COMMISSIONER OF INCOME-TAX, BOMBAY vs M/S. WALCHAND & CO. (PVT.) LTD., BOMBAY

The Supreme Court held that under Section 10(2)(xv) of the Indian Income-tax Act, 1922, the increase in directors' remuneration is allowable even if it is not reflected in the profits of the assessee. The Court emphasized that the Appellate Tribunal must provide reasons for its decisions, and its authority under Section 33(4) is not arbitrary but must align with the evidence and justice of the case. The ruling clarified that the reasonableness of expenditure should be judged from the perspective of the businessman, not the Revenue, and that increased remuneration does not necessitate a corresponding increase in profits.