9911796707
TMI Blog2018 (9) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... 891/- to Shri Sanjay Palaria HUF out of total Commission paid Rs. 20,58,288/- which is not justified and without going into facts while Commission paid was for marketing and increase of sales and sales has increased from Rs. 328.89 Lac for assessment year 2009-10 to Rs. 501.36 lacs during assessment year 2010-11 due to commission Paid for marketing efforts, hence, allowable expenses." 2. None appeared on behalf of the assessee on the schedule date of hearing in spite of fact that the date of hearing was noted and it was accordingly decided to hear the matter ex-parte qua the assessee after taking into consideration the written submissions and other material on record and hearing the ld. DR. 3. The facts of the case are that during the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of total commission expenses Rs. 20,58,288/- paid on sales by stating that assessee has failed to justify and no details or evidence of any sort could be produced regarding nature of services rendered thereof by these two, on which above sum was claimed to have been paid as commission and consequently commission to Sanjay Palaria HUF and Smt. Ginni Devi Palaria payments are held to be bogus expenditures while in fact detailed reply and detail and documents asked by learned assessing officer were submitted and bills, vouchers and chart for sales on which commission paid were produced before her and income tax returns of Smt. Ginni Devi Palaria and Sanjay. Palaria HUF were also submitted in which commission income paid by assessee were in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40A(2)(b) viz. Sanjay Palaria HUF, Sh. Sanjay Palaria, Smt. Ginnidevi Palaria and Smt. Deepika Palaria. The commission of Rs. 6,89.891/- paid to Sanjay Palaria HUF and that of Rs. 3,39,253 paid to Smt. Ginnidevi Palaria has been disallowed by the AO since no justification thereof was given by the assessee during assessment proceedings. In the appellate proceedings the assessee has claimed that it had submitted details and documents including bills, vouchers etc. as well as ITRs of the said persons showing that due TDS was deducted on commission payments made to them and due taxes payable by them were paid. It was further contended that the assessee had saved payment of salary of Rs. 24,00,000 which was being made to Sh. Sanjay Palaria in ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... most 92 years of age during the years under consideration, which renders her capacity to provide active services doubtful. Moreover, it is obvious that the assessee has taken advantage of tax arbitrage since it falls in the highest tax bracket and Smt. Ginnidevi does not. Considering the assessee's failure to produce any evidence regarding actual services being rendered by her, coupled with her advanced age and the fact that the assessee has taken advantage of tax arbitrage as stated above, the disallowance of commission of Rs. 3,39,253/- paid to her, is hereby upheld. 4.5 Further, on examining the return filed by Sanjay Palaria HUF, I find that the HUF, has shown only the commission income of Rs. 6,89,891/- received from the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived by the karta of HUF, the remuneration so received was his individual income. Similarly, it was held in the case of CIT v D.C. Shah (1969) 73 ITR 692 (SC) that where remuneration earned by karta of HUF was not earned on account of any detriment to joint family assets, it was assessable as income of the individual. In the case of the appellant also there is no detriment to the assets of HUF in earning such commission income. In fact the HUF has not deployed any asset towards earning commission income. It has further been noted that the resultant tax paid by HUF is nominal and on the other hand substantial tax has been saved by the appellant, who falls in the highest tax bracket. The tax saved on this transaction with HUF is around Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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