ITAT Ahmedabad Upholds ₹2.40 Cr Disallowance u/s 40A(2)(b) for Excess Director Remuneration

DCIT Vs Khyati Chemicals Private Limite (ITAT Ahmedabad) Excess Director Remuneration Restored Under Section 40A(2)(b) – ITAT Ahmedabad Reverses CIT(A) and Upholds ₹2.40 Crore Disallowance The Ahmedabad Bench of the ITAT allowed the Revenue’s appeal for AY 2018-19 and restored the disallowance of ₹2.40 crores u/s 40A(2)(b) made on account of excessive remuneration paid to two whole-time directors of Khyati Chemicals Pvt. Ltd., holding that the payments were unreasonable and a device to distribute profits in the garb of salary to avoid dividend taxation. The Assessing Officer found that...