Commissioner of Income Tax vs Ansal Properties Industries Ltd.

The following questions of law have been referred for our opinion u/s 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 upholding the order of the learned Commissioner(Appeals) whereby the learned first appellate authority has held that income from buildings, namely, ''Surya Kiran'', ''Ansal Bhawan'' and ''Asha Deep'' could not be taxed in the hands of the assessed because the builder company is not the owner of these buildings ?

Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in holding that deduction up to Rs. 72,000 could be allowed in respect of salary paid to an employee director ignoring the ceiling limit of Rs. 60,000 as provided by Clause (c) of Section 40A(5) of the Income Tax Act ?

The admitted position is that question (1) is required to be answered in the affirmative, in favor of the assessed and against the revenue, in view of the decision of the Supreme Court in Commissioner of Income Tax, Bombay etc. Vs. M/s. Podar Cement Pvt. Ltd. etc., .

Insofar as question (2) is concerned, in view of the decision of the Supreme Court in Commissioner of Income Tax, Bombay Vs. M/s. Indian Engineering and Commercial Corporation Pvt. Ltd., , an employee director is entitled to the benefit of higher of the two ceilings mentioned in Section 40(c) and Section 40A(5) of the Income Tax Act, 1961.

The reference is disposed of accordingly.