1980 (4) TMI 148

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....to the broker concerned brokerage which was of one month's rent. The amount so paid came to Rs. 3,600. The ITO and the AAC have held that the said expenditure was capital in nature. The ITO had also observed that since the flats were taken to provide accommodation to the Managing Director/Director the brokerage paid was "Perquisite" in the hands of the Directors and was disallowable under s. 40(c) of the Act. 3. We have heard both the representatives for the assessee Mr. Kothari and the departmental representative. The period of lease is 4 years only. As such, it cannot be said that the assessee has derived any enduring benefit from the leasing out of the said flats by it. As such, the brokerage paid by the assessee to the broker for arr....

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....al purposes by the directors could not be ruled out when they have no car of their own. As such, on the facts and in the circumstances of the case, the present case is a fit case for disallowance of a part of the motor-car expenses. The estimation of the disallowance by the AAC is fair and reasonable calling for no interference. 8. The assessee-company was incorporated on 26th March, 1975. The ITO has disallowed the salary paid by the assessee to the Managing Director prior to 26th July, 1975 which came to Rs. 6,319. The said disallowance has been upheld by the AAC. 9. We have heard both the sides. The salary paid by the assessee to the Managing Director prior to its incorporation are preliminary expenses and the same cannot be allowe....