appeal filed by Revenue and cross objection filed by assessee were heard together and disposed of by this common order for sake of convenience. Shri S. K. Battacharyya held 50.13 per cent shares in assessee company as on 30th Sept., 1978. He was also employee-director of assessee company. In assessment proceedings of assessee for year 1979-80, ITO held that since Shri S. K. Bhattacharyya was employee of company, provisions of s. 40A(5) and not provisions of s. 40(c) applied for considering admissible limits of remuneration payable to him. assessee, on appeal filed before CIT (A), relied on Tribunal Special Bench decision in case of Geoffrey Manners & Co. Ltd. vs. ITO (1983) 3 SOT 40 (Bom) (SB) in ITA No. 1296 (Bom)/1976-77 decided on 29th July, 1978 to effect that in case of employee- director, provisions of s. 40(c) and not provisions s. 40A(5) applied. CIT (A), however, relied on Gujarat High Court decision in case of CIT vs. Bharat Vijay Mills Ltd. (1981) 128 ITR 633 (Guj), Karnataka High Court decision in case International Instruments (P) Ltd. vs. CIT (1981) 130 ITR 315 (Kar) and order of Supreme Court refusing to grant Special Leave to assessee in case of CIT vs. Travancore Chemicals Manufacturing Co. (1982) 133 ITR 818 (ker) and rejected assessee's appeal for application of s. 40(c) of IT Act. He, however, proceeded to hold that limit applicable to assessee's case would be Rs. 72,000 for detailed reasons mentioned by him in his order. Since in assessee's case total payments to Shri S. K. Bhattacharyya were Rs. 63,162, he held that not disallowance was called for in instant case. Revenue is in appeal against order of CIT (A) on ground that CIT (A) erred in holding that in view of cl.(a) of s. 40A(5) of Act, overall limit of Rs. 72,000 applied for total remuneration, perquisites and benefits and on ground in deleting disallowance of Rs. 10,128. Further, it is submitted that CIT (A) failed to appreciate that in view of cl. (c) of s. 40A(5) overall limit was Rs. 60,000 and not Rs. 72,000. On behalf of assessee' reliance is placed on Tribunal, Special Bench decision in case of Geoffrey Manners & Co. Ltd. referred to above. I have carefully considered facts and circumstances of case and t h e arguments on either side. undisputed facts are that Shri S. K. Bhattacharyya was employee-director of assessee-company holding 50.13 per cent shares. question is whether provisions of s. 40A(5) or s. 40(c) applied on facts on case. I have persuade decision of Gujarat High Court in case of CIT vs. Bharat Vijay Mills (1981) 128 ITR 633 (Guj) relied upon by CIT (A). I find that there is no dispute in this appeal for considering question whether provisions of s. 40(c) or s. 40A(5) of IT Act applied to person, who is director or person who is closely related to director. arguments and decision proceeded on basis that decision proceeded on basis that provisions of s. 40A(5) applied to facts of case. Further, in case of International Instruments (P) Ltd. vs. CIT decided by Karnataka High Court (1981) 130 ITR 315 (Kar), it was case of person who was employee for part of year and was director- cum-employee for remaining part of year. For part of year for which he was mere employee, clearly his remuneration was to be regulated under s. 40A(5)(i) or (ii) of IT Act for period for which he was director- cum-employee remuneration was to be regulated under s. 40(c) of IT Act. question before High Court was how aggregate remuneration payable to him during year was to be regulated. For this purpose, provision has been made in first proviso to s. 40A(5)(a) that combined remuneration could not exceed Rs. 1,02,000 during year, and this is what Karnataka High Court directed. ld. Judges did not lay down as general proposition that in all cases of employees whether director or not, provisions of s. 40A(5) applied. It was specific case of employee, who was partly employee plain and simple and partly employee-cum-director. As to case of CIT vs. Travancore Chemicals Manufacturing & Co. Ltd. (supra), question were employees of company or not. question before High Court was not Whether provisions of s. 40(c) or 40A(5) applied to facts of case. None of these three cases provide any guidance on question as to which of two provisions, namely s. 40(c) or s. 40A(5) applied to case of employee who was also director of company. In my opinion Tribunal Special Bench decision in case of Geoffrey Manners & Co. Ltd. vs. ITO in I. T. A. No. 1296 (Bom) 1976-77 decided on 29th July, 1978 is directly on question which of two provisions applied to facts of present case. As held by Members of Special Bench, I shall hold that provisions of s. 40A(c) and not s. 40A(5) applied to facts of case. Since under s. 40(c) applied to facts of case. Since under s. 40(c) of IT Act, limit applicable is Rs. 72,000 for whole year, in my opinion CIT (A) was justified in applying this limit of Rs. 72,000 to facts of present case. appeal filed by Revenue deserves to be and is accordingly dismissed. assessee has filed cross objection on ground that CIT (A) erred in applying provisions of s. 40A(5) in respect of remuneration paid to Shri S. K. Bhattacharyya. It is urged that Shri Bhattacharyya being person substantially interested in assessee-company, provisions of s. 40A(5) had no application. As explained in earlier part of order, cross objection filed by assessee is allowed. *** INCOME TAX OFFICER v. MANAGEMENT STRUCTURE & SYSTEM PRIVATE LTD.