Cit vs Milk Food Ltd.
2007 Latest Caselaw 896 Del

Citation : 2007 Latest Caselaw 896 Del
Judgement Date : 1 May, 2007

Delhi High Court

Cit vs Milk Food Ltd. on 1 May, 2007

Bench: M B Lokur, V Gupta

ORDER

1. The following question of law has been referred for our opinion under Section 256(1) of the Income Tax Act, 1961:

Whether on the facts and in the circumstances of the case, the Income- tax Appellate Tribunal was correct in law in confirming the decision of the CIT (Appeals) that in the cases of managing director employees, remuneration paid is regulated by Section 40(c) and not by Section 40A(5)?

2. In view of the decisions rendered by the Supreme Court in CIT v. Indian Engg. & Commercial Corpn. (P) Ltd. and CIT v. Continental Construction Ltd. , on the remuneration received by the Managing Director, who is also an employee of the company, tax has to be deducted on the basis of the higher of the two ceilings under Section 40(c) and Section 40A(5) of the Income Tax Act, 1961.

3. The reference is disposed of accordingly.

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