Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Income Tax Officer Ward 6 (2) Kanpur Versus M/s Somani Iron & Steel Ltd.

Disallowance of manufacturing and other expenses - CIT(A) allowed part relief - Held that:- Undisputedly the assessee has gone to BIFR for revival of its industry and since there is temporary suspension of the business activities, therefore, minimum expenditure should be allowed. We accordingly find no merit in the arguments of the ld. D.R. Being convinced with the findings of the ld. CIT(A), we confirm the same. - Decided against revenue.

Disallowance of Director’s remuneration - CIT .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d:- 30-7-2015 - SHRI SUNIL KUMAR YADAV AND SHRI. A. K. GARODIA, JJ. For The Department : Smt. Swati Ratna, D.R. For The Assessee : Shri. B.P. Yadav, Cost Accountant ORDER PER SUNIL KUMAR YADAV: These appeals are preferred by the assessee as well as the Revenue against the respective orders of the ld. CIT(A). 2. Since common issues are involved in these appeals, these were heard together and are being disposed of through this consolidated order. We, however, prefer to adjudicate them one after th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(A) has erred in law and on facts in allowing the relief of ₹ 8,40,000/- as Director s remuneration without appreciating the fact that during the year under consideration no manufacturing activities were taken place as claimed by the assessee itself. 4. Apropos ground No.1, it is noticed that the assessee is a limited company and during the year under consideration it has not carried out any trading and manufacturing activity. The assessee-company has suspended its manufacturing activity w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ibution to provident fund, ESI, insurance, repairs and maintenance, etc. The assessee was asked to justify these expenses and in response thereto it was explained that the assessee s business has been temporarily suspended and the assessee-company has all intentions to resume the business and the assessee is pursuing the proceedings before the BIFR and the other corporate activities, legal and other proceedings relating to Company Law are being carried on. 5. Being not convinced with the explana .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

intention to resume business in the future upon approval of the rehabilitation scheme under the provisions of the law relating to Sick Industrial Company enshrined in Sick Industrial Companies (Special Provision) Act, 1985. The Assessing Officer has not considered or rather brushed aside the facts and the law laid down by the Courts and has disallowed the entire expenditure for the reasons not known to the law. 7. The ld. CIT(A) re-examined the claim of the assessee and relying upon ld. CIT(A) s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of its revival, minimum expenditure should be allowed to keep the industry of the assessee alive. 9. Having carefully examined the orders of the lower authorities in the light of the rival submissions, we find that undisputedly the assessee has gone to BIFR for revival of its industry and since there is temporary suspension of the business activities, therefore, minimum expenditure should be allowed. We accordingly find no merit in the arguments of the ld. D.R. Being convinced with the findings .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to justify the payment of remuneration and other expenses in view the fact that no business activity was carried on during the year under consideration. In response thereto, it was contended on behalf of the assessee that the business of the assessee is under suspension and has not been finally discontinued. With regard to the payment of remuneration to the Managing Director of ₹ 8.40 lakhs, the ld. counsel for the assessee has submitted that M/s Somani Iron & Steel Ltd. is a public l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l expenses of ₹ 87,345/- was also disallowed. Accordingly, a total disallowance of ₹ 13,18,626/- was made by the Assessing Officer. 12. Aggrieved, the assessee preferred an appeal before the ld. CIT(A) with the submission that during the year under consideration, ₹ 8.40 lakhs was paid by way of remuneration to its Managing Director Shri. R. K. Somany as against ₹ 10.50 lakhs in the preceding year. The said remuneration was duly approved by the General Body Meeting of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sanction of the scheme by the BIFR. Relying upon this evidence, the ld. CIT(A) has allowed remuneration of ₹ 8.40 lakhs paid to the Managing Director. The other disallowance was confirmed. 13. Aggrieved, the Revenue has preferred an appeal before the Tribunal and the ld. D.R. has placed reliance upon the order of the Assessing Officer whereas the ld. counsel for the assessee has contended that the assessee s business is temporarily suspended and there is every possibility of its revival, a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hole time Managing Director of the company, having observed that the assessee s business is temporarily suspended and there is every possibility of its revival, as the assessee has gone in BIFR for revival of its business. We, therefore, find no infirmity in the order of the ld. CIT(A) on this issue and accordingly we confirm the same. I.T.A. No. 88/LKW/2014 & 95/LKW/2014: 15. These are cross appeals filed by the Revenue as well as the assessee against the order of the ld. CIT(A) pertaining .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

irs and maintenance, etc. The assessee was asked to justify these expenses, but being not convinced with the explanations of the assessee, the Assessing Officer has disallowed the entire expenditure, which was restricted to by the ld. CIT(A) upto 50%. 18. Identical issue was examined by us in the foregoing appeal for assessment year 2006-07, in which we have allowed 50% of the expenditure of the total claim. Therefore, following our findings in the foregoing appeal, we confirm the restriction of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Updates     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version