Shri Rajendrabhai Mohanlal Shah, Baroda v. The ACIT.,Circle-2(2),, Baroda

ITA 2514/AHD/2010 | 2005-2006
Pronouncement Date: 13-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 251420514 RSA 2010
Assessee PAN AKYPS5939E
Bench Ahmedabad
Appeal Number ITA 2514/AHD/2010
Duration Of Justice 4 month(s) 28 day(s)
Appellant Shri Rajendrabhai Mohanlal Shah, Baroda
Respondent The ACIT.,Circle-2(2),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 13-01-2011
Assessment Year 2005-2006
Appeal Filed On 16-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH B BB B BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI T.K.SHARMA T.K.SHARMA T.K.SHARMA T.K.SHARMA JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER AND AND AND AND SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER DATE OF HEARING: 7-1-2011 DRAFTED ON: 12-1-11 ITA NO. 2514 /AHD/ 2010 ASSESSMENT YEAR : 2005-06 SHRI RAJENDRABHAI MOHANLAL SHAH PROP. OF M/S. SHAH INDUSTRIES C/O. SHAH BULK CARRIER SHAH CHAMBERS CHHANI-391 740 (BARODA). VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-2(2) AAYAKAR BHAVAN NR.RACE COURSE CIRCLE BARODA. PAN/GIR NO. : AKYPS 5 939 E (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI A. L.THAKKAR. RESPONDENT BY: SHRI K. MADHUSUDAN SR. D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-IV BARODA DATED 19-5-2010. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE AS SESSEE IN THIS APPEAL IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF `.95 000/- MADE BY T HE LEARNED ASSESSING OFFICER FOR SALARY PAID TO MISS SIDDHI R. SHAH UNDE R SECTION 40A(2) OF THE INCOME TAX ACT 1961. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE LEARNED ASSESSING OFFICER DISALLOWED SALARY OF `.77 000/- PETROL ALLOWANCE O F `.6 000/- AND BONUS OF `.12 000/- PAID TO MISS SIDDHI SHAH ASSESSEES DAU GHTER BY INVOKLING PROVISIONS OF SECTION 40A(2). ASSESSEES SUBMISSIO N BEFORE THE LEARNED ASSESSING OFFICER WAS THAT MISS SIDDHI SHAH HAD PAS SED HER B. COM. AND DID A COMPUTER COURSE AND WAS LOOKING AFTER ADMINISTRAT ION WORK OF ASSESSEES - 2 - OFFICE FULL TIME. THE ASSESSEE COULD NOT FURNISH C OMPUTER COURSE CERTIFICATE ON THE GROUND THAT SHE WAS IN IRLAND AFTER HER MARR IAGE. IT WAS ALSO SUBMITTED THAT OUT OF `.5 500/- PER MONTH `.1 000/ - WAS GIVEN IN CASH AND BALANCE AMOUNT WAS KEPT WITH THE ASSESSEE. THE LEAR NED ASSESSING OFFICER OBSERVED THAT ASSESSEE COULD NOT FURNISH ANY JUSTIF ICATION FOR THE SALARY OR ANY EVIDENCE TO SUPPORT THE PAYMENT. 4. IN APPEAL BEFORE THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) THE ASSESSEE SUBMITTED THAT HIS DAUGHTER HAD VERY G OOD COMMAND ON COMPUTER AND HAD DONE CLASSES IN NIIT AND THE SALAR Y PAID OF `.77 000/- WAS MOST REASONABLE AND NOT AT ALL EXCESSIVE. THE ASSES SEE FILED COPY OF NIIT IDENTITY CARD. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE HAS HELD AS UNDER :- 2.2. I HAVE CONSIDERED THE MATTER. APPELLANT IS IN THE BUSINESS OF PLYING TRUCK TANKERS AND ALSO DEALS INSOLVENTS THI NNER ETC. ON BEING ASKED THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT NO APPOINTMENT LETTER WAS ISSUED TO MS. SIDDHI SHAH. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESS EE ALSO ACCEPTED THAT THERE WAS NO PROOF OTHER THAN DEBIT OF SALARY IN ACCOUNTS FOR HER EMPLOYMENT. APART FROM THE FACT THAT THERE IS NO PR OOF ABOUT MISS SIDDHI SHAH APPELLANTS DAUGHTER WORKING FOR HIS B USINESS EVEN THE PAYMENTS TO HER WERE NOT MADE AT REGULAR INTERVALS. ONLY BOOK ENTRIES WERE MADE IN RESPECT OF SALARY ETC. THERE IS NO PRO OF TO SHOW THAT MS. SIDDHI SHAH ACTUALLY WORKED FOR APPELLANTS BUSINES S. THE ONUS OF ESTABLISHING GENUINENESS OF THE EXPENDITURE WAS OF THE APPELLANT WHICH HAS NOT BEEN DISCHARGED IN ANY MANNER. DISALL OWANCE OF `.95 000/- IS CONFIRMED. 6. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND THE LEARNED DEPARTMENTAL REPRESENTATI VE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE THE ASSESSEE CLAIMED TO HAVE INCURRED SALARY EXPEND ITURE OF `.95 000/- AS PAYMENT TO HIS DAUGHTER NAMELY MS. SIDDHI SHAH. THE LEARNED ASSESSING OFFICER DISALLOWED THE SAME BY INVOKING PROVISIONS OF SECTION 40A(2) WHICH - 3 - WAS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS). BEFORE US THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE EXPLAINED THAT MS. SIDDHI SHAH WAS A B.COM GRADUATE AS WELL A S DIPLOMA HOLDER IN COMPUTER APPLICATION FROM NIIT. HE POINTED OUT THAT ADMIT CARD OF NIIT OF MS. SIDDHI SHAH WAS FILED BEFORE THE LOWER AUTHORIT IES. HE EXPLAINED THAT SHE USED TO MAINTAIN THE ACCOUNTS OF THE ASSESSEE O N COMPUTER AND DISALLOWANCE OF ENTIRE EXPENSES UNDER SECTION 40A(2 )(B) WAS NOT JUSTIFIED AND ATLEAST REASONABLE AMOUNT OUGHT TO HAVE BEEN AL LOWED AS DEDUCTION. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE TO MEET THE ENDS OF JUSTICE WE ALLOW DEDUCTION OF `.48 000/- AS SALARY TO MS. SIDDHI SHAH AND RESTRICT THE DISALLOWANCE TO THE EXTENT OF `.47 000 /-. THUS THE GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 13 TH DAY OF JANUARY 2011. SD/- SD/- ( T.K. SHARMA ) ( T.K. SHARMA ) ( T.K. SHARMA ) ( T.K. SHARMA ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATED: AHMEDABAD 13 TH DAY OF JANUARY 2011. COMPILED AND COMPARED BY: PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD - 4 - DATE INITIALS 1. DRAFT DICTATED ON 12-1-2011 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 12-1-2011 ------ ------------- 3. DRAFT PROPOSED & PLACED 12-1-2011 -- ----------------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 12-1-2011 ---------- --------- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 13-1-2011 --------- ----------- 6. KEPT FOR PRONOUNCEMENT ON 13-1-2011 - ------------------- 7. FILE SENT TO THE BENCH CLERK ---------------- -------------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- -- -------------------