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2013 (3) TMI 248 - HC - Income TaxPersonal expenses - whether can be taxed in the hands of assessee u/s 2 (24)(iv) as the amount was routed through the franchisee, which was the HUF of the assessee? - reopening of assessment - Revenue contented that ITAT instead of looking into the contents of the transaction, has chosen to look into the form of the transaction and ought to have upheld the orders of the AO as company has simply used the medium of HUF of the Directors in whose name the franchisee stood, to make payment towards their personal expenses and therefore ought - Held that:- A perusal of the records reveals that the assessees have various avathars in various establishments. The assesses are Directors in the company called 'M/s.C.R.S.Sons & Co. Ltd.,'. They are the partners, representing the Hindu Undivided Family, so far as 'CRS Holdings' are concerned. Two out of the four assesses represent the HUF in 'M/s.Sri Sundaravalli Collections', which is the purchasing arm for the M/s.CRS Sons & Co. Ltd., Apart from that, they also represent as franchisees (owned by the HUF, of which they are the co-parceners and karthas). Each of the unit has different composition. Each unit has varied number of members. Under such circumstances, the acceptability of the finding given by the Income Tax Appellate Tribunal has to be considered that the amounts paid by the company towards personal expenses of the assessee cannot be taxed in its hands under Section 2 (24)(iv). So far as the commission from SSVC is concerned, ITAT ordered remand of the issue on the ground that the commission by SSVC was not received by the assessees, but by the HUF of the assessees. The reasoning given by the Tribunal was that when the assessees claimed that the commission payments were made to the CRS Holdings, which is an income tax assessee and whereas, the CIT (A) held that commission was paid to HUF of the assessees and to sort out this contradiction, the Tribunal felt it appropriate to remand the matters to the AO. It is the contention of the Revenue that CRS Holdings did not file any return of income before the survey and the entire things were stage managed after survey. Only based on this statement of the Revenue, ITAT felt that it is a case to be investigated by the AO. It is also relevant to point out that the assessee in all these cases did not file any return in their individual capacity and notices under Section 147 were issued only on the ground that they did not file any return disclosing the perquisites and benefits received by them from the company and that they are guilty of omission to file the returns. ITAT has ordered remand only after considering the nature and circumstances of the transaction and in fact, after considering the modus operandi of the entire group. Learned counsel for the respondent has also filed the assessment order for the assessment year 2000-2001, by way of additional typed set of papers. Under such circumstances, the order of remand made by the Income Tax Appellate Tribunal is perfectly justified. No interference, having regard to legal and factual aspects discussed above - revenue appeal dismissed.
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