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2014 (7) TMI 217 - HC - Income TaxExpenditure u/s 37 of the Act - Remuneration and training of working director – Held that:- The dispute is purely a factual one - the facts and the evidence brought on record by the assessee have been analysed by all the authorities below and in it’s proper perspective - Tribunal rightly makes note of the entire factual matrix and affirms the orders passed by the AO as well as the CIT (A) in disallowing the claims - although an attempt was made on behalf of the assessee to make out a case that Mr Krishna Kachalia was instrumental in acquiring distributorship of VOLVO, no evidence whatsoever had been filed to support and substantiate the same - sending Mr. Krishna Kachalia, who was a Commerce Graduate and had joined the assessee just a month back, for a management course in marketing at the cost of the assessee without any exposure or experience, could not be justified on the touchstone of commercial expediency - assessee had not been able to satisfactorily explain the services rendered by Mr Krishna Kachalia and whatever explanation that was sought to be given in this regard was also found to be not acceptable by the AO by giving specific reasons - the onus was on the assessee to establish on evidence that the expenditures were incurred wholly and exclusively for the purpose of it’s business - assessee had failed to discharge the onus. The expenses claimed as a deduction by the assessee for the payment of salary to Mr Krishna Kachalia was rightly disallowed – Mr. Krishna Kachalia was doing a management course with S.P. Jain Institute of Management & Research from October 2003 to April 2005 and therefore it was not possible that he was working for the company in the capacity of a Director at the same time when in fact he was a student - during the time Mr Krishna Kachalia was shown to be in-charge of the marketing activities at the assessee’s Borivali Center, another Director of the assessee was also looking after the marketing activities at the very same place and was paid a remuneration of ₹ 10,00,000/- per annum for the work - in no other Center of the assessee was more than one Director assigned and the fact that Mr Krishna Kachalia was assigned to look after the work at Borivali in addition to another Director, his appointment was only for name sake – assessee could not substantiate the contentions as made by him in front of the authorities – thus, no substantial question of law arises for consideration - Decided against Assessee.
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