DCIT 8(3), MUMBAI V. SUSHRUT SURGICALS P. LTD, MUMBAI

ITA 5349/MUM/2010

• Counselvise Citation: 534919914 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 30-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MUTSADDI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, H BENCH, MUMBAI. BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI R.S.PADVEKAR, JUDICIAL MEMBER I.T.A NO.5349/ MUM/2010 ASSESSMENT YEAR: 2007-08 DY. COMMISSIONER OF INCOME TAX 8(3), .. APPELLA NT AAYAKAR BHAVAN, M.K. ROAD, MUMBAI VS SUSHRUT SURGICALS PRIVATE LIMITED .. RESPONDEN T 3 RD FLOOR, ABOVE BANK OF INDIA, M.G.ROAD, HANUMAN ROAD CORNER, VILE PARLE (E), MUMBAI-57. PA NO.AAACS 0660 H APPEARANCES: V.V.SHASTRI, FOR THE APPELLANT S.K.MUTSADDI , FOR THE RESPONDENT DATE OF HEARING : 24.8.2011 DATE OF PRONOUNCEMENT : 30 -08-2011 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CALLED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 24 TH APRIL, 2010, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2007-08. I.T.A NO.5349/ MUM/2010 ASSESSMENT YEAR: 2007-08 SUSHRUT SURGICALS PRIVATE LIMITED 2 2. IN GROUND NO.1, THE ASSESSING OFFICER HAS RAISED THE FOLLOWING GRIEVANCE: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.9,72,000 U /S. 40A3(IA) IN RESPECT OF EXCESS REMUNERATION PAID TO A LADY DIRECTOR WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW. 3. BRIEFLY STATED THE RELEVANT FACTS ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT 50 % OF THE REMUNERATION PAID BY THE COMPANY TO ITS LADY DIRECTORS WAS DISALLOWED AS EXC ESSIVE U/S.40A(2)(B) FOR THE ASSESSMENT YEARS 1999-2000, 2002-03, 2003-04, 2004- 05, 2005-06 AND 2006-07, RESPECTIVELY. DURING THE YEAR, THE ASSESSEE HAS CLAIMED RS.10,80,000 AND RS.8,64,000 PAID TO BOTH THE LADY DIRECTORS AS DEDU CTION. THE ASSESSING OFFICER RELAYING ON THE ACTION TAKEN IN THE PRECEDING YEARS , DISALLOWED 50% THEREOF AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), WHO FOLLOWING T HE DECISIONS OF THE ITAT FOR THE ASSESSMENT YEARS 1999-2000, 2002-03 TO 2004-05 AND ALSO FOLLOWING THE DECISION OF HIS PREDECESSOR FOR THE ASSESSMENT YEARS 2005-06 AN D 2006-07, ALLOWED THE CLAIM OF THE ASSESSEE FOR THE PRESENT YEAR UNDER CONSIDERATI ON. AGGRIEVED, ASSESSING OFFICER IS IN APPEAL BEFORE US. 4. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL ON RECORD, WE DO NOT FIND ANY REASON TO INTERFERE WIT H THE ORDER OF THE CIT(A). WE FIND THAT SIMILAR ADDITIONS WERE MADE IN THE EARLIER ASS ESSMENT YEARS AND THE SAME HAVE FINALLY BE DELETED BY THE TRIBUNAL. COPIES OF THE ORDERS OF THE TRIBUNAL ARE PLACED ON RECORD. THE CIT(A) HAS FOLLOWED THE DECISION OF TH E TRIBUNAL AND ALLOWED THE APPEAL OF THE ASSESSEE. IN VIEW OF THIS, WE UPHOLD THE GR IEVANCE OF THE ASSESSEE AND DISMISS THE GROUND TAKEN BY THE REVENUE. 5. GROUND NO.1 IS THUS DISMISSED. 6. IN GROUND NO.2, THE ASSESSING OFFICER HAS RAISED THE FOLLOWING GRIEVANCE: I.T.A NO.5349/ MUM/2010 ASSESSMENT YEAR: 2007-08 SUSHRUT SURGICALS PRIVATE LIMITED 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.2,72,853 M ADE BY THE AO ON ACCOUNT OF REIMBURSEMENT OF MEDICAL EXPENDITURE OF THE DIRE CTORS BEING PERSONAL IN NATURE WITHOUT APPRECIATING THE FACTS AND CIRCUMSTA NCES OF THE CASE AND IN LAW. 7. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL ON RECORD, WE ALSO FIND THAT SIMILAR ADDITIONS WERE MA DE IN EARLIER ASSESSMENT YEARS AND THE SAME HAVE BEEN DELETED BY THE TRIBUNAL. COP IES OF THE ORDERS OF THE TRIBUNAL ARE PLACED ON RECORD. SINCE THE FACTS ARE IDENTICA L TO THAT OF THE EARLIER ASSESSMENT YEARS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). WE, ACCORDINGLY, UPHOLD THE ACTION OF THE CIT(A) IN DEL ETING THE ADDITION OF RS.2,72,853 TOWARDS MEDICAL EXPENSES OF THE DIRECTORS. 8. GROUND NO.2 IS THUS DISMISSED. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST, 2011 SD/- (R.S.PADVEKAR) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 30 TH AUGUST, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),18, MUMBAI 4. COMMISSIONER OF INCOME TAX, 8 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH H MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI