Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 106 - AT - Income TaxCommission income - treated as business income OR income from other sources - Held that:- The commission paid to the assessee company is a non-genuine transaction and that the directors / employees of the assessee company have played no role in effecting their sales and that all the parties were contacted by him only and even no follow-up for recovery of bills payment was ever made by any of the directors / employees of the assessee company. Moreover, the assessee has even expressed its unwillingness to cross-examine any of the parties, including Shri Amit Gandhi. Therefore, an adverse inference is hereby drawn that the commission income which is alleged to have been earned @5% on sales of M/s.Shree Chem Industries, is of non-genuine character and accordingly the said sum of ₹ 7,33,360/- is hereby treated and taxed under the head “Income from Other Sources’. No reason to interfere in the order of the lower authorities treating the commission income as income from other sources. Claim of depreciation on the Rolls Royce Car - Loan processing expenditure and interest expenditure on the loan obtained for the purpose of purchasing the said car from Kotak Mahendra Bank Ltd. - Held that:- AO pointed out contradiction in the averment made by the assessee during the assessment proceedings vis-ŕ-vis statement of the Director Shri Sunil Shah. Further, as admitted by the broker and the sub-broker that Shri M.L.Tandon, Director of the assessee company has never visited their office in respect of the trading in shares / derivatives and that the entire such business takes place mostly through telephonic conversation and that Shri Chopra, employee of the group companies, used to visit the broker / sub-broker only twice or thrice a year. It is hardly believable that an ordinary employee of a company could be provided with such a costly vehicle for the purpose of visiting the broker / sub-broker for carrying out the trading activities. In view of all these facts as a whole, AO held that the car is and has never been used for the Directors of the assessee company wholly and exclusively for the purpose of business of the assessee company and as such the depreciation claimed on Rolls Royce and interest incurred on loan obtained from Kotak Mahindra Bank Limited were disallowed. On similar reasoning, claim of processing charges paid to the bank and expenses incurred on car was also declined. Nothing was brought on record to controvert the findings recorded by the lower authorities to the effect that car was never used for the purpose of business, accordingly we do not find any reason to interfere in the findings of AO which was confirmed by the CIT(A). It is pertinent to mention here that each year is separate and independent, therefore, contention of assessee that assessee-company was having substantial share transaction / income in the subsequent year, the same cannot be considered for allowing depreciation during the year under consideration when it is established that car was not used for the purpose of business during the year under consideration. - Decided against assessee.
|