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TMI Blog2016 (1) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as the impugned order of the ITAT on the above aspect. The order of the CIT (A) is restored. The question framed is answered in the affirmative i.e. in favour of the Assessee and against the Revenue. - ITA 261/2004 - - - Dated:- 23-12-2015 - S. MURALIDHAR AND VIBHU BAKHRU, JJ For the Petitioner : Ms. Shashi M. Kapila with Mr. Pravesh Sharma, Mr. Sushil Kumar and Mr. Sanjay Kumar, Advocates. For the Respondent : Mr. Kamal Sawhney, Senior Standing counsel with Mr. Raghvendra K. Singh, Mr.Shikhar Garg And Mr. Sharad Agarwal, Advocates. ORDER 1. This appeal under Section 260A of the Income Tax Act, 1961 ( Act ) is directed against an order dated 15th December 2003 passed by the Income Tax Appellate Tribunal ( ITAT ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion that there is an excessive and unreasonable expense debited in the P L A/c for the financial activities of the company. This was basically in respect of two items of expenditure - one, the Director s salary which was ₹ 44,000 per annum and the other in the sum of ₹ 3 lakhs towards the salary paid to the staff and other miscellaneous expenses. 6. The appeal by the Assessee was allowed by the Commissioner of Income Tax (Appeals) [ CIT (A) ] by an order dated 14th January 2000. The CIT (A) noted that the Assessee had started paying salary to its Directors from the year in which it started the financial activity. In the earlier years when it was carrying out only agricultural activity, no salary was paid to the Directors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audited accounts, containing two separate P L accounts for the two distinct lines of activity, were not rejected. The disallowance could not have been made on the basis of surmises and conjectures. There was no material before the AO to come to the conclusion that the expenses were either excessive or unreasonable. The impugned order of the ITAT on this issue is unsustainable in law. 10. In that view of the matter, the Court sets aside the assessment order of the AO as well as the impugned order of the ITAT on the above aspect. The order of the CIT (A) is restored. The question framed is answered in the affirmative i.e. in favour of the Assessee and against the Revenue. 11. The appeal is allowed in the above terms. - - TaxTMI - TM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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