Home Case Index All Cases Companies Law Companies Law + SC Companies Law - 1979 (9) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1979 (9) TMI 133 - SC - Companies LawWhether on proper construction of the agreement dated November 10, 1955, entered into by the assessee with Kamala Mills Ltd., the latter was the "manager" of the assessee within the meaning of section 384 read with section 2(24) of the Companies Act, 1956, and if so whether the remuneration paid by the assessee to the latter in the two calendar years 1957 and 1958 relevant to the assessment years 1958-59 and 1959-60 cannot be allowed as business expenditure under section 10(2)(xv) of the Indian I.T. Act, 1922 ? Held that:- Appeal dismissed. The High Court was right in answering the question in favour of the assessee. The aspects whether the assessee had disputed its liability to pay such remuneration to Kamala Mills Ltd. or had filed a suit at the instance of the Company Law Board to recover it back from Kamala Mills Ltd. or had obtained a decree in that behalf against Kamala Mills Ltd. become irrelevant. However, we would like to place on record the fact that the decree obtained by the assessee against Kamala Mills Ltd, has been reversed or set aside in appeal by the Kerala High Court—a fact which was brought to our notice by the Advocate-on-Record for the assessee communicated to him by his client in a letter dated 22nd August, 1979. However, even if in further appeal the trial court's decree was restored and the assessee were to recover back the remuneration, the assessee can be taxed on the two amounts under section 41(1) of the 1961 Act.
|