TaxTMI 
TaxTMI 
2020 (3) TMI 553
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.... 'F', Mumbai (for short 'the Tribunal' hereinafter) in I.T.A.No.9030/Mum/2010 for the assessment year 2007- 08. 3. The following questions have been proposed by the Revenue as substantial questions of law: "1. Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified in holding that the remuneration paid to the director is allowable under Section 37(1) of the Act after observing that the services were rendered by Shri Faraz G. Joshi, the Director without appreciating that during the course of search operation, Mr. Faraz G. Joshi himself admitted that he was not aware about the person who looked after the day to day business activity and since last 6 years, he was not attending the office nor was any ....
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....eport of the DRI after recording that the report has been quashed by Customs, Excise & Service Tax Appellate Tribunal (CESTAT) without appreciating that the decision of CESTAT has not been accepted by the Customs Department and appeal is pending before Hon'ble High Court of Gujarat? 6. Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified in deleting the addition made in pursuant to the findings provided by DRI, a Government Agency on the ground that assessing officer did not conduct any independent enquiry and only relied upon the finding of DRI, ignoring that DRI is a Government Agency and the information provided by it can be fully relied upon?" 4. On going through the questions we are of the ....
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....Shri Joshi in the form of salary / perquisites was not expended wholly and exclusively for the purpose of business of the respondent - assessee. Accordingly, an amount of Rs. 3,00,00,000.00 claimed as paid to Shri Joshi as salary / perquisites was disallowed being not expended wholly and exclusively for the purpose of business of the respondent - assesse. 7. Aggrieved by the aforesaid order of the assessing officer, respondent - assessee preferred appeal before the Commissioner of Income Tax (Appeals) - 41, Mumbai, hereinafter referred to as 'the first appellate authority'. By the appellate order dated 04.11.2010, the first appellate authority held that respondent - assessee had failed to prove that Shri Joshi had rendered services to the ....
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....hi was quite reasonable and no adverse inference could be drawn therefrom. 10. Besides, Tribunal also found that in all the assessments made upto the date of the search, salary payment to Shri Joshi was allowed. Even post-search from the assessment year 2009-10 onwards where assessments have been made under Section 143(3) of the Act, salary paid to Shri Joshi was not disallowed. In such circumstances, Tribunal set aside the order of the assessing officer as affirmed by the first appellate authority on this count. 11. Supreme Court in the case of Sassoon J. David & Co. Pvt. Ltd. Vs. CIT, 118 ITR 261 examined the expression "wholly and exclusively" appearing in Section 10(2)(xv) of the Income Tax Act, 1922 which corresponds to Sectio....