessary to consider the relevant sections in the Act. Section 2(38) of the Income-tax Act, 1961, defines a recognised provident fund, inter alia, as follows : " ' Recognised provident fund ' means a provident fund which has been and continues to be recognised by the Commissioner in accordance with the....