J. R. PATEL & SONS (PRIVATE) LTD. vs COMMISSIONER OF INCOME-TAX, — 1971 PTD 184

Citation: 1971 PTD 184

Court: Gujarat High Court

Year: 1970

Decision Date: 1970-12-31

Parties: J. R. PATEL & SONS (PRIVATE) LTD. vs COMMISSIONER OF INCOME-TAX, JUDGMENT

Headnotes

Case cited as 1971 PTD 184

Judgment Text

Court Name: Gujarat High Court Judge(s): B. J. Divan, P. N. Bhagabati Title:J. R. PATEL & SONS (PRIVATE) LTD. vs COMMISSIONER OF INCOME-TAX, JUDGMENT Reported As: 1971 PTD 184 Result: Question answered in the affirmative Judgment JUDGMENT DIVAN, J.-In this reference under section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act), the following question has been referred to the High Court at the instance of the assessee: "Whether, on the facts and in the circumstances of the case, the amounts of Rs. 24,500, Rs. 49,865 and Rs. 18,000, being the excess over the amount of Rs. 12,000 paid to Shri A. J. Patel in the respective assessm ent years 1958-59, 1959-60 and 1961-62, are properly allowable under section 10(2)(xv) of the Indian Income-tax Act, 1922?" The assessee is a private limited company incorporated in the then Baroda State on December 18, 1941. The relevant assessm ent years are 1958-59, 1959-60 and 1961-62, the corres--ponding previous years being calendar years 1957, 1958 and 1960. For the assessment year 1958-59, the assessee-company claimed a deduction of Rs. 36,500 paid as remuneration to its managing director, A. J. Patel. Similarly, for the assessment year 1959-60, the deduction claimed for such remuneration was Rs. 61,866; and for the assessment year 1961-62, the deduction claimed for such remuneration was Rs. 30,000. Till March 31, 1956, the assessee-company was paying to its managing director remuneration at the rate of Rs.…

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