Messrs. A.K. Shaw, Hooghly V. ITO, Ward - 23(2), Hooghly , Hooghly

ITA 144/KOL/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6643 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 01-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARBANI MUKHERJEE A DDL
• Assessee Lawyers: C GOSWAMI
• Keywords: Fair market value
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH : KOLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM] I.T.A NO. 144/KOL/201 8 ASSESSMENT YEAR : 2014-1 5 MESSRS. A.K. SHAW -VS- ITO, WA RD-23(2), HOOGHLY [PAN: AAKFA 9276 E] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI C.GOSWAMI, CA FOR THE REVENUE : SMT. SARBANI MUKHERJEE, A DDL. CIT DATE OF HEARING : 02.06.2018 DATE OF PRONOUNCEMENT : 27.06.2018 ORDER THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-6, KOLKATA [ IN SHORT THE L D CITA] DATED 22.12.2017 AGAINST THE ORDER PASSED BY THE I.T.O, WARD-23(2), HOOGHLY [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) DATED 28.06.2016 FOR THE ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN TH E BUSINESS OF WINE MERCHANTS. IT HAS TWO PARTNERS. THE ISSUE BEFORE ME IS THE DISALLOWAN CE OF EXPENDITURE CLAIMED OF RS. 3,96,000/- UNDER THE HEAD MANAGERS REMUNERATION PAID TO MR. HIRANMOY GON AND MS. SUDIPTA GON. 2 ITA NO.144/KOL/2018 MESSRS. A.K. SHAW A.YR .2014-15 2 3. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIR CUMSTANCES OF THE CASE, A PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW A S WELL AS CASE LAW CITED, I HOLD AS FOLLOWS. 4. AFTER HEARING RIVAL CONTENTION I FIND THAT THE PREMISES ON WHICH THE AO DISALLOWED THE CLAIM OF THE ASSESSEE IS ERRONEOUS. THE ASSESSE E IS A PARTNERSHIP FIRM. THE AO CONFUSED THE PAYMENT OF SALARY TO MANAGER, WITH THA T OF PAYMENT OF SALARY TO A MANAGING DIRECTOR OR MANAGING PERSONNEL. THE FACT REMAINS THAT THE ASSESSEES TURNOVER HAS INCREASED FROM 1.8 CRORES FOR THE FINANCIAL YEA R 2009-10 TO 4.14 CRORES FOR THE FINANCIAL YEAR 2012-13. THE LD. CIT(A) HAS NOT PASS ED A SPEAKING ORDER. SECTION 40A(2) DOES NOT COME INTO PLAY AS NO COMPARATIVE IN STANCE HAVE BEEN CITED BY THE AO TO COME TO A CONCLUSION THAT THE EXPENDITURE IS EXC ESSIVE OR UNREASONABLE, HAVING REGARD TO THE FAIR MARKET VALUE OF SUCH SERVICES. 5. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED AND THE AO IS DIRECTED TO GRANT DEDUCTION OF MANAGERS REMUNERATION AS CLAIMED BY THE ASSESSEE . 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 27.06.2018 SD/- [ J.SUDHAKAR REDDY] ACCOUNTANT MEMBER DATED : 27.06.2018 SB, SR. PS 3 ITA NO.144/KOL/2018 MESSRS. A.K. SHAW A.YR .2014-15 3 COPY OF THE ORDER FORWARDED TO: 1. MESSRS A.K. SHAW, 667, G.T. ROAD, SERAMPUR, HOOG HLY-712201. 2. ITO, WARD-23(2), A.V. KHADINA MORE, CHINSURAH, D ISTRICT-HOOGHLY-712101. 3..C.I.T.(A)- , KOLKATA 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S