ITO, New Delhi V. Mrs. Sushma Kumari, New Delhi

ITA 1407/DEL/2012

• Counselvise Citation: 140720114 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 25-02-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KEYUR PATEL
• Assessee Lawyers: RAJ KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND SHRI A. D. JAIN, JUDICIAL MEMBER ITA NO. 1407/DEL/2012 (ASSESSMENT YEAR: 2005 -06) INCOME TAX OFFICER, WARD-25(4), NEW DELHI VS MRS. SUSHMA KUMARI C/O M/S RAJ KUMAR & ASSOCIATES, CHARTERED ACCOUNTANTS, 4435/7, ANSARI ROAD, DARYAGANJ, NEW DELHI-110002 (APPELLANT) (RESPONDENT) C. O. NO. 163/DEL/2012 (ASSESSMENT YEAR: 2005 -06) MRS. SUSHMA KUMARI C/O M/S RAJ KUMAR & ASSOCIATES, CHARTERED ACCOUNTANTS, 4435/7, ANSARI ROAD, DARYAGANJ, NEW DELHI-110002 VS INCOME TAX OFFICER, WARD-25(4), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. ABHPK5394B ASSESSEE BY: SHRI RAJ KUMAR REVENUE BY: SHRI KEYUR PATEL DATE OF HEARING 25.2.2014 DATE OF PRONOUNCEMENT 26.2.2014 ORDER PER R. S. SYAL, AM: THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 11. 1.2012 IN RELATION TO THE ASSESSMENT YEAR 2005-06. 2. THE ONLY GROUND RAISED BY THE REVENUE IN ITS APP EAL IS AGAINST THE DELETION OF ADDITION OF RS. 10,55,342/-. ITA NO. 1407/DEL/2012 & CO 163/DEL/2012 SUSHMA K UMARI 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE HOLDS AGENCY OF POST OFFICE. HER MAJOR SOURCE OF INCOME I S COMMISSION DERIVED AS AGENT FROM POST OFFICE. IN THE RETURN FI LED, THE ASSESSEE CLAIMED DEDUCTION FOR A SUM OF RS. 10,55,342/- ON A CCOUNT OF COMMISSION TO HER CUSTOMERS. AFTER INITIATING PROCE EDINGS BY WAY OF NOTICE U/S 148, THE ASSESSING OFFICER HELD THAT THE INCURRING OF SUCH EXPENDITURE WAS PROHIBITED BY LAW AND HENCE DISALLO WANCE WAS ATTRACTED IN TERMS OF EXPLANATION TO SEC. 37(1). TH E LD. CIT(A) ORDERED FOR THE DELETION OF ADDITION. 4. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD, IT IS NOTICED THAT THE ASSESSIN G OFFICER DISALLOWED THE CLAIM OF COMMISSION ONLY UNDER EXPLANATION TO S EC. 37(1). IF WE TURN TO THIS EXPLANATION IT COMES OUT THAT: ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FO R THE PURPOSE OF BUSINESS OF PROFESSION AND NO DEDUCTION OR ALLOWANC E SHALL BE MADE IN RESPECT OF SUCH EXPENDITURE . TURNING TO THE FACTS OF THE INSTANT CASE, WE FIND THAT THE ASSESSEE RECEIVED COMMISSION FROM POST OFFICE AND PASSED OVER A PART OF THE SAME TO HER CUSTOMERS. W E ARE UNABLE TO FIND ANY VIOLATION OF LAW BY PASSING OVER COMMISSION TO ITS CUSTOMERS. ON THE CONTRARY, SUCH EXPENDITURE WAS INCURRED WITH A VIEW TO PROMOTE HER BUSINESS. ON A SPECIFIC QUERY, THE LD. DR COULD NO T POINT OUT ANY INFRACTION OF ANY LAW RESULTING FROM PARTING WITH A PART OF COMMISSION RECEIVED FROM POST OFFICE. WE, THEREFORE, DO NOT FI ND ANY SUBSTANCE IN ITA NO. 1407/DEL/2012 & CO 163/DEL/2012 SUSHMA K UMARI 3 THE REASONING ADOPTED BY THE ASSESSING OFFICER FOR MAKING THIS DISALLOWANCE. APART FROM THAT, THE ASSESSING OFFICE R HAS GIVEN NO REASON AS TO WHY SUCH EXPENDITURE IS NOT DEDUCTIBLE . WE, THEREFORE, UPHOLD THE IMPUGNED ORDER IN DELETING THE ADDITION. 5. THE LD. AR DID NOT PRESS CROSS OBJECTION FILED O N BEHALF OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND CROSS OBJECTION OF THE ASSESSEE IS ALSO DISMISSED AS NOT PRESSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/02/2014. SD/- SD/- (A. D. JAIN) (R. S. S YAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26/02/2014 *SUBODH* COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT ASSISTANT REGISTRAR