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TMI Blog2020 (12) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... "1.1 That in the facts and circumstances of the case and in law, the Ld. CIT (A) erred in deleting the addition towards income from salary. 1.2 That in the facts and circumstances of the case and in law, the Ld. CIT (A) erred in deleting the addition towards salary without appreciating the following facts stated by the assessee, which showed that the amount added was also received, and was due, in the assessment year under consideration, and the refund became due only in later years: (i) This amount had been approved by the Annual General Meeting of the employer company on 31.7.2012. (ii) The employer company had made a second representation dated 30.10.2014 to the Government for approval of the excess amount even after the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the CIT (Appeals) on the above issue be set aside and that of the Assessing Officer be restored." 3. All the grounds of appeal filed by the Revenue are interconnected to the issue of deleting the addition towards salary, therefore, for the sake of convenience, all these grounds of appeal are adjudicated together as under:- 4. The fact in brief is that the assessee has filed return of income on 24th July, 2014 declaring total income at Rs. 3,34,54,360/-. Subsequently, the assessee has filed revised return of income on 29th March, 2016 showing total income of Rs. 1,34,88,102/-. The case was subject to scrutiny assessment and notice u/s. 143(2) was issued on 20th Sep, 2016. The assessee was working as a whole time director of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not is chargeable to income tax as income from salary. Further under the provision of the act, the taxability of salary has been provided on due basis or payment basis whichever is earlier. Therefore, the Assessing Officer has stated that the total salary originally received by the assessee was to be taxed as income from salary and accordingly, the amount of Rs. 1,99,56,259/- (Rs. 3,29,28,217/- - Rs. 1,29,61,958/-) was added to the total income of the assessee. 5. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee. The relevant part of the decision of the ld. CIT(A) is reproduced as under:- "4. I have carefully considered the facts on records, submission of the Ld. Authorized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-15 at Rs. 14.79 lakhs aggregating to Rs. 214.45 lakhs. In response to this recovery letter, the appellant has refunded Rs. 1,50,00,000/- vide cheque No. 276237 dated 29.02.2016 and Rs. 64,45,000/- vide cheque No. 276240 dated 15.03.2016 of Axis Bank Ltd. Both the cheques are duly debited in the bank account of the appellant. It is worthwhile to mention here that the above factual position is not in dispute. 4.1.1. Therefore, from the above factual position, it emerges that the entitlement to receive remuneration including perquisite is governed by the provisions of Companies law and hence is to be approved by the Remuneration Committee of the Central Government. In the case of appellant, Government of India, Ministry of Corporate Affair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt has held that the refund of salary was neither voluntarily nor was it for any extraneous consideration and in fact, the refund was made merely with a view to comply with the provisions of Companies Act, 1956. Therefore, net amount of the salary was only taxable. The facts of the case of the appellant before me, are identical and hence I also hold that remuneration to the appellant was not due more than what was approved by the Government of India, Ministry of Corporate Affairs, New Delhi and hence amount of the refund was not voluntarily but to comply with the provisions of Companies Act, 1956. Accordingly, I further hold that only the net amount of the salary after deducting the refund amount is taxable and hence the addition made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration. The assessee has refunded the excess amount of salary to the company and filed revised return of income showing the actual amount of salary received as approved by the Ministry of Corporate Affairs, Govt. of India. However, the Assessing Officer has taxed the excess amount as salary income on the ground that the amount was received by the assessee. The ld. CIT(A) has deleted the addition holding that refund of salary by the assessee was not voluntary but was to comply with the legal requirements of law, therefore, the same cannot be considered as income assessable to tax. The ld. CIT(A) has also placed reliance on the decision of Hon'ble Delhi High Court referred by the learned counsel in the case of CIT Vs. Raghunath Murti (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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