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2012 (12) TMI 23 - AT - Income TaxAddition u/s 40A(2)(b) - commission of Rs 69 lacs paid to relative( Shri VKB) - part dis-allowance deleted by CIT(A) on the basis that Shri VKB has filed his return of income admitting income of Rs.44 lakh and therefore, to that extent, it cannot be said that the payment was with a view to avoiding tax - Held that:- On perusal of return it is found that income declared by Shri VKB under the head “income from business or profession” is only Rs.25 lacs. On working back of commission income received from TDS deducted of VKB by various parties, commission receipts come out to be more than Rs 1 crore, hence, it is clear that no part of the commission payment by present assessee-company to Shri VKB was forming part of the income declared by Shri VKB in his return of income. For the purpose of allowability of commission payment, what is required to be established by the assessee who is paying commission is this that the person to whom commission was paid has rendered services to the assessee-company for which commission was paid. No evidence has been brought on record before authorities below or before us that this increase in turnover has resulted because of services rendered by Shri VKB for which commission payment has been made - Dis-allowance of whole amount confirmed - Decided against assessee Addition on estimate basis treating the same as salary expenditure (staff) as having been incurred out of undisclosed sources of income - salary expenditure accounted for month of May’07 to Aug.’07 only and not for month of April’07 and Sep.07 to Mar.’08 - Held that:- On the one hand, the assessee-company paid the commission of Rs.69 lakh and submitted that the turnover has increased during this year from Rs.788 lakh in preceding year to Rs.4268 lakh in the present year and on the other hand in the month of April’07 and during Sept.’07 to Mar’08, the assessee is not accounting for any salary in its books of account. Addition upheld - Decided against assessee Dis-allowance u/s 40(a)(ia) - assessee contending payment before due date - Held that:- Though amount is paid to the credit of the government in the subsequent year but no exact date of such payment is available in records. Hence, we restore the matter back to the file of AO for fresh decision after finding out regarding the date of payment of TDS by the assessee in the next year and if it is found that the same was paid before due date of filing of return income of the present year, no dis-allowance u/s. 40(a)(ia) should be made
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