TMI Blog2015 (9) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... nd reasonable opportunities of being heard to the assessee. - Decided in favour of revenue for statistical purposes. Disallowance of salary - CIT(A) deleted addition - Held that:- AO while making the disallowance @ 50% had not given any basis or cogent reasons. The ld. CIT(A) also accepted the contention of the assessee by simply stating that a business is in a running stage and the employees were paid actually and that the quantum of income cannot decide as to whether the entire salary paid was for the purpose of business or not. He also observed that the employees will have to be paid to keep business activities alive. However, nothing was brought on record to substantiate that the payment on account of salary was made for the business purposes in regular course of business. Accordingly, this issue is also set aside to the file of the AO. - Decided in favour of revenue for statistical purposes. - ITA No. 5148/Del/2012 - - - Dated:- 3-7-2015 - D. Manmohan, VP And N. K. Saini, AM, JJ. For the Appellant : Shri Umesh Thaakur, CA For the Respondent : Shri J S Minhas, ACIT DR ORDER Per N. K. Saini, AM This is an appeal by the department against the order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee had paid salary of ₹ 6,24,000/- to three persons and that the payment of salary was excessive in view of meager business activities. He, therefore, disallowed 50% of the salary expenses and made the addition of ₹ 3,12,000/- 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the assessee had furnished following documents to prove the existence of the parties and genuineness of the transactions: (i) Name and address (ii) Share application Form (iii) Permanent Account Number (iv) Detail of Bank Account from where money is paid along with copy of bank statement (v) Copy of Acknowledgement of Income Tax Return (vi) Confirmation from the subscribers (vii) Copy of Balance Sheets of Companies 5. It was further submitted that the assessee furnished the affidavit from all the three companies confirming the transaction which included the distinctive numbers of the shares allotted to those companies and even the copies of share certificates were also furnished. It was also submitted that the order had been passed by the AO with some pre conceived notion in his mind and outrightly by rejecting every docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 7. As regards to the disallowance out of the salary expenses, it was submitted that all the relevant details as required by the AO were submitted during the course of assessment proceedings which were accepted by the AO and it was not the case of the AO that the employees were not actually employed during the year or they were not actually paid the salary and that the AO had not caused any specific doubt on the number of employees working in the company. It was further stated that if the persons were working they were paid for it, therefore, expenses incurred fully for the purpose of business were allowable. 8. The ld. CIT(A) after considering the submissions of the assessee observed that the amounts on account of share capital were received by the assessee independently through the account payee cheque and nothing was apparent from the assessment order that any adverse material existed in the assessment folder for the relevant period. He further observed that it was not the case where any person claimed before the department that the impugned share capital was nothing but bogus introduction by way of accommodation entries. The ld. CIT(A) categorically stated that all the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicants and genuineness of the transaction. Therefore, the AO rightly made the addition u/s 68 of the Act and the ld. CIT(A) was not justified in deleting the impugned addition. As regards to the disallowance out of salary, the ld. DR reiterated the observations made by the AO. 11. In his rival submissions the ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that all the requisite documents and information asked by the AO to prove the identity and creditworthiness of the investors, genuineness of transaction, were furnished before the AO. Therefore, the addition made by the AO was not justified. It was further submitted that the assessee had specifically asked the AO to issue summons u/s 131 of the Act since the assessee could not force the appearance of the subscribers, however, the AO had not taken any action. It was contended that when the assessee discharged the onus cast upon it, the addition made by the AO was not justified and the ld. CIT(A) rightly deleted the same. As regards to the issue relating to the deletion of addition on account of salary expenses, the ld. Counsel for the assessee reiterated the su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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