TMI Blog1992 (7) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... of the solicitors regarding dilution of its shareholding in pursuance of the provisions of the Foreign Exchange Regulation Act, 1973, is a revenue expenditure under section 37 of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the remuneration of Rs. 24,000 paid to one of its directors, Shri V.S.K. Nadar, by the assessee, does not attract the provisions of section 80VV, read with section 37(1), of the Income-tax Act, 1961? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the expenditure of Rs. 15,814 as presentation of wrist watches to employees was a revenue expenditure incurred wholly and exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral meeting of the company, Shri Nadar was held entitled to receive remuneration of Rs. 2,000 per month and the provisions of section 80VV were not attracted. The Commissioner (Appeals) was of the view that Shri Nadar was a retired income-tax official and his services could have been more pertinent to income-tax representation than other fields of law. He, therefore, restricted the disallowance to Rs. 4,000 only. 6. On a second appeal before the Tribunal/the entire claim was allowed in full by the Tribunal with the following observations : "We have considered the rival submissions and the facts and circumstances of the case. We are of the view that the remuneration paid by the company to Shri Nadar does not fall within the purview of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The revenue, in this question, has not assailed the finding of fact by the Tribunal. The Tribunal has found as a fact that the remuneration in excess of Rs. 5,000 paid to Shri Nadar is not for any services rendered by him of the nature referred to in section 80VV and the remuneration was paid by the assessee to Mr. Nadar in his capacity as a tax consultant or adviser for giving general advice in relation to taxation matters. This finding has gone unchallenged. Therefore, we cannot but answer the second question in the affirmative and in favour of the assessee. 8. The last dispute relates to the assessee's claim for Rs. 15,814 on account of the price of wrist watches presented to its employees. The ITO and the Commissioner (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o attend to work punctually and was incurred also to keep the employees happy and to earn their goodwill towards the company as the employer, is not in dispute. In the face of the facts as found by the Tribunal, we cannot accept the contention of the revenue that the expenditure on account of such presentation to the employees was not expenditure wholly and exclusively laid out for the purpose of its business. The ITO, in the assessment order, has not either made out a case that there was extra-commercial consideration in presenting the watches to the employees. 11. We, therefore, answer the third question in the negative ( sic ) and in favour of the assessee. 12. There will be no order as to costs. Hore, J. - I agree. - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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