Alpha Enterprises, Hubli V. JCIT, Hubli

ITA 549/BANG/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9369 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 28-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P DIVAHAR
• Assessee Lawyers: H N KHINCHA

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL BANGALORE BENCH SMC, BANGALORE BEFORE SHRI A.K.GARODIA, ACCOUNANT MEMBER ITA NO. 549(BANG) 2016 (ASSESSMENT YEAR : 2010 11) ALPHA ENTERPRISES, KCC & 1 BUILDING, JC NAGAR, HUBBALLI PAN : AAJFA1169M APPELLANT VS THE JCIT, RANGE 1, HUBBALLI RESPONDENT ASSESSEE BY : SHRI H. N. KHINCHA, C. A. REVENUE BY : SHRI P. DIVAHAR, JCIT DATE OF HEARING : 08-09-2016 DATE OF PRONOUNCEMENT : 16-09-2016 O R D E R PER A. K. GARODIA, A.M.: THIS APPEAL IS FILED BY THE ASSESSEE. THIS IS DIR ECTED AGAINST THE ORDER OF LEARNED CIT (A) - HUBALI DATED 30.12.2015 FOR A. Y. 2010 11. 2. THE ASSESSEE HAS RAISED AS MANY AS 5 GROUNDS BU T THE ONLY GRIEVANCE OF THE ASSESSEE IS ABOUT GRANTING DEDUCTION OF ONLY 50% OF COMMISSION PAYMENT AND ADHOC DISALLOWANCE OF RS. 50,000/- OUT OF VARIOUS EXPENSES. 3. IT WAS SUBMITTED BY THE LEARNED AR OF THE ASSESS EE THAT THE A.O. DISALLOWED TOTAL COMMISSION PAYMENT OF RS. 11,54,90 9/- TO THREE PERSONS BY HOLDING THAT THESE PAYMENTS ARE NOT FOR BUSINESS PU RPOSES AND LEARNED CIT (A) UPHELD SUCH DISALLOWANCE TO THE EXTENT OF 50% B Y HOLDING THAT THE EXPENSES ARE EXCESSIVE. HE SUBMITTED THAT SECTION 4 0A (2B) IS NOT APPLICABLE TO THESE PARTIES AND HENCE THE DISALLOWANCE CONFIRM ED BY CIT (A) TO THE EXTENT OF 50% IS NOT JUSTIFIED. REGARDING DISALLOWA NCE OF RS. 50,000/- OUT OF ITA NO. 1426(BANG) 2016 2 VARIOUS EXPENSES, HE DID NOT MAKE ANY ARGUMENT. LE ARNED DR OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BEL OW. 4. I HAVE CONSIDERED THE FACTS OF THE CASE AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. I FIND FORCE IN THE SUBMISSI ONS OF THE LEARNED AR OF THE ASSESSEE ABOUT THE FIRST ISSUE I.E. 50% DISALLOWANC E OUT OF COMMISSION EXPENSES BECAUSE THIS IS NOT THE CASE OF THE REVENU E THAT SECTION 40A (2B() IS APPLICABLE IN RESPECT OF THESE PAYMENTS. HAVING ALL OWED DEDUCTION FOR 50% OF THE EXPENSES, LEARNED CIT (A) HAS NOT INDICATED ANY VALID BASIS FOR UPHOLDING THE BALANCE DISALLOWANCE. HENCE, I DELETE THE BALANCE DISALLOWANCE OUT OF COMMISSION EXPENSES. REGARDING THE SECOND ISSUE, I FIND THAT THE DISALL OWANCE OF RS. 50,000/- WAS MADE BY THE A.O. MAINLY ON ACCOUNT OF PERSONAL USE OF VEHICLES AND TELEPHONES. THIS IS NOT SHOWN BY THE A SSESSEE THAT THE PARTNERS WERE HAVING PERSONAL VEHICLES AND TELEPHONES FOR PE RSONAL USE. HENCE PERSONAL USE OF VEHICLES AND TELEPHONES CANNOT BE R ULED OUT. HENCE, ON THIS ISSUE, I FIND NO REASON TO INTERFERE IN THE ORDER O F CIT (A). 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. (A.K. GARODIA) ACCOUNTANT MEMBER BANGALORE: D A T E D : 16.09.2016 AM* ITA NO. 1426(BANG) 2016 3 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE 1. DATE OF DICTATION .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P. S. .. 4 DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE ORDER COME S BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOE S TO THE DISPATCH SECTION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DISPATCH OF ORDER