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आदेश/Order
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 13.08.2018 of the Commissioner of Income Tax (Appeals)- 3, Ludhiana [hereinafter referred to as CIT(A)].
The assessee in this appeal has agitated the disallowance made by the Assessing Officer of Rs. 12 lacs on account of excessive salary paid to the director of the company invoking the provisions of section 40A(2)(b) of the Income Tax Act, 1961 (in short 'the Act').
ITA No. 1593-Chd/2018- M/s Vaibhav Yarn Mills Private Ltd., Ludhiana 2
The Ld. Counsel for the assessee, at the outset, has submitted that
the Assessing Officer has not properly appreciated the evidences on the
file and services rendered by the Director namely Smt. Rita Bhalla who
was working full time for the company. The Ld. counsel has further
pointed out that in the previous assessment year, the Assessing Officer
had allowed Rs. 12 lacs as justifiable salary to Smt. Ritu Bhalla,
whereas, for the year under consideration, she has restricted the same to
Rs. 6 lacs out of the salary of Rs. 18 lacs paid to Smt. Ritu Bhalla. That
the above facts have not been considered by the Assessing Officer
while making the impugned disallowance. That even the Ld. CIT(A) has
not properly appreciated the written submissions filed by the assessee
in this respect. The Ld. counsel for the assessee, therefore, has
submitted that the assessee may be given an opportunity to properly
present its case before the Assessing Officer and to apprise the
Assessing Officer of the aforesaid facts and circumstances and also
about the services rendered by Smt. Ritu Bhalla justifying the salary of
Rs. 18 lacs paid to her which was not excessive or unreasonable having
regard to the fair market value of the services / job rendered by Smt.
Ritu Bhalla.
The Ld. DR, on the other hand, has relied on the findings of the
lower authorities.
ITA No. 1593-Chd/2018- M/s Vaibhav Yarn Mills Private Ltd., Ludhiana 3
Considering the above rival contentions of the Ld. Representatives
of the parties, we are of the view, that in the light of the above
submissions made by the Ld. Counsel for the assessee, the matter is
required to be examined afresh by the Ld. Assessing Officer. In view
of this, the impugned order of the Ld. CIT(A) is set aside and the matter
is restored to the file of the Assessing Officer for adjudication afresh on
this issue. The Assessing Officer will give proper opportunity to the
assessee to present its case. Needless to say that the assessee will
promptly appear before the Assessing Officer, as and when called for,
and will not contribute in delaying the proceedings.
In the result, the appeal of the assessee is treated as allowed for
statistical purposes.
Order pronounced in the Open Court on 27.09.2019.
Sd/- Sd/- (संजय गग� / SANJAY GARG) (एन. के. सैनी / N.K. SAINI) उपा�य� /Vice President �या�यकसद�य/ Judicial Member Dated : 27.09.2019 “आर.के.” आदेशक���त�ल�पअ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकरआयु�त/ CIT 4. आयकरआयु�त (अपील)/ The CIT(A) 5. �वभागीय��त�न�ध, आयकरअपील�यआ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File
ITA No. 1593-Chd/2018- M/s Vaibhav Yarn Mills Private Ltd., Ludhiana 4
आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar