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2021 (8) TMI 1101 - AT - Income TaxDisallowance u/s 40A (2)(b) - higher salary to the Directors or the Managers or other Officers or employees - HELD THAT:- The assessee company has paid the Directors remuneration during the previous year as well as the subsequent years, the Assessing Officer has observed that they are the Managers to Directors and control the company. AO has not disputed that the Board meeting has approved the increase of remuneration payable to the Directors in accordance with the provisions of the Companies Act, 1956 during the previous year 2011-12 & 2012-13. When a Company pays higher salary to the Directors of the Managers or other Officers or employees it is for the commercial expediency of internal affairs of the company, it is not for the Revenue Authorities to decide that particular salary should not have been paid to the Directors. It is the business decision and, therefore, the disallowance u/s 40A(2)(d) is wrongly invoked - Decided in favour of assessee.
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