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2015 (5) TMI 503 - AT - Income TaxExcessive salary paid to Directors - Disallowance under section 40A(2)(b) - CIT(A) deleted addition - Held that:- CIT(A) has made a finding of fact and has rightly held that the tax avoidance was never intended by assessee company and, therefore, we are in agreement with his finding. - Decided against revenue. Penalty/ fine imposed by ICICI Bank - CIT(A) deleted addition - Held that:- The nature of expenses is not in the nature of penalty but are expenses in the normal cause of business and we are in agreement with the findings of Ld. CIT(A) and, therefore ground of Revenue’s appeal is also dismissed.- Decided against revenue. Disallowance of advertisement expenses - Addition on account of capital expenditure - CIT(A) deleted addition - Held that:- In the case of CIT vs. liberty Group Marketing Division [2008 (4) TMI 219 - PUNJAB AND HARYANA HIGH COURT] in which it was held that the expenditure of glow sign board did not bring into existence any assets and enduring benefit for the business. Similarly, reliance was placed on Delhi Tribunal in the case of ITO vs. Spice Communications ltd. [2009 (10) TMI 648 - ITAT DELHI] in which it was held that by incurring expenditure on advertisement and sales promotion, assessee does not acquire any fixed capital assets.- Decided against revenue. Rent paid by director of the company in her individual capacity - Held that:- As per section 291 of the Act, 1956 provides for general powers of the board to its directors and directors serve as agents of the company and therefore, any transaction carried out by the directors on behalf of the company is a valid transaction. Keeping in view the fact that the company had used this premises for carrying out its business in Mumbai, which was undisputed by the Ld. AO, thus hold that the disallowance made by the Ld. A.O. on this ground was unjustified. - Decided against revenue.
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