Rule of consistency defeated the Revenue's challenge to director remuneration and commission disallowance.

Where commission and excess remuneration paid to a director had already been allowed in earlier years and accepted in subsequent assessments, the Revenue's challenge was rejected on the rule of consistency. The court found the claim identical to the assessee's own prior cases and held that the record disclosed no cogent material to show the expenditure was not for business purposes. In these circumstances, the earlier reasoning under Section 36(1)(ii) did not justify interference, no substantial question of law arose, and the Revenue's Section 260A appeal was dismissed.

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Issues: Whether the Revenue's appeal under Section 260A of the Income-tax Act, 1961 was liable to be dismissed where the disallowance of commission and excess remuneration paid to a director had already been deleted in earlier years and similar treatment had been accepted in subsequent years.

Analysis: The claim was found to be identical to claims allowed in the assessee's own case for earlier assessment years, and the same treatment was also reflected in later assessments. On those facts, the earlier adverse reasoning under Section 36(1)(ii) of the Income-tax Act, 1961 did not furnish a basis to interfere. The record did not disclose any cogent material to show that the expenditure was not incurred for business purposes, and the dispute was governed by the rule of consistency.

Conclusion: The disallowance was not justified, no substantial question of law arose, and the Revenue's appeal was dismissed.

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