TMI Blog2019 (12) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer during assessment, therefore, there is force in the contention of the ld. Counsel for the assessee that the matter may be remanded back to the Assessing Officer for consideration and fresh orders. Appeal allowed for statistical purposes. - ITA No. 3103/Del/2014 - - - Dated:- 3-12-2019 - SHRI H.S. SIDHU, JUDICIAL MEMBER For the Appellant : Shri K. Sampath, Advocate For the Respondent : Shri Pradeep Singh Gautam, Sr. DR ORDER This appeal filed by the assessee against the impugned order dated 27.02.2014 passed by the Ld. CIT(Appeals)-xxii, New Delhi in relation to assessment year 2007-08 on the following grounds:- On the facts and in the circumstances of the case and in law the authorities below erred in making the following additions to the returned income:- 1. ₹ 10,68,968/- being the amount of reimbursement of interst u/s. 40A(ia) of the Act; 2. ₹ 7,94,786/- on account of wagers paid u/s. 40a(ia) of the act; 3. ₹ 80,000/- being the amount of remuneration paid by invoking provision of section 40(A)(2) of the Act; 4. ₹ 26,000/- by apply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following additions to the returned income:- I. ₹ 10,68,968/- being the amount of reimbursement of interest u/s 40a(ia) of the Act; 2. ₹ 7,94,786/- on account of wages paid u/s 40a(ia) of the Act; 3. ₹ 80,000/- being the amount of remuneration paid by invoking provision of Section 40 (A) (2) of the Act; 4. ₹ 26,000/- by applying provision of Section 40A (3) of the Act; 5. ₹ 19424/- and ₹ 33,947/- under the heads 'vehicle running expenses' and 'telephone expenses' respectively on estimate basis treating the same as personal in nature. All the above actions being arbitrary, erroneous and unjust must be quashed with directions for appropriate relief. 2.2 The Appellant Shri Sunil Sethi is a sub-agent of ICICI Bank for provision of vehicle loans. He is also related to Upper India Trading Co. [Delhi] Pvt. Ltd. ('UITCDPL') which is the sole-selling agent for Hero Honda Motorcycles in Delhi as its Director. The Appellant has an understanding with (UITCDPL) that he would render comprehensive assistance and support in the sale of motorcycles by it including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Act yet it is also equally true that the provisions of the Act, as they are, are required to be applied notwithstanding existence of any agreement or not. Proviso to Section 201 (1) provides as under: Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a [payee] shall not be deemed to be an assessee in default in respect of such tax if such [payee] - (i) has furnished his return of income under section 139; (ii) has taken into account such sum for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income; and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed:] 3.3 Appellant seeks leave to submit a copy of the acknowledgement of the Income Tax Return as filed by for the year UITCDPL. In terms of the proviso, therefore, Appellant deserves relief but connected after verification of the connected tects. Pleaded accordingly. 4.1 Ground No. 2 is against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmed by the Id. CIT (Appeals) is thus palpably erroneous and merits to be annulled. 5. Ground Nos. 3 concerns disallowance u/s 40 (A) (2) of the Act. The Appellant had paid remuneration of Rs.l,60,OOO/- to his daughter Chandini who was a Sales Executive in the organization of the Appellant. Appellant himself had other business activities including that of being a Director in UITCDPL and so required managerial support. The Assessing Officer was of the view that there was an extra commercial element in the payment made to the daughter. He compared the remuneration paid to her with those paid to the staff otherwise employed by the Appellant and opined that 50% of the salary paid to her was required to be disallowed. The full discussion on this point as done by the Assessing Officer is contained on page Nos. 7, 8, 9 10 of the impugned CIT (Appeals) 's order. In appeal the Id. CIT (Appeal) confirmed the addition as made by the Assessing Officer in the case of Chandini. t is respectfully submitted that the Id. ClT (Appeals) fell into an error in comparing the remuneration paid for 12 months service to Chandini with the remuneration of others paid for services rendered sp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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