TaxTMI 
TaxTMI 
2014 (1) TMI 282
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....ng evidence which shows that these expenses were incurred for business expediency. 2. On the facts and circumstance of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 21,45,162/- made u/s 40A(2)(b) of the Income Tax Act, 1961." 2. Ground No.1 relates to the deletion of the disallowance of Rs. 1,88,834/- incurred by the assessee for the business development. Facts revealed that all the expenses are basically credit card (AEB card) expenses incurred by Shri Rajiv in Hotel Crown Plaza, Mainland China, China Club, Sheraton, Palm Town and Country club. The assessing officer disallowed the SAME as being personal expenses of the assessee and no details have been submitted by assessee in regard of such expenses. When....
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....e not personal expenses or capital expenses and have been incurred wholly and exclusively for the purpose of the business of the assessee. The expenses has been incurred through credit card by Shri Rajiv Behal, who was the director of the Company up to 20.12.2008 and subsequent to that he was working as consultant of the company up to 31.03.2009 and reimbursed by the company. 4. The assessing officer treated these expenses to be personal expenses of Mr. Rajiv Behal. CIT(A) did not give any finding whether the expenses are the personal expenditure of Shri Rajiv Behal or not but took the view that the expenses are incurred wholly and exclusively for the purpose of the business and expenses incurred are routine and generally incurred by the p....
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....Mr Behal with Mrs.Behal, another director of the company, estimated the fair value of the services rendered by Mr. Behal to Rs. 10,39,447/- and disallowed a sum of Rs. 21,45,162/-. When the matter went before the CIT(A), CIT(A) deleted the disallowance after considering submissions of the assessee by observing as under:- "I have considered the submission of the appellant, observation of the Assessing Officer and consultancy agreement entered in to with Sh. Rajiv Behal by the appellant company. It is seen that appellant company was promoted by Sh. Rajiv Behal alongwith other Director. By an agreement dated 25.07.2008 executed between the appellant company and other promoters have sold 100% equity of the appellant company to Dr. Oetker India....
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.... Dr. Oetker India Pvt. Ltd., Fort Mumbai. Therefore, after 20.12.2008 Sh. Rajiv Behal worked as consultant to the company at the retainer ship fee of Rs. 50,00,000/- p.a. which was paid as per the agreement entered into between Sh. Rajiv Behal and appellant company. The salary payment made to Sh. Rajiv Behal was as per last year and in the A. Y. 2008-09 no disallowance on account of salary payment has been made, therefore, there is no question of disallowing out of salary payment during the year. The salary payment was made for the services rendered by Sh. Rajiv Behal as Director of the appellant company. Hence, disallowance made by Assessing Officer was not justified. As regards the consultancy service charges paid to Sh. Rajiv Behal of R....
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....n at the rate of 2,00,000/- p.m. that is at the rate at which he was paid remuneration during the assessment year 2008-09. Subsequently, shri Rajiv Behal and other directors sold the entire equity share capital of the assessee company to Dr. Oetker India Pvt. Ltd, Fort Mumbai and Shri Rajiv Behal was not having any shareholding in the company, what to talk of substantial interest. During the assessment year 2008-09, no such disallowance was ever made. Subsequently, the company entered into agreement with Shri Rajiv Behal for rendering the professional services at the rate of 50,00,000/- p.a. and accordingly Shri Rajiv Behal was paid up to 31st March, 2009. So far as the payment up to 20.12.2008 is concerned since the remuneration was found ....