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TMI Blog2022 (7) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... e and challenge its correctness in the case of another assessee, without just cause. When it is not possible for the revenue to challenge an order of the appellate authority in one case and when it has accepted identical order of the appellate authority in another case, it cannot at all be open to the Assessing Officer to challenge the order of CIT(A) on an issue on which relief has been given by CIT(A), in an earlier year, which has been not been challenged in appeal by the Assessing Officer. It is not the case of the Assessing Officer that the earlier year s CIT(A) s order was not challenged on account of low tax effect or any other technical reason. Once the stand of the CIT(A), on an issue, is accepted in one year, unless there are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 2017, and observed as follows: 2.4.1 Ground No. 1 is raised against the AO's action in making an addition of Rs. 2,46,00,000/- by way of disallowance of part of remuneration paid to the directors considering the same as excessive. The AO has noticed that the assessee has claimed an expenditure of Rs. 4,50,00,000/- for the year under consideration on account of Directors' remuneration as against Rs. 2,04,00,000/- for the immediate preceding year i.e. AY 2012-13. The said payment is covered by the provisions of section 40A(2)(b) of the IT Act. The assessing officer has called for the details friend justification for directors' remuneration at an increased amount of Rs.2,46,00,000/- when compared to that of the immediate prec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the directors. 2. The AO simply disallowed the remuneration without bringing any material on record justifying the enhanced remuneration was excessive. 3. There was no revenue loss as it was the case of tax neutrality. 2.4.4 The AR submitted the month wise turnover registered during the year under consideration which has been increased by about 2 cores from the preceding year. He has stated that the appellant company was anticipating a huge turnover and hence it was resolved increase the remuneration of the directors who are themselves medical professionals put in their best efforts for the business of the company. As there was a change in the government policy of banning surrogacy services foreign parents, the turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to conclude that how the remuneration was excessive and argued that the provisions of the section 40A(2)(b) say that the assessing officer has to form the opinion about the unreasonableness or excessive expenditure by taking into consideration the free market value of the services. In the case of the appellant, he argued that the assessing officer is failed to bring on record any comparable cases/instances to arrive at the decision that the expenditure claimed was excessive. The AR referred to some decisions of jurisdictional tribunal and also the apex court as per which the assessing officer before invoking the provisions of section 40A(2)(b), has to take into consideration the comparable instances or cogent evidence to demonstrate the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny effort to bring on record the relevant facts and the material to justify the unreasonableness/excessiveness of the remuneration paid to the directors -professionals of the appellant company. He has simply mentioned that the enhanced remuneration of Rs. 2,46,00,000/- was excessive and hence disallowed u/s. 40A(2)(b). The AO has also not considered the increase in the turnover of the appellant company during the year under consideration which has been brought on record by the AR. It is also considered that there is a force in the argument of the appellant company that the directors being qualified medical professionals had put in the best efforts and it cannot be ruled out that whatever the increase in the turnover was due to the efforts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Union of India v. Kaumudini Narayan Dalal [2001] 249 ITR 2191, Hon ble Supreme Court had an occasion to consider whether it is open to revenue to accept a judgment in the case of one assessee, and appeal, against the identical judgment in the case of another. Their Lordships held that such a differential treatment on the same set of facts was not permissible in law, and observed that, it is not open to revenue to accept the judgment in the case of the assessee in that case and challenge its correctness in the case of another assessee, without just cause. The same view was reiterated by the Hon ble Supreme Court in the case of Berger Paints India Ltd. v. CIT [2004] 266 ITR 992, and followed by the Hon ble Delhi High Court in the cases ..... X X X X Extracts X X X X X X X X Extracts X X X X
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