MAHESHWARI DEVI JUTE MILLS KANPUR Vs. COMMISSIONER OF INCOME-TAX U P LUCKNOW

JUDGEMENT

(1.) This is a reference under Section 21, Excess Profits Tax Act read with Section 66(1), Income-tax Act.

(2.) The assessee is the Maheshwari Devi Jute Mills Limited, Kanpur. The assessee claimed that, in the relevant account period, it had paid a salary of Rs, 28,850/- to one Lala Hari Shankar Bagla who had been appointed along with Munna Lal Khetan as joint general manager of the company. The assessee, therefore, claimed a deduction of this amount from its assessable income which contention, however, was overruled by the Income-tax Appellate Tribunal. On an application made by the assessee, the following question has been referred to this Court for our decision:

(3.) Lala Hari Shankar Bagla was one of the directors of the assessee company and, on 27-9-1941, at a directors' meeting at which he was present but did not vote, the following resolution was passed: