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2012 (7) TMI 99 - AT - Income TaxSalary versus Commission - Treating the commission paid by the assessee as salary by CIT(A) even though it was reflected as commission in his books of account - Revenue contested that CIT ignored the provisions of section 194H r.w.s 40(a)(ia) - the assessee firm was engaged in the trading of mobile and fixed phone connections on commission basis - Held that:- The payment of salary is in line with the specific condition contained in the appointment letter. That being so, the AO obviously erred in observing that the stand taken by the assessee was a mere after-thought so as to avoid taxability. The employees of the assessee firm were given training with the probation period of six months. Thereafter, the employee was to activate the connections sold by the assessee. The payment was as per the activated connections. Section 17 (1)(iv) provides for “salary” to include, inter alia, any commission in view of or in addition to any salary. The payment in the present case being on the basis of the activated connections, was a part of salary - as the payments in question are covered within the definition of “salary” in terms of section 17 it cannot be hit by the provisions of section 194 H - against revenue.
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