And despite this huge annual turnover and large number of centers to look after and supervise, the assessee incurred a total expenditure of number more than Rs.
46,720/ out of such remuneration and companymission under Section 10 4A .
42,967/ and Rs.
45,753/ , Rs.
The Revenue thereupon preferred the present appeals with special leave obtained from this Court.
46,162/ Rs.
5,000/ per month was inclusive of the remuneration and companymission paid to the four directors and Shri K.A. Dikshit.
N. Bhagwati, J. The.
40,162/ , Rs.
excessive or unreasonable, if the legitimate business needs of the assessee and the benefit derived by or accuring to the assessee therefrom were taken into account from the point of view of a businessman.
Under Section 10 4A .
45,753/ , Rs.
During the four relevant assessment years the assessee paid to its four directors and one K.A. Dikshit who was Personal Assistant to Rani J.D. Devi, one of the directors of the assessee, certain remuneration and companymission in companysideration of their attending to the work of the assessee The I T, O. was of the view that the amounts paid to these four directors and K.A. Dikshit by way of remuneration and companymission were unreasonable and excessive having regard to the legitimate business needs of the assessee and the benefit derived by or accuring to it therefrom and he, therefore, disallowed the amounts of Rs.
23,66.000/ to Rs.
30,86,000/ and the assessee had two producing centers, one at Fatteabad and the other at Chum in Darjeeling district, and also several other distributing centers.
42,967/, and Rs.
46,720/ out of the remuneration and companymission paid to four directors of the Company and one K.A. Dikshit ibr these four assessment years by resort to Section 10 4A of the Indian I.T. Act, 1922 was unjustified.
It is number necessary to reiterate the various facts circumstance set out in the judgment of the High Court in support of the view taken by it but it will be sufficient to state that the annual turnover of the assessee during the assessment years in question ranged between Rs.
The Revenue carried the matter to the High Court by way of a Reference but the High Court also took the same view as the Tribunal and having regard to the faces and circumstances of the case, which in the view of the High Court were eloquent, the High Court held that so far as K A. Dikshit was companycerned lie was neither a director number person having any substantial interest in the assessee and hence Section 10 4A had numberapplication in relation to him and so far as the four directors were companycerned, though Section 10 4A was applicable, there was numberhing to show that the payment of companymission and remuneration to them was right in holding that the disallowance of various amounts out of the remuneration and companymission paid to them was unjustified.
The view taken by the Income Tax Officer was companyfirmed in appeal by the Appellate Assistant Commissioner but on further appeal at the instance of the assessee, the Tribunal disagreed with the view taken by the taxing authorities and held that numberpart of the remuneration or companymission paid to the four directors and Shri A.K. Dikshit companyld be regarded as ?
5,000/ per month at the head office and this expenditure of about Rs.
