SHAILA MOHAN GANACHARI, MUMBAI V. ITO WD 23(3)(2), MUMBAI

ITA 237/MUM/2009

• Counselvise Citation: 23719914 RSA 2009
• Duration Of Justice: 2 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 12-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARTHA SARATHI NAIK
• Assessee Lawyers: KAPIL K JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 237/MUM./2009 (ASSESSMENT YEAR : 2004-05 ) MRS. SHAILA MOHAN GANACHARI A-312, SUKHDAS CHS ARUNODAY NAGAR, MULUND (E) MUMBAI 400 031 PAN ADWPG8017C .. APPELLANT V/S INCOME TAX OFFICER WARD-23(3)(2) PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA, MUMBAI 400 051 .... RESPONDENT ASSESSEE BY : MR. KAPIL K. JAIN REVENUE BY : MR. PARTHASARATHI NAIK DATE OF HEARING 21.12.2011 DATE OF ORDER 29.12.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE ASSESSEE, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 17 TH NOVEMBER 2008, PASSED BY THE COMMISSIONER (APPEALS)-XXIII, MUMBAI, FOR ASSESSMENT YEAR 2004-0 5, ON THE FOLLOWING GROUNDS:- MRS. SHAILA MOHAN GANACHARI ITA NO.237/MUM./2009 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) IS NOT JUSTIFIED IN CONFIRMING T HE DISALLOWANCE OF THE ENTIRE CONSULTANCY CHARGES OF ` 2,15,000 DEBITED TO THE PROFIT AND LOSS ACCOUNT AND FAILED TO APPRECIATE THAT THE SAME HAS BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF AGENCY BU SINESS. 2. THE ASSESSEE IS AN AGENT IN LIFE INSURANCE CORPORAT ION. THE ISSUE BEFORE US IS THE DISALLOWANCE OF A CLAIM OF DEDUCTI ON MADE BY HER OF CONSULTANCY CHARGES OF ` 2,15,000 PAID TO HER HUSBAND MR. MOHAN GANACHARY. THE ASSESSING OFFICER DISALLOWED THE PAY MENT BY INVOKING PROVISIONS OF SECTION 40A(2B) OF THE ACT. 3. THE COMMISSIONER (APPEALS) CONFIRMED THE DISALLOWAN CE. 4. BEFORE US, THE LEARNED COUNSEL, MR. KAPIL K. JAIN, REPRESENTING THE ASSESSEE, SUBMITTED THAT THE HUSBAND OF THE ASSESSE E IS AN AGENT FOR MEDICAL INSURANCE AND HAS HIS OWN CONTACTS AND IS A LSO AN INCOME TAX ASSESSEE AND THAT THIS INCOME HAS BEEN DECLARED BY HIM AND THE TAX PAID ON THE SAME. HE SUBMITTED THAT FOR THE PREVIOUS YEAR A S WELL AS IN THE SUBSEQUENT YEAR, SIMILAR PAYMENTS HAVE BEEN MADE AN D THERE IS NO DISALLOWANCE BY THE REVENUE. HE PRAYED FOR RELIEF. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE, MR. PARTHA SARATHI NAIK, REPRESENTING THE REVENUE, ON THE OTHER HAND, RELIED ON THE IMPUGNED ORDER PASSED BY THE COMMISSIONER (APPEALS) AS WELL AS THE ORDER PASSED BY THE ASSESSING OFFICER. HE SUBMITTED THAT THE GENUINENES S OF THE PAYMENT IS IN DOUBT AND, HENCE, DISALLOWANCE SHOULD BE UPHELD. 6. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON A PERUSAL OF THE P APERS ON RECORD, WE FIND THAT THE HUSBAND OF THE ASSESSEE MR. MOHAN GANACHAR Y, HAS OFFERED THE INCOME IN QUESTION TO TAX IN HIS HANDS AND THE REVE NUE HAS TAXED THE SAME. IT IS ALSO NOTICED THAT SIMILAR PAYMENTS WERE MADE IN THE ASSESSMENT YEAR 2003-04 AS WELL AS IN THE ASSESSMENT YEAR 2005-06 A ND THE REVENUE HAS NOT MADE ANY DISALLOWANCES. UNDER THESE CIRCUMSTANC ES, IN VIEW OF THE MRS. SHAILA MOHAN GANACHARI ITA NO.237/MUM./2009 3 SMALLNESS OF THE AMOUNT AND ALSO IN VIEW OF THE FAC T THAT BOTH THE PARTIES SHOULD NOT BE MADE TO PAY TAX ON THE SAME AMOUNT, W E ALLOW THIS CLAIM OF THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.12.2011 SD/- B.R. MITTAL JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 29.12.2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, E BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI