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2019 (10) TMI 634 - AT - Income TaxAddition as “salary income” instead of business income - The claim of the assessee is that the income earned by way of commission for expansion of business of the Principal - tax (TDS) has been deducted u/s.194H & 194D - HELD THAT:- Assessee could not substantiate its claim before the AO, therefore, the AO treated the commission receipt as income of the assessee from salary. CIT(A) relying on the decision of Kanwaljit Singh [2012 (12) TMI 168 - DELHI HIGH COURT] upheld the action of AO. Before us, the assessee produced ledger account of staff salaries, meeting expenses ledger account, business promotion expenses ledger account, rent and electricity charges ledger account etc. In respect of computation of income submitted by the assessee before the revenue authorities, he has himself considered ₹ 7,50,000/- under the head income from salary and rest amount has been taken as business income which is not accepted by the revenue authorities. The assessee has submitted profit and loss account in which he has shown commission received of ₹ 11,12,211/- and in the debit side he has debited some expenses which has not been examined by lower authorities. We also noticed that the assessee has been issued Form No.16 for the salary received and Form No.16A for the commission paid to the assessee in which the applicability rate of TDS has been deducted. The assessee submitted before us copy of ledger accounts which has not been considered by the lower authorities. In our opinion, to arrive the correct profit from the above activity carried out by the assessee, the expenses need to be verified on the part of the AO. Therefore, this issue is sent back to the file of AO for verification of expenses debited into the profit and loss account. Reasonable opportunity of being heard shall be given to the assessee and the assessee is directed to appear before the AO and cooperate in the assessment proceedings and he also directed to substantiate the expenses claimed with credible evidence before the AO. Accordingly, the issue raised by the assessee is allowed for statistical purposes.
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