INDIA CARBON LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE facts in the instant case are slightly involved. THE reference arises under the Income-tax Act, 1961. THE assessee in this case is India Carbon Ltd., Noonmati, Gauhati. THE following two questions are referred to this court under Sub-section (1) of Section 256 of the Act :

(2.) THE assessee claimed deduction of remuneration paid to the managing director in the sum of Rs. 2,07,783 for the assessment year 1970-71. THE Income-tax Officer held that the amount was excessive and allowed Rs. 54,000. THE balance of Rs. 1,53,783 was disallowed. For the assessment year 1972-73, the Income-tax Officer allowed Rs. 54,000 and disallowed Rs. 1,66,330. For the year 1973-74, he allowed Rs. 54,000 and disallowed Rs. 1,90,081. On appeal, the order of the Income-tax Officer was confirmed (sz'c). THE Appellate Tribunal confirmed the order in appeal and held ; "It is conceded by both parties that the facts and circumstances are the same in the assessment years in question as were in the assessment years when the Tribunal disposed of the appeals. Under such circumstances, we hold that the Appellate Assistant Commissioner was justified in allowing the managing director's remuneration in full as claimed by the assessee."

(3.) WE are unable to hold that there is the possibility of such an interpretation as suggested by the assessee. In our understanding, Section 40(c) is not capable of any interpretation except in the manner answered by the Income-tax Appellate Tribunal. Therefore, we answer both the questions in the affirmative, in favour of the Revenue and against the assessee. No costs.