TaxTMI 
TaxTMI 
2014 (9) TMI 722
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..... He held that reasonable salary payable would be Rs. 1 lac per month. The exact reasoning given by the Assessing Officer in this regard is reproduced below:- "3. Salary paid to the Directors: During the year under assessment the assessee has shown loss from business activity. It was stated that the assessee company was engaged in the business of financing and investment. It was noticed from the P&L account that there were only two items of receipt, first of Rs. 5,29,54,306/- as interest received and second of Rs. 13,90,626/- as dividend received. The second item of Rs. 13,90,626/- was claimed exempt and hence was not declared as business income. As against these two items of income, substantial amount of Rs. 72,60,704/- was debited as ex....
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.... the period April, 2008 to March, 2009 is allowed and excessive salary of Rs. 48,30,000/- (Rs.60,30,000 - Rs. 12,00,000) is disallowed. This gives an addition of Rs. 48,30,000/- in form of salary to the director, the assessee has furnished inaccurate particulars of income for which penalty proceedings u/s 271(1 )(c) of the Act are being initiated separately. (Addition of Rs. 48,30,000/-) 3. In the reasoning given in paragraph 3, the Assessing Officer had referred and adverted to the position that the respondent assessee had earned interest income of Rs. 5,29,54,306/- under the head 'income from business'. The assessee had also received dividend income of Rs. 13,90,626/-. This, the Assessing Officer observed, would not constitute a justifi....