Dismissing the appeal of the revenue the Court held that, Salaries to directors for preceding year was accepted by revenue. There was no extraordinary increase in salary. Accordingly the Assessing Officer was not justified in considering and comparing remuneration paid in assessment year 2004-05. Deletion of addition by the Tribunal is held to be justified. (AY. 2008 -09)
PCIT v. Patel Alloy Steel Co. (P.) Ltd. (2019) 103 taxmnn.com 431/ 262 Taxman 167 (Guj.) (HC) Editorial: SLP of revenue is dismissed, PCIT v. Patel Alloy Steel Co. (P.) Ltd. (2019) 262 Taxman 166 (SC)
S. 40A(2) : Expenses or payments not deductible–Excessive or unreasonable–Salaries to directors- Preceding year was accepted by revenue–No extraordinary increase in salary-Disallowance is held to be not justified.