Kirpal, J.

1. In this petition, the Commissioner of Income Tax is seeking reference of the following question of law to this court :

"Whether the Income Tax Appellate Tribunal was correct in law and on facts in confirming the order of the Commissioner of Income Tax (Appeals) that as the remuneration of the employee, Shri Deepak Shriram, has been approved by the Company Law Board, the question of considering it under section 40A(2) could not again arise and that section 40A(2) is not applicable and thereby deleting the disallowance of Rs. 1,20,014 "

2. It appears that Deepak Shriram was the son of a director of the respondent-company. The respondent-company sought the approval of the Company Law Board and paid to the said employee such remuneration which was approved by the Company Law Board.

3. The Income Tax Officer sought to invoke the provisions of section 40A(2) and came to the conclusion that the salary which was being paid was excessive considering the professional qualifications, or lack of it, of the said employee. An appeal was filed and the Commissioner of Income Tax (Appeals) came to the conclusion that the proper provision to apply was section 40A(5) and that the case did not fall under section 40A(2). A further appeal was filed by the Department before the Income Tax Appellate Tribunal. The Tribunal came to the conclusion that the provisions of section 40A(2) were not applicable in view of the decision of the Company Law Board who had approved the salary of the said employee. The petitioner then sought reference under section 256(1), but the said application was rejected.

4. It is contended by Shri Jain that the question involved is under section 40A(2) and that the same should be referred. In our opinion, what the Tribunal has, in fact, decided is that, in view of the approval of the Company Law Board, the provisions of section 40A(2) do not apply. Section 40A(2) can be invoked if the Income Tax Officer, inter alia, comes to the conclusion that the expenditure which is being incurred is excessive or unreasonable. The question as to whether any expenditure which is incurred is excessive or unreasonable is a pure question of fact. The Tribunal came to the conclusion that because the Company Law Board had approved the remuneration, in effect, it could not be said that the expenditure incurred was excessive or unreasonable. It may be noted that the Company Law Board has the jurisdiction and authority to fix the remuneration, when approval is sought under the provisions of section 637AA of the Companies Act, 1956. The various factors which have to be taken into consideration while granting such approval are set out in the said section. One of the factors which has to be considered is the professional qualifications and experience of the individual in respect of whom the remuneration is being fixed. Therefore, the Company Law Board having taken into consideration the professional qualifications and experience and having fixed the remuneration of Deepak Shriram at Rs. 1,20,014, it must be held that the said remuneration was regarded as reasonable. The Company Law Board, which is also an expert in these matters, having decided that this amount was reasonable, it should not ordinarily be open to the Income Tax authorities to regard such fixation as unreasonable unless there are some other factors which can lead one to the conclusion that there was no proper application of mind by the Company Law Board or that a full and true disclosure had not been made before the Company Law Board at the time of the said Board fixing the remuneration. It is not contended before us that there was any misrepresentation or fraud played on the Company Law Board and, in our opinion, the conclusion of the Tribunal is one of fact and no question of law arises. The petition is, accordingly, dismissed. No order as to costs.

5. Petition dismissed.