1984 (9) TMI 95

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....the company, the provisions of s. 40A(5) and not the provisions of s. 40(c) applied for considering the admissible limits of remuneration payable to him. The assessee, on an appeal filed before the CIT (A), relied on the Tribunal Special Bench decision in the case of Geoffrey Manners & Co. Ltd. vs. ITO (1983) 3 SOT 40 (Bom) (SB) in ITA No. 1296 (Bom)/1976-77 decided on 29th July, 1978 to the effect that in the case of an employee-director, the provisions of s. 40(c) and not the provisions s. 40A(5) applied. The CIT (A), however, relied on the Gujarat High Court decision in the case of CIT vs. Bharat Vijay Mills Ltd. (1981) 128 ITR 633 (Guj), the Karnataka High Court decision in the case International Instruments (P) Ltd. vs. CIT (1981) 130 ....

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....applied on the facts on the case. I have persuade the decision of the Gujarat High Court in the case of CIT vs. Bharat Vijay Mills (1981) 128 ITR 633 (Guj) relied upon by the CIT (A). I find that there is no dispute in this appeal for considering the question whether the provisions of s. 40(c) or s. 40A(5) of the IT Act applied to a person, who is a director or a person who is closely related to a director. The arguments and the decision proceeded on the basis that the decision proceeded on the basis that the provisions of s. 40A(5) applied to the facts of the case. Further, in the case of International Instruments (P) Ltd. vs. CIT decided by the Karnataka High Court (1981) 130 ITR 315 (Kar), it was the case of person who was an employee fo....