TMI Blog1970 (5) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT The judgment of the court was delivered by SHAH J.- This appeal is filed with certificate under section 66A(2) of the Indian Income-tax Act, 1922. The assessee is a private limited company carrying on business in "mica mining". Under article 42 of its articles of association, remuneration payable to the managing director and the deputy managing director of the assessee was fixed at 30% of the annual net profits subject to the minimum of Rs. 5,000. In the year of account ending June 30, 1958, the assessee debited an amount of Rs. 66,106 paid to the managing director and the deputy managing director. For the assessment year 1959-60 the Income-tax Officer while computing the taxable income in exercise of his power under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court certified the case under section 66A(2) stating that " as regards the value and nature of the case, it fulfils the requirements under section 66A(2) of the Indian Income-tax Act, 1922, and is a fit case for appeal to the Supreme Court." In this appeal the Solicitor-General has contended that the certificate was defective in that it did not set out the substantial question of law which, in the view of the High Court, fell to be determined by this court. For reasons which we have stated in Civil Appeal No. 376 of 1967 (India Machinery Stores (P.) Ltd. v. Commissioner of Income-tax), we are of the view that the certificate is defective. Mr. Chagla appearing on behalf of the assessee has offered to file a petition for speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal that in the circumstances of the case the allowance was excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom, is erroneous. It appears that the Income-tax Officer had, for the assessment years 1957-58 and 1958-59, disallowed a part of the remuneration paid to the directors. The matter was carried to the Tribunal. For the assessment year 1957-58, the Tribunal allowed the claim in full: in respect of the year 1958-59, the Tribunal allowed an amount of Rs. 48,000 as against the claim for Rs. 74,190. The assessment orders for the years 1957-58 and 1958-59, are not before the court. In his order relating to the assessment year 1959-60, the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence that a particular allowance is justifiable. Apparently, no evidence was tendered by the assessee relating to the duties of the managing director and the deputy managing director, the services rendered by them, the manner in which the profits earned by the assessee were enhanced by reason of their special aptitude or qualifications, the legitimate business needs of the assessee and the benefit derived by or accruing to the assessee in consequence of the services rendered by the managing director and the deputy managing director. In the absence of any such evidence, the finding recorded by the Income-tax Officer and confirmed by the Appellate Assistant Commissioner and the Tribunal must be accepted. We are unable to agree with counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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