Kalpana Panja, Howrah V. ACIT, Cir-46, Kolkata, Kolkata

ITA 719/KOL/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8101 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 07-05-2012
• Court: TRIBUNAL
• Department Lawyers: D K RAKSHIT
• Assessee Lawyers: MIRAJ D. SHAH
• Section: 143(3)

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND ! ' ! , ) [BEFORE SHRI PRAMOD KUMAR, AM & SHRI MAHAVIR SINGH, JM] # # # # / I.T.A NO. 719/KOL/2012 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEAR: 2007-08 KALPANA PANJA VS. ASSISTANT COMMISSIONER OF INC OME-TAX, (PAN : AGGPP3039C) CIRCLE-46, KOLKATA ()* /APPELLANT ) (+)*/ RESPONDENT ) DATE OF HEARING: 03.10.2012 DATE OF PRONOUNCEMENT: 05.10.2012 FOR THE APPELLANT: SHRI MIRAJ D. SHAH FOR THE RESPONDENT: SHRI D. K. RAKSHIT, SR. DR , / ORDER PER MAHAVIR SINGH, JM ( ! ' ! ! ' ! ! ' ! ! ' !, , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXX, KOLKATA IN APPEAL NO. 135/CIT(A)-XXX/CIRCLE-46/2009-10 DATED 24.02.2012. ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-46, KOLKATA U/S. 143(3) OF THE INCOME-TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2007-08 VIDE HIS SEPARATE ORDER DATED 26.11.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) SUSTAINING THE DISALLOWANCE, MADE BY AO, OF RS. 98,000/- ON ACCOUN T OF SALARY PAID TO THE MANAGERS BEING PERSONS SPECIFIED U/S. 40A(2)(B) OF THE ACT. FOR TH IS, ASSESSEE HAS RAISED FOLLOWING GROUND: (1) FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE OF THE SUM OF RS.98, 000/- OUT OF SALARY PAID TO MANAGERS (BEING PERSONS SPECIFIED U/S. 40A(2)(B) OF THE ACT) INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE CARRYING OUT THE BUSINESS. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS DEBITED A SUM OF RS.2,94,000/- ON ACCOUNT OF MANAGE RS SALARY. THE SALARY WAS PAID TO DIPANKAR PANJA A SUM OF RS.1.74 LACS AND TO TANUSRE E PANJA A SUM OFRS.1.20 LACS, BOTH BEING SON AND DAUGHTER IN LAW OF THE ASSESSEE. THE AO DI SALLOWED 1/3 RD OF THE SALARY CREDITED TO DIPANKAR PANJA AND TANUSREE PANJA, THAT COMES TO RS .98,000/- BY STATING THAT THE SALARY TO SON AND DAUGHTER IN LAW APPEARS TO BE ON HIGHER SIDE CO NSIDERING THE VOLUME OF BUSINESS. HE, THEREFORE, ESTIMATED THE DISALLOWANCE OF 1/3 RD OF THE SALARY CREDITED TO THESE TWO PERSONS. THE CIT(A) CONFIRMED THE ACTION OF AO BY STATING THAT T HE AO DISALLOWED 1/3 RD OF SALARY PAID TO 2 ITA NO. 719/K/2012 KALPANA PANJA A.Y. 2007-08 THESE PERSONS AFTER CONSIDERING VARIOUS ASPECTS OF THE BUSINESS OF THE ASSESSEE. WE FIND THAT BEFORE CIT(A) ASSESSEES CONTENTION WAS THAT MR. PANJA LOOKS AFTER MARKETING, PROCUREMENT, COLLECTION OF THE CONCERN. MRS. PANJA LOOKS AFTER INVOICING, BANKING OPERATIONS, PAYMENTS ON FULL TIME BASIS IN THE SAID CONCERN . WE FIND THAT CIT(A) HAS NOT EXAMINED THE PLEA R AISED OR SERVICES RENDERED BY THESE PERSONS AS CLARIFIED BEF ORE HIM. EVEN THE AO HAS NOT BROUGHT ON RECORD ANY REASON WHY HE HAS ESTIMATED DISALLOWANCE . THERE IS NO WHISPER THAT THESE TWO EMPLOYEES I.E. THE MANAGERS, EVEN THOUGH THEY MAY B E SON AND DAUGHTER IN LAW, HAVE NOT CARRIED OUT ANY BUSINESS OR RENDERED ANY SERVICES. THE ASSESSEE BEFORE CIT(A) HAS SPECIFICALLY RAISED THE ISSUE BUT CIT(A) HAS NOT ANSWERED THE SA ME. THIS BEING A VERY SMALL AMOUNT OF DISALLOWANCE, NO PURPOSE WILL BE SERVED IN SENDING THE ISSUE BACK TO THE FILE OF THE LOWER AUTHORITIES AND CONSIDERING THE EXPLANATION SUBMITT ED BEFORE CIT(A) AND EVEN NOW BEFORE US THAT THESE TWO EMPLOYEES RENDERED SERVICES, WE TREA T THE SALARY PAYMENT AS GENUINE AND REASONABLE. THIS VIEW OF OURS IS ALSO SUPPORTED BY THE FACTS THAT THE AO HAS NOT BROUGHT OUT ANY COMPARATIVE CASE TO SHOW THAT THE SALARY PAID IS UN REASONABLE OR ANY EVIDENCE TO SHOW THAT THE SAID RELATIVES HAVE NOT PROVIDED ANY SERVICES AS CL AIMED BY ASSESSEE. KEEPING IN VIEW THE SERVICES RENDERED BY THESE PERSONS, AS EXPLAINED BY ASSESSEE, WE ACCEPT THE CLAIM OF THE ASSESSEE AND ALLOW THE SAME. APPEAL OF ASSESSEE IS ALLOWED. 4. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 5. ORDER PRONOUNCED IN THE OPEN COURT ON 05.10.2012 . SD/- SD/- , ! ! ! ! ' ! ' ! ' ! ' ! , (PRAMOD KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( - - - -) )) ) DATED : 05TH OCTOBER, 2012 ./ '$01 '2 JD.(SR.P.S.) 3 ITA NO. 719/K/2012 KALPANA PANJA A.Y. 2007-08 , 3 ''4 54&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT SMT. KALPANA PANJA, C/O, FLOWELL ENGINE ERS, ICHAPUR, H.I.T. ROAD, SASTIBAGAN, SANTRAGACHI, HOWR AH-711104 2 +)* / RESPONDENT ACIT, CIRCLE-46, KOLKATA. 3 . ',$ ( )/ THE CIT(A), KOLKATA 4. 5. ',$ / CIT KOLKATA 4<'= '$ / DR, KOLKATA BENCHES, KOLKATA +4 '/ TRUE COPY, ,$/ BY ORDER, ! 1 /ASSTT. REGISTRAR .