2021 (4) TMI 570

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..... rmises. AO also brought on record the fact that Ms. Pallavi Luthura was Director having 50% of the shareholding in another company called Cloud Cuckoo Farm during the year under assessment but assessee stated that Cloud Cuckoo Farm s profit is nil and brought on record its balance sheet in additional evidence. Again, it is surprising to disallow 35% of the remuneration, particularly when genuineness of the job profile has not been questioned, merely on the ground that Ms. Pallavi Luthura was a Director in Cloud Cuckoo Farm. It is also a matter of fact on record that Ms. Pallavi Luthura was a whole time director in the assessee company and was paid remuneration for the work assigned to her during the year under assessment. Merely on th .....

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..... ted. 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : The assessee has challenged the confirmation of disallowance of an amount of ₹ 6,73,933/- being 35% of the remuneration paid to Ms. Pallavi Luthura, one of the director of the assessee, under section 40A(2)(b) of the Income-tax Act, 1961 (for short the Act ) on the ground that Assessing Officer (AO) has ignored the facts and evidences brought on record by the assessee qua qualification and responsibility undertaken by Ms. Pallavi Luthura in the business of the assessee. 3. Assessee carried the matter before the ld. CIT (A) by way of filing the appeal who has confirmed the addition made by the AO by partly allowing the appeal. Feeling .....

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..... the shareholding in another company called Cloud Cuckoo Farm during the year under assessment but assessee stated that Cloud Cuckoo Farm s profit is nil and brought on record its balance sheet in additional evidence. Again, it is surprising to disallow 35% of the remuneration, particularly when genuineness of the job profile has not been questioned, merely on the ground that Ms. Pallavi Luthura was a Director in Cloud Cuckoo Farm. It is also a matter of fact on record that Ms. Pallavi Luthura was a whole time director in the assessee company and was paid remuneration for the work assigned to her during the year under assessment. So, we are of the considered view that merely on the basis of conjectures and surmises, provisions contained u/s .....

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