ITO, Coimbatore V. Shri Eapen Nainan, Coimbatore

ITA 686/CHNY/2002

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52023 (ITAT-CHENNAI)
• Duration Of Justice: 9 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-11-2011
• Assessment Year: 1995-1996
• Appeal Filed On: 02-05-2002
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Tax effect
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NOS. 686, 687, 688 & 689/MDS/2002 ASSESSMENT YEARS : 1995-96, 1996-97, 1997-98 & 1998 -99 THE INCOME-TAX OFFICER, SALARY WARD-I(2), COIMBATORE. V. SHRI EAPEN NAINAN, SINGER INDIA LTD., 68, OPPANAKARA STREET, COIMBATORE-1. [PAN/GIR NO.: PZ-8654 ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB, SR. DR RESPONDENT BY : NONE DATE OF HEARING : 08-11-2011 DATE OF PRONOUNCEMENT : 14-11-2011 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THESE ARE APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(AP PEALS)-II, COIMBATORE IN I.T. APPEAL NOS. 308, 551, 552 & 553-C/01-02 DATED 01-03 -2002 FOR THE ASSESSMENT YEARS 1995-96 TO 1998-99. 2. SHRI SHAJI P. JACOB, LEARNED SR. DR REPRESENTED ON BEHALF OF THE REVENUE AND NONE REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LEARNED DR THAT ORIGINAL LY THESE APPEALS HAD BEEN DISPOSED OF BY THE CO-ORDINATE BENCH OF THIS TRIBUN AL VIDE ORDER DATED 03-04-2003. IT WAS THE SUBMISSION THAT THESE APPEALS HAD BEEN D ISPOSED OF ON THE GROUND OF I.T.A. NOS. 686-689/MDS/2002 2 LOW TAX EFFECT. IT WAS THE SUBMISSION THAT THE APP EALS FILED BY THE REVENUE U/S 260A OF THE INCOME TAX ACT, 1961 IN TAX CASE (APPEA L) NOS. 920 TO 923 OF 2004 CAME TO BE DISPOSED OF BY THE HON'BLE JURISDICTIONA L HIGH COURT OF MADRAS VIDE AN ORDER DATED 01-02-2010 RESTORING THE APPEALS TO THE FILE OF THE TRIBUNAL FOR RE- ADJUDICATION ON MERITS. IT WAS THE SUBMISSION THAT THERE WAS ONLY ONE ISSUE IN ALL THE APPEALS. IT WAS THE SUBMISSION THAT THE ASSESS EE IS AN INDIVIDUAL WHO WAS WORKING AS THE SHOP MANAGER OF M/S. SINGER INDIA LT D. THE ASSESSEE WAS RECEIVING COMMISSION ON THE SALES ALSO. IT WAS THE SUBMISSIO N THAT THE ASSESSEE HAD CLAIMED 40% OF THE COMMISSION RECEIVED TOWARDS EXPENSES. I T WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD HELD THAT THE COMMISSION RECE IVED WAS NOTHING BUT SALARY AND CONSEQUENTLY DENIED THE ASSESSEE THE DEDUCTION OF 4 0% OF THE COMMISSION RECEIVED AS EXPENSES. IT WAS THE SUBMISSION THAT O N APPEAL THE LEARNED CIT(A) HAD HELD THAT THE COMMISSION INCOME CANNOT BE REGARDED AS PART OF THE SALARY AND HAD HELD THAT THE ASSESSEE WAS ENTITLED TO THE ALLOWANC E OF 40% OF THE COMMISSION INCOME AS EXPENSES. IT WAS THE SUBMITTED BY THE LE ARNED DR THAT THE ISSUE IS NOW SETTLED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. R. RAJENDRAN REPORTED IN 260 ITR 476 AS ALSO THE DECIS ION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. T. ABDUL WAHID AND CO . REPORTED IN 243 ITR 467, WHEREIN IT HAD BEEN HELD THAT WHERE AN EMPLOYEE WAS BEING PAID COMMISSION IN ADDITION TO SALARY, THE SAME WAS LIABLE TO BE TREAT ED AS SALARY. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED CIT(A) WAS LIABLE TO BE REVERSED. I.T.A. NOS. 686-689/MDS/2002 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET IT IS NOTICED THAT THE DECISION RELIED UPON BY THE LEARNED DR IN THE C ASE OF R. RAJENDRAN, REFERRED TO SUPRA, WAS UNREPRESENTED BY THE ASSESSEE THEREIN. IT IS FURTHER NOTICED FROM THE RECORDS BEFORE US THAT THE FACTS IN THE PRESENT CAS E ARE ALSO NOT CLEAR INSOFAR AS THE TERMS OF THE EMPLOYMENT, THE METHOD OF COMPUTATION OF THE COMMISSION ETC. ARE NOT BEFORE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ISSUES IN THESE APPEALS ARE LIABLE TO BE RESTORED TO THE FILE OF TH E ASSESSING OFFICER FOR RE- ADJUDICATION AND WE DO SO. IN THE CIRCUMSTANCES, T HE ASSESSMENT ORDERS ARE SET ASIDE WITH A DIRECTION TO RE-DO THE ASSESSMENTS AFR ESH AFTER BRINGING ON RECORD ALL THE FACTS RELATING TO THE ISSUE AND AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. THE ASSESSING OFFICER SHALL ALSO T AKE INTO CONSIDERATION THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CAS E OF R. RAJENDRAN AND THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CAS E OF T. ABDUL WAHID AND CO., REFERRED TO SUPRA WHILE DECIDING THE ISSUE AFRESH. IN THE CIRCUMSTANCES, THE APPEALS OF THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL P URPOSES. 5. THE ORDER WAS PRONOUNCED IN THE COURT ON 14/11/1 1. SD/- SD/- (DR. O. K. NARAYANAN) (GEORGE MATHAN) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 14 TH NOVEMBER, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE