Law:

Section:

Section 40(c), read with section 40A(5), of the Income-tax Act, 1961 - Business disallowance - Remuneration, etc., paid in excess of prescribed limit in case of company, etc. - Whether in case of directors who are also employees of company, provisions of both sections 40(c) and 40A(5) will be attracted and higher of two ceilings has to be applied - Held, yes CASE REFERRED TO CIT v. Indian Engg. & Commercial Corpn. (P.) Ltd. [1993] 201 ITR 723/ 68 Taxman 39 (SC) [Para 2]. Ms. Prem Lata Bansal for the Applicant. S.K. Khaitan for the Respondent. JUDGMENT B.C. Patel, CJ. - These two references are at the instance of the Revenue. The question raised being common in both the cases, the references are being disposed of by this common judgment and/or order. In IT Reference No. 379 of 1984, the question framed is as under:- "Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the provisions of section 40(c) and not section 40A(5) are applicable to the Director employees and on that ground deleting the disallowance of perquisites provided by the assessee company to its directors in excess of the limits permitted in section 40A(5)?" 2. IT…

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