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TMI Blog2016 (12) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... since the inception. There is no presumption that ladies engaged in medical profession cannot be engaged as Directors in company. Moreover on what basis learned CIT(Appeals) has held that they be paid for only 50% of the salary is also not comprehendible. It is not the case that the learned CIT(Appeals) has compared the services rendered with prevailing market price. Dehorse any cogent basis, it is an arbitrary order, which is not sustainable. The Revenue should not try to sit into the shoes of a businessman and decide how to conduct the business.Accordingly find that the lady Directors being well qualified persons and associated with the company since earlier period cannot be disallowed the remuneration of 50% as held by the learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is arbitrary and unjustified. 4. For that the learned CIT(Appeals)-1, Patna has erred in not considering the allowance of the transit damages of ₹ 7,945/- which ought to be allowable under business expenditure. 5. For that the learned CIT(Appeals)-1, Patna has erred in not considering the allowance of late fee of ₹ 5,168/- which ought to be allowable under business expenditure. 2. At the outset in this case the learned counsel of the assessee submitted that he shall not be pressing ground Nos. 1,2,4 and 5. Accordingly these grounds are dismissed as not pressed. 3. Apropos ground No. 3:- On this issue the AO made the disallowance posing as under:- The perusal of papers submitted by the assessee, it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that Dr. Moti Sinha and Dr. Nibha Kumari had been associated with Prashant Motor Pvt. Ltd. right from is very inception and are involved in various matters related to the day to day functioning of the company. No evidence has been brought non recod to show that Dr. Moti Sinha had not worked in the company. Similarly, Dr. Nibha Kumari has also been associated with the day to day activities of company relating to sales and supervisory matters of workshop. It was further submitted that there is no bar in her continuing with her medical profession while also not being associated with the day to day affairs of the company. The appellant also placed reliance on Walchand and Co Private Limited (1967) 65 ITR 381 (SC) in which the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the salary of ₹ 50,000/- per month as reasonable. On appeal the Commissioner (Appeal) deleted the disallowance. On appeals by the Revenue, the Hon'ble Tribunal held that where there was nothing o suggest that payment of remuneration to director was excessive having regard to either (a) fair market value of service or facilities or (b) legitimate need of business of assessee or (c) benefits derived by or accruing to assessee on receipt of such service or facilities, no disallowance could be made u/s 40A(2) of IT Act 1961. The Tribunal held in favour of the Assessee and against to the Revenue. In the instant case the Assessing Officer disallowed the remuneration without any evidence and disallowed u/s 40A(2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these circumstances the debt of commercial expediency is not considered to have been fully satisfied. The ends of justice would be met if the remuneration paid to Dr. Moti Sinha and Dr. Nibha Kumari is restricted to 50% of the claim. The disallowance made by the Assessing Officer is accordingly restricted to 50%. 5. Against the above order the assessee is in appeal before the ITAT. 6. I have heard both the counsel and perused the records. Upon careful consideration I find that lady Directors are well qualified persons. The authorities below have drawn adverse inference that since they are occupied in other engagements also they cannot give time to this company. I find that this is a totally untenable surmise and conjecture devoid o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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