The assessee-company claimed deduction for remuneration paid to its Managing Director. The AO disallowed the claim alleging violation of the Companies Act, 2013 and also invoked section 40A(2)(b) alleging excessiveness. The Tribunal noted that remuneration was covered by the provisions of the Companies Act, 1956 (Schedule XIII, Part-C), continued by CBDT Circular No. 07/2015, and no government approval was needed. Explanation 1 to section 37(1) was not applicable since there was no violation of law. On the allegation of excessiveness, the AO had not produced any comparable cases to justify disallowance u/s 40A(2)(b). Held, remuneration was reasonable and allowable as deduction.  (AY. 2015-16)