MANISH GUPTA,MEERUT vs. DCIT, CENTRAL CIRCLE, MEERUT

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] -IV, Kanpur dated 22.10.2018 pertaining to Assessment Year 2011-12.

The grievances of the assessee is two fold:

At the very outset, the ld. counsel for the assessee did not press the legal ground and the same is dismissed as not pressed.

Coming to the merits of the case, we find that the assessee has E- filed return of income showing total income of Rs. 20,79,910/-. During the course of scrutiny assessment proceedings, the Assessing Officer found that in the case of Shri Manish Gupta, HUF of the assessee has shown commission income of Rs. 8,35,000/- from Ajnara India Ltd. On verification, the Assessing Officer found that such commission was received on account of a flat sold to different persons.

The Assessing Officer was of the opinion that such commission was not earned by the HUF of the assessee but by the assessee and, accordingly, made an addition of Rs. 8,35,000/- in the hands of the assessee.

The assessee carried the matter before the ld. CIT(A) but without any success.

Before us, the ld. counsel for the assessee brought to our notice the decision of the ld. CIT(A) in the case of the brother of the assessee Shri Sanjiv Gupta and pointed out that on identical set of facts, similar commission income of Rs. 8.15 lakhs was assessed in the hands of HUF of Shri Sanjiv Gupta.

The ld. counsel for the assessee further drew out attention to the relevant documents to substantiate the earning of commission by the HUF of the assessee and not the assessee.

Per contra, the ld. DR strongly supported the findings of the ld. CIT(A).

We have given thoughtful consideration to the orders of the authorities below. We find force in the contention of the ld. counsel for the assessee. On identical set of facts, commission income in the case of the brother of the assessee was taxed in the hands of the HUF. A perusal of the computation of income of HUF of the assessee shows that the HUF has returned commission income and paid taxes thereon. Commission bill was submitted by the HUF to the Accounts Manager of Ajnara India Ltd. This bill is placed at page 27 of the paper book.

Page 28 of the paper book is copy of accounts of the HUF of the assessee in the books of Ajnara India Ltd showing payment of commission to the HUF. Page 29 is the TDS Certificate issued by Ajnara India Ltd showing TDS on commission paid to HUF of the assessee. Page 31 is copy of bank account of the HUF of the assessee with Oriental Bank of Commerce, wherein commission has been deposited after TDS.

Considering all these facts in totality, we are of the considered opinion that the commission income belonged to the HUF and rightly returned by it. Therefore, correct hand for taxing such income is HUF and not the assessee. Accordingly, the Assessing Officer is directed to delete the addition from the hands of the assessee.

In the result, the appeal of the assessee is partly allowed.