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TMI Blog2022 (7) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case and in law, the learned CIT(A) has erred in allowing the ground of the assessee company by deleting the additions made of Rs. 2,46,00,000/- by way of disallowance of part of remuneration to the directors considering the same as excessive." 2."The appellant prays that the order of the CIT(A) on the leave directions be set aside and that of the assessing Officer be restored." 3. To adjudicate on this appeal, it is sufficient to take note of the fact that on an identical issue the CIT(A) had given relief in the assessment year 2013-14, vide his order 14th February 2017, and observed as follows: 2.4.1 Ground No. 1 is raised against the AO's action in making an addition of Rs. 2,46,00,000/- by way of disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition made has to be deleted. The learned AR in the written submissions has also referred to following case laws support of the arguments put forth by him. 1. CIT vs. Indo Saudi Services (Travel) P Ltd. (Bom-HC) (2009) 310 ITR 306 2. CIT vs. V.S. Dempo & Co. P Ltd. (2011) 244 CTR 102 (Bom-HC) 3. Edwise Consultants Pvt. Ltd. vs. DCIT. Mumbai & Edwise Consultants Pvt. Ltd. Vs Addl.CIT, Mumbai (MUMBAI - ITAT) (2016) 44 ITR (Trib.) 236. 2.43 The contentions and arguments 1. The turnover of the assessee during the year has been increased due to the efforts made by the directors. 2. The AO simply disallowed the remuneration without bringing any material on record justifying the enhanced remuneration was excessive. 3. There wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was substantial with that of the preceding year. The enhanced remuneration was stated to be approved by the board of directors of the company by a resolution passed. The AR has thus argued that the enhanced remuneration was justified and pleaded for deletion. 2.4.5 The next argument put forth by the AR is that the assessing officer has mechanically resorted to the disallowance by simply stating that the enhanced remuneration paid to the directors to be excessive. The learned AR has drawn the attention that the assessing officer did not justify the basis to conclude that how the remuneration was excessive and argued that the provisions of the section 40A(2)(b) say that the assessing officer has to form the opinion about the unreasonablene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the directors. Hence it was argued there was no question of loss to the revenue and hence the addition made by the AO requested to be deleted. The AR has also relied on the judgments of the honorable Bombay High Court wherein the issue was decided in favour of the assessee. 2.4.7 The submissions and arguments made by the AR and also several decisions of the jurisdictional tribunal as well as the jurisdictional High Court relied upon by the appellant have been perused and considered. It is observed that the assessing officer has not made any effort to bring on record the relevant facts and the material to justify the unreasonableness/excessiveness of the remuneration paid to the directors -professionals of the appellant company. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel, and as we have also verified from our records, no appeal was filed against this decision of the CIT(A). Yet on the same issue, in this immediately following year, the Assessing Officer is in appeal before us. The question that we really need to consider is whether such a deviation from the past practice of not filing an appeal on this issue is permissible. 5. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of applicable legal position. 6. In the case of Union of India v. Kaumudini Narayan Dalal [2001] 249 ITR 2191, Hon'ble Supreme Court had an occasion to consider whether it is open to revenue to accept a judgment in the case of one assessee, and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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