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2015 (5) TMI 581 - AT - Income TaxDisallowance u/s 40A(2)(b) - excessive remuneration to Directors - Held that:- In the present case, it is noticed that one of the Directors, namely, Ms. Dilpreet Singh is a Chartered Accountant and also qualified CPA from the USA. She was earlier employed with Febindia Overseas Private Ltd. as a Chief Financial Officer and another Director, Mr. Prakash Tripathi is a commerce Graduate, he started his career with the Indian Institute of Management, Ahmedabad as a Research Investigator in various projects. Later on, he joined the Desert Artisans Handcrafts Pvt. Ltd., Jodhpur in 1991 and grown to Managing Director in the said company by 2007, therefore, both the Directors were well qualified and having the requisite experience in finance and community managed company. It is also noticed that Ms. Dilpreet Singh was getting a remuneration of ₹ 29,54,990/- when she was earlier employed with M/s Fabindia Overseas Pvt. Ltd. and Mr. Prakash Tripathi was getting a remuneration of ₹ 13,02,471/- from M/s Desert Artisans Handicrafts Pvt. Ltd. Jodhpur wherein he was earlier employed. Therefore, the remuneration amounting to ₹ 11,40,000/- and ₹ 15,68,050/- respectively received by them from the assessee cannot be said to be excessive by keeping in view, their previous experiences and earlier employment. Moreover, the AO had not brought any material on record to substantiate that as to how and in what manner the remuneration paid to the Directors was excessive. He had also not given any basis for allowing the remuneration @ 20% of the total receipts. Thus the disallowance made by the AO and sustained by the Ld. CIT(A) was not justified. Accordingly, the same is deleted. - Decided in favour of assessee.
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