In appeal, the Appellate Assistant Commissioner companyfirmed the order.
279 and 280 of 1966, Appeals by special leave from the judgment and order dated September 4, 1962 of the Bombay High Court in Income tax Reference No.
He was of the view that since the increase in the remuneration or the salary of the officers was number reflected in the increase in the profits of the assessee, it was number expenditure which companyld be justified as laid out wholly and necessarily for the purposes of the business under s. 10 2 xv of the Indian Income ,tax Act.
B. Dadachanji and O. C. Math r, for the respondent in both the appeals .
K. Mitra, T. A. Ramachandran, S. P. Nayyar for R. N. Sachthey, for the appellant in both the appeals .
500 per month and of each of the officers by Rs.
The Commissioner of Income tax has appealed to this Court, with special leave.
250 per month.
The Judgment of the Court was delivered by Shah, J. The respondent hereinafter called the assessee is a private limited Company registered under the Companies Act, 1913.
In the year 1953 the remuneration of each of the Directors was increased by Rs.
CIVIL APPELLATE,ARE JURISDICTION Civil Appeals Nos.
The assessee carries on the business of acting as Managing Agents for nine public limited Companies.
The assessee submitted that the managed Companies had companysiderably increased the area and activities of the business and they had undertaken new lines which entailed greater burden on the Directors and officers of the assessee.
23 of 1961.
In proceedings for assessment of income for the years 1953 54 and 1954 55 the Income tax Officer called upon the assessee to show cause why the increase in the remuneration of the Directors and officers should number be disallowed in the companyputation of the taxable income of the assessee.
The Income tax Appellate Tribunal modified the order of assessment.
750 per month.
1,000 per month and of two out of the three officers by Rs.
By resolution dated July 9, 1952, the remuneration of each of the Directors of the assessee was increased with retrospective effect from April 1, 1952 by Rs.
The assessee had employed three executive officers to administer its affairs.
The Income tax Officer disallowed the increase in the remuneration of the Directors and officers of the assessee.
The business of the assessee was managed by three Directors.
Each Director was paid a remuneration of Rs.
2,500 per month.
500 per month and of the remaining officer by Rs.
