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2020 (12) TMI 1186 - AT - Income TaxIncome from salary - addition being the amount of salary refunded to the employer company - Double addition - appellant was working as Whole Time Director (WTD) with Sun Pharma Advanced Research Company Ltd. (SPARCL) and his remuneration was fixed at maximum salary of Rs. 3, 50, 00, 000/- in AGM - HELD THAT - Since there was limit for payment of remuneration to the whole time director as per the Company Act 1956 therefore the company has made an application to the Ministry of Corporate Affairs Govt. of India for approving the salary of the whole time director as per the resolution passed in the annual general meeting dated 31st July 2012. Central Government has approved the salary of the whole time director at a lesser amount. Thereafter the company had made second application to the Central Government to approve the excess salary however no response was received from the Central Government. Assessee was asked to refund the excess salary of Rs. 2.14 crores out of Rs. 1.99 crores pertained to the year under consideration. The assessee has refunded the excess amount of salary to the company and filed revised return of income showing the actual amount of salary received as approved by the Ministry of Corporate Affairs Govt. of India. However the Assessing Officer has taxed the excess amount as salary income on the ground that the amount was received by the assessee. The ld. CIT(A) has deleted the addition holding that refund of salary by the assessee was not voluntary but was to comply with the legal requirements of law therefore the same cannot be considered as income assessable to tax In the case of the assessee the Central Government had decided the remuneration according to the provisions of Companies Act 1956 and the refund of the salary was not voluntary but was to comply with the legal requirement of law. We find that the facts and issue involved in the case of the assessee are similar to the case of the CIT Vs. Raghunath Murti 2008 (8) TMI 996 - DELHI HIGH COURT . We consider that the refund was made merely with a view to comply with the provisions of Companies Act 1956 therefore we do not find any infirmity in the decision of ld. CIT(A). Accordingly the appeal of the Revenue is dismissed.
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