DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2 1 1 AHMEDABAD, AHMEDABAD vs. KHYATI CHEMICALS PRIVATE LIMITED, AHMEDABAD

ITA 1856/AHD/2025Status: DisposedITAT Ahmedabad16 January 2026AY 2018-19Bench: DR. BRR Kumar (Vice President), Shri T. R. Senthil Kumar (Judicial Member)10 pages
AI SummaryAllowed

What did the Tribunal hold?

The ITAT held that the excessive remuneration paid to directors was a device for tax evasion and restored the disallowance of Rs. 2.40 crore. The assessee's cross-objections regarding spray dryer and computer software expenses were dismissed.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting the disallowance of Rs. 2.40 crore paid as remuneration to directors. The assessee also filed a cross-objection against other disallowances.

What were the issues?

Whether the remuneration paid to directors was excessive and constituted tax avoidance, and whether expenses on spray dryer and computer software were allowable as revenue expenditure or eligible for depreciation.

Which sections of the Income-tax Act were involved?

Section 40A(2)(b),Section 37(1),Section 32(1)(ii),Section 32(1)(iia)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: DR. BRR Kumar & Shri T. R. Senthil Kumar

I.T.A No. 1856/Ahd/2025 & C.O.86/Ahd/25 A.Y. 2018-19 2 PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Revenue as against the appellate order dated 21-08-2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to a

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 40A(2)(b)

All 1,172 judgments and leading authorities on Section 40A(2)(b) →

Recent GST High Court judgments

Search GST case law →