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2013 (3) TMI 10 - HC - Income TaxPayment of specified persons u/s 40A(2) - excessive commission -held that:- From the findings recorded by the Tribunal it is absolutely clear that Sri Habib Akhtar was aged about 21 years during the previous year relevant to the assessment year in question and was still studying. The Court came to the conclusion that when a company pay a higher salary to the directors or the managers or to her officers or employees as a matter of commercial expediency, it is not for the Income-tax Officer to say that in his opinion the said salary should not have been paid. A company may decide to pay a higher remuneration to its directors, officers or employees so as to encourage them to work hard, expand the business, or for a host of other commercial considerations and the matter has to be looked at from the view point of the company. Applying the principles laid down in the case of Abbas Wazir(P) Ltd. vs. Commissioner of Income-tax, [2003 (9) TMI 50 - ALLAHABAD HIGH COURT] to the facts of the present case we find that in the case in hand the assessing authority has considered all the relevant factors viz. The agreement, the work done in the new factory as also the quantum of amount paid with relation to the production done in the old as well as the new factory and had acted from the view point of a prudent businessman while introducing the provision of Section 40A(2) of the Act and disallowing a part of the commission on the ground of being excessive in nature. - Decided in favor of revenue.
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