TMI Blog2008 (11) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, he allowed the deduction at 15.6 per cent, and made additions of the remaining amount – held that - learned Commissioner (Appeals) and the learned Tribunal had not ignored the relevant considerations which were required to be taken into account in terms of section 40A(2)(a) of the Act – deduction allowed fully - 124, 142 of 2006, 12 of 2007, 99 of 2008 - - - Dated:- 21-11-2008 - N. P. GUPTA and KISHAN SWAROOP CHAUDHARI JJ. K. K. Bissa for the appellant. Mahendra Gargieya for the respondent. JUDGMENT The judgment of the court was delivered by N. P. GUPTA J. - These four appeals arise out of different orders of the Tribunal, passed on different dates, and relate to different assessment years, but relate to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was 15.6 per cent, therefore, he allowed the deduction at 15.6 per cent, and made additions of the remaining amount. 3. The matter was carried in appeal and the learned Commissioner (Appeals) deleted the additions. The learned Commissioner (Appeals) had found that it is a fact on record that this issue has already been examined in the earlier assessment years by the Assessing Officer while completing assessment under section 143(3), and they have accepted the claim of the assessee with regard to payment of lease rent. Admittedly, the Assessing Officer has not brought any evidence or material for departure from settled issue, and, therefore, no useful purpose can be served by setting aside the items. Then even de hors this, the learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Assessing Officer justifying deviation from the earlier stand taken by the Revenue in not accepting this payment of lease rent as per the agreement. Thus, it was found that the Commissioner (Appeals) rightly dealt with the matter in allowing the assessee's claim. Consequently, the appeal of the Revenue was dismissed. 5. We have heard learned counsel for the either side and have gone through the impugned orders and the relevant provisions of law. 6. At the outset it may be observed that in all these cases the learned authorities below have, inter alia, proceeded on the ground that in still earlier years the deduction was allowed and there is neither any reason to deviate nor is there any material on the basis of which any d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is made, or the legitimate needs of the business or profession of the assessee or the benefit derived by or accruing to him therefrom, so much of the expenditure, as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction. Essentially the question as to whether the expenditure is unreasonable or excessive in the opinion of the Assessing Officer which has been subject-matter of adjudication by two appellate authorities below, is primarily a brass question of fact, and does not give rise to any substantial question of law. This is second aspect of the matter. 10. However, since the question as framed comprehends the aspect, that the deletion of addition has been made by ignoring the relevant consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormed and the special aptitude of the employee, future prospects of extension of the business and a host of other related circumstances. It is erroneous to think that increased remuneration can only be justified if there is a corresponding increase in the profits of the employer. Laying down these principles the disallowance, as set aside by the High Court was maintained, and the appeals of the Revenue were dismissed with. costs. 11. We may then refer to yet another judgment of the hon'ble Supreme Court in J. K. Woollen Manufacturers v. CIT [1969] 72 ITR 612, wherein again the Bench presided by the three hon'ble judges considered the aspect of disallowance of part of expenditure and its permissibility and held that in applying the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of Rs. 5,000 as reasonable commission while the Appellate Assistant Commissioner held that commission at 12½ per cent. was reasonable. Then, the Appellate Tribunal disallowed 50 per cent. of the commission on the view that the commission paid to V in excess of Rs. 24,000 was not really paid wholly for the purpose of carrying on the business. It was in that fact situation, that the hon'ble Supreme Court held that the entire amount of Rs. 75,465 was an amount laid out or expended wholly and exclusively for the purpose of the business of the assessee. 12. In our view, these two judgments are complete answer to the question, to the effect that the learned Commissioner (Appeals) and the learned Tribunal had not ignored the relevant con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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