Remuneration to directors cannot be disallowed merely because dividend could have fetch more tax

VGA Digital Printers Pvt. Ltd. Vs JCIT (ITAT Pune) It is seen that the assessee paid total remuneration of Rs.67,23,600/- to three directors. A sum of Rs.43.41 lakhs was paid in the preceding year. The assessee complied with the requirements of the Companies Act, 1956 for enhancing salary and bonus to the directors. Not only that, the assessee advanced reasons before the AO which led to increase in the salary of directors. The AO had made out a case that if the assessee company had paid dividend instead of remuneration to directors, such payment would have been fetched more tax. In our conside...