M/s Vaibhav Yarn Mills Pvt. Ltd., Ludhiana V. DCIT, C-6, Ludhiana

ITA 1593/CHANDI/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5663 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-08-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 21-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Fair market value

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRISANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1593/CHD/2018 / ASSESSMENT YEAR : 2014-15 M/S VAIBHAV YARN MILLS PRIVATE LIMITED, 33-I, SARABHA NAGAR, LUDHIANA VS. THE ITO , WARD-7(1), LUDHIANA ! ' ./ PAN NO: AACCV1461F !#/ APPELLANT %& !# / RESPONDENT '()* /ASSESSEE BY : SH. PARIKSHIT AGGARWAL, CA )* / REVENUE BY : SH. MANJIT SINGH, CIT DR + ,)( -' /DATE OF HEARING : 29.08.2019 ./ )( -' / DATE OF PRONOUNCEMENT : 27.09. 2019 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 13.08.2018 OF THE COMMISSIONER OF INCO ME TAX (APPEALS )- 3, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE ASSESSEE IN THIS APPEAL HAS AGITATED THE DIS ALLOWANCE MADE BY THE ASSESSING OFFICER OF RS. 12 LACS ON ACCOUNT OF EXCESSIVE SALARY PAID TO THE DIRECTOR OF THE COMPANY INVOKING THE PROVIS IONS OF SECTION 40A(2)(B) OF THE INCOME TAX ACT, 1961 (IN SHORT 'TH E ACT'). ITA NO. 1593-CHD/2018- M/S VAIBHAV YARN MILLS PRIVATE LTD., LUDHIANA 2 3. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, HAS SUBMITTED THAT THE ASSESSING OFFICER HAS NOT PROPERLY APPRECIATED THE EVIDENCES ON THE FILE AND SERVICES RENDERED BY THE DIRECTOR NAMELY S MT. RITA BHALLA WHO WAS WORKING FULL TIME FOR THE COMPANY. THE LD. COUN SEL HAS FURTHER POINTED OUT THAT IN THE PREVIOUS ASSESSMENT YEAR, T HE ASSESSING OFFICER HAD ALLOWED RS. 12 LACS AS JUSTIFIABLE SALARY TO SM T. RITU BHALLA, WHEREAS, FOR THE YEAR UNDER CONSIDERATION, SHE HAS RESTRICTED THE SAME TO RS. 6 LACS OUT OF THE SALARY OF RS. 18 LACS PAID TO SMT. RITU BHALLA. THAT THE ABOVE FACTS HAVE NOT BEEN CONSIDERED BY THE AS SESSING OFFICER WHILE MAKING THE IMPUGNED DISALLOWANCE. THAT EVEN T HE LD. CIT(A) HAS NOT PROPERLY APPRECIATED THE WRITTEN SUBMISSIONS F ILED BY THE ASSESSEE IN THIS RESPECT. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, HAS SUBMITTED THAT THE ASSESSEE MAY BE GIVEN AN OPPORT UNITY TO PROPERLY PRESENT ITS CASE BEFORE THE ASSESSING OFFICER AND T O APPRISE THE ASSESSING OFFICER OF THE AFORESAID FACTS AND CIRCUM STANCES AND ALSO ABOUT THE SERVICES RENDERED BY SMT. RITU BHALLA JUS TIFYING THE SALARY OF RS. 18 LACS PAID TO HER WHICH WAS NOT EXCESSIVE OR UNREASONABLE HAVING REGARD TO THE FAIR MARKET VALUE OF THE SERVICES / J OB RENDERED BY SMT. RITU BHALLA. 4. THE LD. DR, ON THE OTHER HAND, HAS RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES. ITA NO. 1593-CHD/2018- M/S VAIBHAV YARN MILLS PRIVATE LTD., LUDHIANA 3 5. CONSIDERING THE ABOVE RIVAL CONTENTIONS OF THE L D. REPRESENTATIVES OF THE PARTIES, WE ARE OF THE VIEW, THAT IN THE LIG HT OF THE ABOVE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSE E, THE MATTER IS REQUIRED TO BE EXAMINED AFRESH BY THE LD. ASSESSIN G OFFICER. IN VIEW OF THIS, THE IMPUGNED ORDER OF THE LD. CIT(A) IS SE T ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FO R ADJUDICATION AFRESH ON THIS ISSUE. THE ASSESSING OFFICER WILL GIVE PROPER OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. NEEDLESS TO SAY THAT THE ASSESSEE WILL PROMPTLY APPEAR BEFORE THE ASSESSING OFFICER, AS AN D WHEN CALLED FOR, AND WILL NOT CONTRIBUTE IN DELAYING THE PROCEEDINGS . 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27.09.2019. SD/- SD/- ( . . / N.K. SAINI) ( ! / SANJAY GARG) '#$ / VICE PRESIDENT %& / JUDICIAL MEMBER DATED : 27.09.2019 .. 1)%(2343( / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. %& !# / THE RESPONDENT 3. + 5( / CIT 4. + 5( ( )/ THE CIT(A) 5. 36 %(7 , - 7 , 89:; / DR, ITAT, CHANDIGARH 6. :< , / GUARD FILE ITA NO. 1593-CHD/2018- M/S VAIBHAV YARN MILLS PRIVATE LTD., LUDHIANA 4 1 + / BY ORDER, = / ASSISTANT REGISTRAR