No Disallowance U/s. 40A(2) if Personal Tax already paid on Remuneration

DCIT Vs Bombay Samachar Pvt. Ltd. (ITAT Mumbai) Conclusion- Payment of high remuneration to Directors cannot be disallowed by treating the same as a tool to shift profits to evade tax when the Directors have already offered the income for tax through their personal returns. FACTS – Assessee is engaged in publishing newspaper and is carrying on such activity for more than 150 years. In the year 2007, assessee filed its return declaring loss of more than INR 1 Crore. In the said year, the assessee paid remuneration of INR 48 Lakhs each to three of its whole time director. The said director ha...