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TMI Blog2021 (8) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has observed that they are the Managers to Directors and control the company. AO has not disputed that the Board meeting has approved the increase of remuneration payable to the Directors in accordance with the provisions of the Companies Act, 1956 during the previous year 2011-12 2012-13. When a Company pays higher salary to the Directors of the Managers or other Officers or employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed both in law and on the facts in invoking the provisions of Sec 40A(2)(b) ignoring the facts on record and rejecting the explanations of the assessee in the summary manner. Thus the addition of ₹ 16,20,000/- as confirmed by the CIT Appeals is liable to be deleted. 2. That the Authorities below erred both in law and on the facts in the estimations of excessive Salary Paid to the direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter making disallowance of ₹ 54 lac u/s 40A (2)(b) of the Act, disallowance of ₹ 46,887/- u/s 14A read with Rule 8D of the Income Tax Rules and addition of ₹ 9,72,406/- u/s 2(24) (x) read with Section 36 (1)(va) of the Act for delayed deposit of payment of employees contribution towards ESI/PF. 4. Being aggrieved by the assessment order, the assessee filed appeal before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance has been estimated by the Assessing Officer. Thus, the Ld. AR submitted that the addition should have been deleted. The Ld. AR submitted that the estimation of excessive salary paid to the Directors at 15% out of gross salary paid of ₹ 1,08,000,00/- to the Director by the Assessing Officer and CIT(A) is wrong, baseless and is based on surmises and conjectures. 6. The Ld. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to decide that particular salary should not have been paid to the Directors. It is the business decision and, therefore, the disallowance u/s 40A(2)(d) is wrongly invoked by the Assessing Officer and wrongly confirmed by the CIT(A) and disallowing on estimated basis to 15%. Thus, the CIT(A) was not right in confirming the disallowance. Hence, the appeal of the assessee is allowed. 8. In resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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