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2014 (1) TMI 194 - ITAT AGRAGenuineness of the expenses – Certified data purchase – Held that:- The data can be collected from any government and private agency - the Revenue authorities could not dictate to the assessee as to how and in what manner the businessman shall have to run its business - The expenditure shall have to be considered from the point of view of the businessman/assessee and not from the point of view of the Revenue authorities - Following CIT v. Dhanrajgirji Raja Narasingirji [1973 (3) TMI 6 - SUPREME Court] - The assessee on the basis of the evidences have been able to prove that the assessee actually purchased data from M/s. Shiva Fund Trust and maintained complete details on the same and same information have been used for the purpose of earning business income - The credentials of M/s. Shiva Fund Trust are also genuine because the Revenue Department has accepted the income declared by the party in their return of income which was received from the assessee - in the absence of any data purchased from this party, the assessee would not have been able to earn commission income. As compared to subsequent assessment year, the assessee has incurred lesser expenses under the head certified data purchased, thus, the history of the assessee would also suggest that the assessee has actually and genuinely incurred expenses under the head data purchased - The Assessing Officer did not point out any specific defect in any data purchased by the assessee for the purpose of business, therefore, in the absence of any incriminating material or finding against the assessee, the Assessing Officer was not justified in holding that the assessee could not substantiate the above expenses under the head data purchase - the entire disallowance under the head is wholly unjustified – Decided in favour of Assessee. Expenses relating to salary – Held that:- There are three types of salary paid as has been noted by the Assessing Officer in the assessment order, i.e., salary paid to administrative staff/supervisor and remaining salary/wages paid temporary staff, apprentice and field staff and in their cases no provident fund provisions are applicable - The assessee has filed copies of Form 16 to show that genuine payments of the salary have been made to the staffs who are employed for the purpose of the business of the assessee - the assessee maintained complete details on the same issue regarding salary payment - looking to the previous year salary paid to the staff in percentage and volume of business receipts - there is no question on inflating expenses by the assessee under the head salary as has been found by the Assessing Officer - the complete data were produced before the Assessing Officer in which no specific details against the assessee have been pointed out by the Assessing Officer Further salary accounts have been filed to show that payment of salary have been made to large number of employees and details of month-wise and namewise have been maintained - Payment of salary cannot constitute payment of commission - No specific details of violation of TDS provisions have been noted in assessment order - salary has paid for the purpose of business and the Assessing Officer has not brought any adverse material against the assessee – thus, in the absence of any material against the assessee, there was no justification to disallow 30 percent of the expenses out of salary – Decided in favour of Assessee. Expenses relating to referral fees – Held that:- All the expenses related to the earning of commission from Bajaj Allianz have been incurred wholly and exclusively for the purpose of business of the assessee - The referral fees and the disallowance should be maintained at 5 per cent. of the total expenses claimed by the assessee under this head as against proposed by the Assessing Officer of 30 per cent - the authorities were not justified in disallowing the expenses under the head certified data purchased and salary, wages and bonus - The additions made on account of disallowances of 30 per cent. of expenses under these heads – Decided partly in favour of Assessee.
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