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2016 (9) TMI 257 - AT - Income TaxDisallowance of Salary to Director - Held that:- The Hon’ble Gujarat High Court in the case of CIT v. Prayashvin B. Patel, [1999 (10) TMI 60 - GUJARAT High Court ] as well as ACIT v. JNG Builders P. Ltd. [2013 (8) TMI 1016 - ITAT DELHI] have held that there are certain expenses such as audit fees, salaries, professional fee , insurance , printing and stationary, bank charges, house keeping charges , repairs and maintenance etc which are necessary to maintain the corporate entity and are allowable expenses and it is not necessary that every year the assessee must have earned income from business or profession and the assessee may be required to spend the amount for carrying on its activities . The assessee company incurred expenses of ₹ 17,866/- towards legal expenses, audit fees, bank charges and miscellaneous expenses which had been allowed by the ld. CIT(A). However as per the facts emerging from the records, there were no efforts or contributions made by the Directors to carry on the business of the company as in-fact no business was carried on by the assessee company during the entire previous year, hence in our considered view , the remuneration of ₹ 1,38,000/- paid to Directors was rightly disallowed by the A.O. and confirmed by the ld. CIT(A)
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