Shri Faraz G. Joshi   was a promoter-Director of assesse company since 1972.  In response to specific query during search as to who looked after assesse company on day-to-day basis, he answered that he was not aware about who actually looked after day-to-day business activity since for last 6 years, he was not attending office and he was involved only in consultation.  On basis of this statement, Assessing Officer disallowed remuneration paid to Shri Faraz G. Joshi   by assessee company Tribunal held that answer of Shri Faraz G. Joshi quite reasonable and held that no adverse inference could be drawn therefrom.  Tribunal held that services were rendered by FJ and, hence, remuneration paid to him was allowable under section 37(1). High Court affirmed the order of the Tribunal. Followed Sassoon J. David & Co. (P.) Ltd. v. CIT (1979) 118 ITR 261 (SC). (AY.  2007-08)