Sree Kodi Associates, Madurai V. ITO Ward III(5), Madurai

ITA 2255/CHNY/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6715 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 30-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI . . . , , & BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.2255/CHNY/2018 ' ' /ASSESSMENT YEAR: 2006-07 M/S.SREE KODI ASSOCIATES, 214, FIRST FLOOR, NAICKER NEW STREET, MADURAI-625 001. VS. THE INCOME TAX OFFICER, WARD-III(5), MADURAI. [PAN: ABIFS 8893 A ] ( * /APPELLANT) ( +,* /RESPONDENT) * - / APPELLANT BY : NONE +,* - /RESPONDENT BY : MR. AR.V.SREENIVASAN, JCIT - /DATE OF HEARING : 26.02.2019 - /DATE OF PRONOUNCEMENT : 28.02.2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED A GAINST THE ORDER OF THE LEARNED COMMISSION OF INCOME TAX (APPEALS)-1, M ADURAI, DATED 17.05.2018 FOR THE AY 2006-07. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLA NT IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRADING IN THE PHAR MACEUTICALS. THE RETURN OF INCOME FOR THE AY 2006-07 WAS FILED. THE ASSESSMENT WAS ITA NO.2255/CHNY/2018 :- 2 -: COMPLETED U/S.143(3) OF THE ACT VIDE ORDER DATED 26 .11.2008 AT A TOTAL INCOME OF RS.1,29,380/-. SUBSEQUENTLY, THE AO HAD RECEIVED INFORMATION FROM AUDIT PARTY THAT A SUM OF RS.7,86,336/- WAS DE BITED TO P&L A/C TOWARDS COMMISSION, THE ASSESSEE HAD NOT DEDUCTED T DS THEREON AS REQUIRED U/S.194H OF THE IT ACT. THEREFORE, A NOTIC E U/S.148 WAS ISSUED ON 28.03.2013 TO THE APPELLANT AND AGAINST THE SAID R ETURN OF INCOME ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS.4, 30,160/- AFTER MAKING DISALLOWANCE OF RS.3,00,782/- U/S.40(A)(IA). 3. BEING AGGRIEVED, AN APPEAL FILED BY THE APPELLAN T BEFORE THE LD.CIT(A) CONTENDING THAT THE PROVISIONS OF SEC.40( A)(IA) CANNOT BE INVOKED IN THE PRESENT CASE AS THE COMMISSION WAS P AID TO THE EMPLOYEES AND THE AMOUNT OF SALARY INCLUSIVE OF COMMISSION WA S PAID TO EACH EMPLOYEE DOES NOT EXCEED THE MINIMUM, WHICH IS NOT CHARGEABLE TO TAX. HOWEVER, THE LD.CIT(A) HAS DISMISSED THE APPEAL BY REJECTING THE CONTENTION OF THE APPELLANT. 4. BEING AGGRIEVED, THE APPELLANT IS IN APPEAL BEFO RE US, ON THE DATE OF HEARING NONE APPEARED ON BEHALF OF THE APPELLANT. ON THE OTHER HAND, LD.DR PLACED RELIANCE ON THE ORDERS OF THE LOWER AU THORITIES. 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIALS ON RECORD. THE TERM SALARY HAD BEEN DEFINED U/S.17 TO INCLUD E ANY COMMISSION/BONUS PAID TO EMPLOYEES. THE COMMISSION PAID TO EMPLOYEES ITA NO.2255/CHNY/2018 :- 3 -: PARTAKES THE CHARACTER OF THE SALARY AND THEREFORE, THE APPLICABLE PROVISION OF TDS IS ONLY SEC.192 NOT SEC.194H AND T HEREFORE, WE FIND MERIT IN THE SUBMISSIONS OF THE APPELLANT. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THE 28 TH FEBRUARY, 2019 IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) ( INTURI RAMA RAO ) /ACCOUNTANT MEMBER /CHENNAI, 3 /DATED: 28 TH FEBRUARY, 2019. TLN - +45 65 /COPY TO: 1. * /APPELLANT 4. 7 /CIT 2. +,* /RESPONDENT 5. 5 + /DR 3. 7 ( ) /CIT(A) 6. ' /GF