Bindu Jagbirsingh Rathod, Pune V. Assistant Commissioner of Income-tax,

ITA 2199/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0326 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 22-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMITRA BANERJI
• Keywords: TDS
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE SHRI R. P. TOLANI, JM / ITA NO. 2199/PN/2016 ! '#! / ASSESSMENT YEAR : 2007-08 BINDU JAGBIRSINGH RATHOD SAMEER PLAZA, GP-72 B- BLOCK, SAMBHAJI NAGAR, MIDC, CHINCHWAD, PUNE, PIN-411019 PAN : AKHPR6420Q . /APPELLANT VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-9, PUNE . / RESPONDENT / APPELLANT BY : SHARAD VAZE / RESPONDENT BY : SMT. SUMITRA BANERJI $ / ORDER PER R. P. TOLANI, JM: THIS IS THE ASSESSEES APPEAL RAISING FOLLOWING GROUNDS: 1. LD. CIT(A) HAS ERRED CONFIRMING DISALLOWANCE OF RS . 7,00,000/- PAID TO HER HUSBAND BEING COMMISSION FOR CA RRYING OUT HER TRANSPORT BUSINESS. 2. THE HUSBAND WITH THE HELP OF ASSESSEE DEVELOPED HE R TRANSPORT BUSINESS. THE ASSESSEE DURING THE A.Y. 2007 -08 HAS ACHIEVED TURNOVER OF RS. 1.06 CRORE WHICH WAS LESS THA N RS.40,00,000/- DURING THE A.Y. 2006-07, WAS JUSTIFIED. 2. THE BRIEF FACTS ARE THAT THE ASSESSEE LADY IS ENGAGED IN BUSINESS OF TRANSPORT CONTRACTS CARRIED OUT THROUGH HER HUSBAND SHRI JAGBIR SINGH / DATE OF HEARING : 14.12.2016 / DATE OF PRONOUNCEMENT: 16.12.2016 ITA NO. 2199/PN/2016 2 RATHOD. THE ASSESSEE MADE PAYMENT OF COMMISSION TO HIM A MOUNTING TO RS. 10,63,000/- ON THE PRETEXT OF ACHIEVING TURNOVER OF 10.06 CRS. 3. THE ASSESSING OFFICER HELD THAT THE ALLEGED COMMISSION PAY MENT TO HER HUSBAND AN SPECIFIED RELATIVE WAS UNREASONABLE IN TERM OF SECTION 40A (2)(B) OF THE ACT. COMMISSION TO THE EXTENT OF RS.7,00,000/- W AS DISALLOWED U/S 40(A)(2B). IN THE FIRST APPEAL LD. CIT(A) CONFIRMED THE AC TION OF LD. AO. BEING AGGRIEVED WITH THE SAME, THE ASSESSEE IS IN SECOND APPEAL. 4. THE LD. A.R. FOR THE ASSESSEE CONTENDS THAT HUSBAN D OF THE ASSESSEE, SHRI JAGBIRSINGH RATHOD IS ALSO ASSESSED TO TA X; ON THE DIRECTION OF THE BENCH HIS COMPUTITION OF INCOME PER ASSESSMENT YEA R 2007-08 IS FILED SHOWING INCOME AT RS.2,84,465/-. THE AMOUNT RECEIVED FRO M HIS WIFE IS INCLUDED IN GROSS COMMISSION; NO TDS IS SHOWN TO BE DED UCTED BY ASSESSEE AGAINST THE ALLEGED COMMISSION PAID TO ASSESSEE. IT IMPLIES VIOLATION OF TDS PROVISIONS AS WELL AS APPLICABILITY OF SEC. 40(2) (IA ). THE TOTAL TAX PAID ON HIS ENTIRE INCOME INCLUDING HUGE COMMISSION FROM WIFE IS MEAGER RS. 36,048/-. LD. COUNSEL ADMITS SOME DISCREPANCIES AND PLEADS THAT SUITABLE RELIEF MAY BE GRANTED. 5. LD. D.R. ON THE OTHER HAND VEHEMENTLY CONTENDS THA T THE ASSESSEES EXPLANATION HAS NOT CREDIBILITY AS:- 1) NO TDS WAS DEDUCTED BY THE WIFE WHEREAS ANY COMMIS SION OF PAYMENT IS ELIGIBLE FOR TDS IN THE EVENT OF ENTIRE AMOUNT W HICH HAVE BEEN DISALLOWED U/S 40A(2) (B) ALONG WITH APPLICABILITY OF SEC. 40(A)(AI) OF THE ACT. 2) THE ASSESSEES HUSBAND VERY SMARTLY HAS SHOWN HUGE EXPENDITURE AND AROUND 80% ARISING INCOME HAS BEEN CLAIMED AS EXPEND ITURE WHICH IS UNBELIEVABLE. 3) IT IS CLEAR BECAUSE OF UNREASONABLE PAYMENT BY WIFE MAD E TO HER HUSBAND AND DISALLOWED THE SAME U/S 40A (2)(B) OF THE ACT IS FULLY JUSTIFIED. 4) IT IS CLEAR CASE OF SELF SERVING TAX AVOIDANCE COLORABLE P LAN BETWEEN HUSBAND AND WIFE. THEREFORE NO LENIENCY SHOULD BE FAVORED. ITA NO. 2199/PN/2016 3 6. I HAVE HEARD RIVAL SUBMISSION OF BOTH SIDES AND PERUSED THE MATERIALS ON RECORD. THERE IS MERIT IN THE CONTENTION OF T HE LD. SENIOR D.R. IN MY CONSIDERED VIEW, THE ALLEGED PAYMENT OF COMMISSION P AID BY THE ASSESSEE TO HER HUSBAND WITHOUT DEDUCTING TDS IS UNREA SONABLE IN TERMS OF SECTION 40A(2)(B) OF THE ACT. THE REASONS GIVEN TO THE E FFECT THAT HUSBAND HELPED THE BUSINESS TURNOVER TO GO UP HAS NOT BEEN PR OPERLY SUBSTANTIATED. LD. CIT(A) HAS GIVEN RELIEF HOWEVER SINCE THE BUSINESS HAS BEEN TREATED AS GENUINE AND LOOKING AT THE MAN POWER R EQUIRED BY A LADY TO CONDUCT A RISKY TRANSPORT BUSINESS DESERVE BIT MORE OF RELIEF. 7. IN MY CONSIDERATION, ENDS OF JUSTICE WILL BE MATE IF THE FURTHER RELIEF OF RS.2,00,000/-GIVEN TO THE ASSESSEE RETAINING BALANCE, D ISALLOWED OF RS.5,00,000/-. 8. IN VIEW OF THE ABOVE FACTS, ASSESSEES APPEAL IS PARTLY ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 16.12.2016. SD/- (R. P. TOLANI) / JUDICIAL MEMBER / PUNE ; DATED : 16TH DECEMBER, 2016 SB $%&'()(# COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ! ! ' # $ / THE CIT(A)-6, PUNE 4. THE PR. COMMISSIONER OF INCOME TAX-5, PUNE 5. 6. %&' (()* + ! )* + , , - - .. /DR SMC, ITAT, PUNE; '/0 1 GUARD FILE. // TRUE COPY// $ / BY ORDER, (2 )3 / PRIVATE SECRETARY ! )* + / ITAT, PUNE