SUNDARAM FASTENERS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee--Sundaram Fasteners Ltd., Madras, is a company, in which the public are substantially interested. THE assessment year involved is 1982-83, for which the accounting year ended on March 31, 1982.

(2.) WHILE computing the income, the Inspecting Assistant Commissioner (Assessment) disallowed a sum of Rs. 21,171 under Section 40(c) of the Income-tax Act, 1961 (Act No. 43 of 1961--for short "IT Act"). He made further disallowance under Section 40A(5) of the Income-tax Act of a sum of Rs. 33,083.

(3.) SECTION 40(c) is relatable to any expenditure incurred by a company relatable to a director or to a person, who has a substantial interest in the company or to a relative of the director or of such a person, as the case may be, and such expenditure may result directly or indirectly in the provision of any remuneration or benefit or amenity to the categories of personnel, referred to above.