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TMI Blog2015 (8) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... 427/LKW/2014: 3. This appeal is preferred by the Revenue against the order of the ld. CIT(A) mainly on two grounds which are as under:- 1. The ld. CIT(A) has erred in law and on facts in allowing the relief of Rs. 5,55,000/- under manufacturing and other expenses without appreciating the fact during the year under consideration manufacturing activities remained suspended and the nature of expenses debited under this head relates to manufacturing activities. 2. The ld. CIT(A) has erred in law and on facts in allowing the relief of Rs. 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 grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. CIT(A) with the submission that the Assessing Officer has failed to appreciate the reference to the BIFR and the acceptance of the application by BIFR was sufficient indication and suggestive of the assessee's 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 order for assessment year 2001- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses 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 Rs. 8.40 lakhs, the ld. counsel for the assessee has submitted that M/s Somani Iron & Steel Ltd. is a public limited company incorporated under the provisions of the Indian Companies Act, 1956 and the assessee is also listed with the Stock Exchange at Mumbai, Kanpur and Delhi. To keep the company alive, the whole time Director is required and it has only a Managing Director who is looking after the entire affairs of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing 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, as the assessee has gone in BIFR. Since the assessee is a private limited company and listed with the Stock Exchange at Mumbai, Kanpur and Delhi, a whole time Director is required to look after the entire affairs of the assessee-company. Therefore, the remuneration paid to the whole time Managing Director should be allowed. 14. Having carefully examined the orders of the lower authorities in the light of the rival submissions, we find that the ld. CIT(A) has allowed the remuneration paid to the whole time Managing Director of the company, having observed that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s confirmed. 19. Ground No.2 of Revenue's as well as assessee's appeals relates to miscellaneous expenditure incurred under different heads out of which major expenditure claimed was under the head Managing Director's remuneration amounting to Rs. 8.40 lakhs as against Rs. 8.54 lakhs in the immediately preceding year. In the immediately preceding year, the ld. CIT(A) has allowed Managing Director's remuneration of Rs. 8.40 lakhs having observed that to keep the assessee's commercial unit alive, certain expenditures are to be incurred on remuneration to the Managing Director. It was also observed by the ld. CIT(A) that the Managing Director is a whole time Director who is looking after the affairs of the company. Since we have allowed remun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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