Manasi sales Pvt. ltd., Pune V. ITO Wd. 11(1), Pune

ITA 1096/PUN/2009

• Counselvise Citation: 109624514 RSA 2009
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 15-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 1096/PN/2009 : A.Y. 2005-06 MANASI SALES PVT. LTD., 42/2-B MAHARASHTRA HSG. SOCIETY PLOT NO. 23, PUNE SATARA ROAD, PUNE-411 023 PAN AABCM 1826 C APPELLANT VS. I.T.O. WARD 11(1) PUNE RESPONDENT APPELLANT BY: SHRI M.K. KULKARNI RESPONDENT BY: SHRI SANJAY SINGH ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDERS OF THE CIT(A)-I PUNE DATED 8 TH APRIL 2009 FOR A.Y. 2005-06 CONFIRMING THE ADDITION OF RS. 2,09,242/- P AID AS COMMISSION AND RS. 6,00,000/- AS SALARY TO THE DIRE CTORS OF THE ASSESSEE COMPANY. 2. THE UNDISPUTED FACTS ARE THAT THE DIRECTORS ARE PAID SALARY IN LIEU OF SERVICES RENDERED BY THEM WHICH H AS BEEN INCREASED FROM RS. 4,68,000/- TO RS. 6,00,000/- IN THE ASSESSMENT YEAR UNDER CONSIDERATION. IT IS ALSO UNDISPUTED THAT NO PAYMENT BY WAY OF COMMISSION WHI CH IS LINKED TO THE TURNOVER HAS BEEN MADE IN THE IMME DIATELY PRECEDING ASSESSMENT YEAR THOUGH THERE WAS INCREASE IN 2 ITA NO. 1096/PN/2009 MANASI SALES A.Y. 2005-06 THE TOTAL TURNOVER OF THE ASSESSEE AS COMPARED TO E ARLIER YEARS. NOTHING HAS BEEN BROUGHT ON RECORD TO JUSTI FY THE PAYMENT OF COMMISSION TO THE DIRECTORS. IT IS ALSO UNDISPUTED THAT THE DIRECTORS ARE COVERED UNDER THE PROVISIONS OF SECTION 40A(2)(B), SO THE QUESTION OF REASONABLENESS IS OBVIOUS. THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE COMMISSION PAID TO THE DIRECTORS F OR THE PURPOSE OF BUSINESS BY WAY OF COGENT EVIDENCE. TAK ING ALL THESE FACTS AND CIRCUMSTANCES INTO CONSIDERATION, T HE DISALLOWANCE MADE OF RS. 2,09,242/- BY THE ASSESSIN G OFFICER AND CONFIRMED BY THE CIT(A) NEEDS NO INTERF ERENCE. 3. AS REGARDS THE DISALLOWANCE OF SALARY PAID TO MR S. DABEER AND MRS. GOGATE WHO HAPPENED TO BE THE WIVES OF THE DIRECTORS OF THE ASSESSEE, IT WAS FOUND FROM TH E RECORD THAT THE ASSESSEE COULD NOT BRING ON RECORD TO SUGG EST THAT THE ABOVE SAID TWO PERSONS WERE ASSOCIATED IN DAY T O DAY FUNCTIONING OF THE ASSESSEE-COMPANY. THE CLAIM OF THE ASSESSEE OF RENDERING SERVICES BY THESE LADIES BY W AY OF ATTENDING CALLS ETC. WAS NOT SUBSTANTIATED SINCE BO TH THE PERSONS ARE COVERED UNDER CLAUSE (B) OF SUB-SECTION (2) OF SECTION 40A OF THE ACT. THE REASONABLENESS OF THE P AYMENT BY WAY OF COGENT REASONING AND EVIDENCE HAS NOT BEE N DISCHARGED BY THE ASSESSEE. IN CASE, THE ASSESSEE HAS SATISFIED THE CONDITIONS OF RENDERING THE SERVICES TO THE ASSESSEE-COMPANY THE EXPENDITURE IN QUESTION COULD HAVE BEEN JUSTIFIED. IN ABSENCE OF ANY COGENT EVIDENCE BROUGHT ON RECORD WITH REGARDS TO RENDERING OF SERVICES BY THE TWO LADIES, THE DISALLOWANCE IN QUESTION NEEDS NO INTER FERENCE. WE UPHOLD THE SAME. 3 ITA NO. 1096/PN/2009 MANASI SALES A.Y. 2005-06 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST 2011. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER SHAILENDRA KUMAR YADAV JUDICIAL MEMBER PUNE DATED THE 26 TH AUGUST 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- I PUNE 4. THE CIT I PUNE 5. THE D.R, ITAT PUNE BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES, PUNE.