M/s. Samu Electronics, Kumbakonam V. DCIT, Kumbakonam

ITA 1582/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58131 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 13-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 22-09-2011
• Court: TRIBUNAL
• Department Lawyers: DR YOGESH KAMATH
• Assessee Lawyers: S SRIDHAR
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.1582/MDS/2011 (ASSESSMENT YEAR : 2 006-07) M/S. SAMU ELECTRONICS, NO.12, NAGESWARAN WEST STREET, KUMBAKONAM PAN:AAWFS3457R VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-I, KUMBAKONAM. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.SRIDHAR RESPONDENT BY : DR. YOG ESH KAMATH, DR DATE OF HEARING : 13 TH MARCH, 2012 DATE OF PRONOUNCEMENT : 23 RD MARCH, 2012 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE ASSESSEE RELATING TO THE ASSESSMENT YEAR 2006-07 IMPUGNING ORDER DATED 19.07.2011 PASSED BY THE CIT(A), TIRUCHIRAPALLI. 2. THE ASSESSEE FIRM IS A DEALER IN ELECTRICAL AP PLIANCES AND FURNITURE. THE ASSESSEE HAD FILED RETURN OF INC OME FOR THE ASSESSMENT YEAR 2006-07 ON 22.10.2006 ADMITTING TOT AL INCOME OF RS. 1,29,710/-. THE RETURN WAS TAKEN UP F OR SCRUTINY. SURVEY UNDER SECTION 133A OF THE INCOME TAX ACT ITA NO.1582/MDS/2011 2 (HEREINAFTER REFERRED TO AS THE ACT ) WAS CONDUC TED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 27.07.2005. DU RING THE COURSE OF SURVEY, THE ASSESSING OFFICER NOTICED T HAT THE LADY WORKING PARTNERS WERE NOT PRESENT AT THE PREMISES. HE ALSO OBSERVED THAT NO BILLS, VOUCHERS ETC. WERE BEING PR EPARED BY THEM. THE ASSESSING OFFICER DISALLOWED THE SALARY O F RS.60,000/- EACH TO THE TWO LADY WORKING PARTNERS. APART FROM OTHER SMALL ADDITIONS, THE ASSESSING OFFICER MADE A N ADDITION OF RS.1,20,000/- ON ACCOUNT OF DISALLOWANCE OF SALA RY TO THE LADY WORKING PARTNERS. 3. AGGRIEVED BY THE ASSESSMENT ORDER DATED 24.12.2 008, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE ONLY GROUND WHICH THE ASSESSEE AGITATED BEFORE THE CIT(A ) WAS DISALLOWANCE OF SALARY PAID TO LADY WORKING PARTNER S. THE LEARNED CIT(A) HELD THAT THE ASSESSING OFFICERS F INDINGS ARE BASED ON ENQUIRY DURING THE COURSE OF SURVEY UNDER SECTION 133A AT THE PREMISES. THE ASSESSEE COULD NOT REPLY CONVINCINGLY TO THE QUESTIONS RAISED BY THE ASSESSI NG OFFICER REGARDING ABSENCE OF LADY WORKING PARTNERS. HENCE, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. ITA NO.1582/MDS/2011 3 4. THE ASSESSEE IS IN APPEAL BEFORE US IMPUGNING SH ORT POINT OF DISALLOWANCE OF SALARY OF LADY WORKING PAR TNERS BY THE LEARNED CIT(A). SHRI S.SRIDHAR, LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITS THAT IT IS N OT EXPECTED THAT ALL THE WORKING PARTNERS SHOULD BE PRESENT ON ALL THE DAYS THROUGHOUT THE WORKING HOURS IN THE BUSINESS PREMIS ES. LADY WORKING PARTNERS ARE WELL VERSED IN TRADING OF HOME APPLIANCES AND ARE MORE FOCUSED IN ATTENDING CUSTOM ERS AND EXPLAINING THEM ABOUT THE PRODUCTS AND ARE THUS ENG AGED IN THE BUSINESS ACTIVITIES OF THE FIRM. 5. ON THE OTHER HAND, THE LEARNED D.R. SUPPORTED TH E ORDERS OF THE CIT(A) AND THE ASSESSING OFFICER. 6. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES. WE ARE OF THE OPINION THAT THE ARGUMENT RAISED BY THE LEAR NED A.R. HAS FORCE. IT IS NOT EXPECTED THAT ALL THE WORKING PARTNERS SHOULD BE PRESENT ALL THE TIME IN THE BUSINESS PREM ISES. IN VIEW OF THE ABOVE, THE SALARY PAID TO THE LADY WORK ING PARTNERS I.E. RS.60,000/- EACH TOTALLING RS.1,20,000/- DESER VES TO BE ALLOWED AS EXPENDITURE. WE THEREFORE SET ASIDE THE ORDER ITA NO.1582/MDS/2011 4 PASSED BY THE LEARNED CIT(A) AND ALLOW THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD MARCH, 2012. SD/- SD/- ( ABRAHAM P.GEORGE) ( VIKAS AWASTHY ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 23 RD MARCH, 2012. SOMU COPY TO: (1) APPELLANT ( 4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.