ACIT, CIR-40, KOLKATA, KOLKATA vs. M/S INTER STATE SECURITY AGENCY, KOLKATA

ITA 1156/KOL/2015Status: DisposedITAT Kolkata17 November 2017AY 2011-20123 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision to allow the bonus payments. The bonus payments were supported by bonus sheets, registers, and TDS deductions, and were paid to the same employees who received salaries.

What were the facts?

The assessee, a security guard agency, claimed bonus payments of Rs. 38,92,581/-. The Assessing Officer disallowed this entire amount due to lack of authentic documents, while allowing salary payments.

What were the issues?

Whether bonus payments made to employees are allowable as an expenditure when supported by documentary evidence like bonus sheets and TDS, even if initially disallowed by the AO.

Which sections of the Income-tax Act were involved?

Not specified

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH: KOLKATA

Hearing: 25.09.2017Pronounced: 17.11.2017

Heard together (2 matters)

ITA No.1156/Kol/2015

CO No.50/Kol/2015

Read from the judgment's own cause title. This page is filed under one of them.

ORDER

Per Shri A.T.Varkey, JM

The appeal filed by the revenue and the Cross Objection filed by the assessee are against the order of Ld. CIT(A)-12, Kolkata dated 29.07.2015 for AY 2010-12. Since the appeal and the cross objection have arisen out of the common order of the Ld. CIT(A), we dispose of both the appeal as well as the Cross Objection by this consolidated order.

The sole issue involved in this appeal of revenue is against the action of the Ld. CIT(A) in deleting the addition of Rs.38,92,581/- on account of bonus payments.

2 & CO No.50/Kol/2015 Inter State Security Agency, AY 2011-12 3. Briefly stated facts are that the assessee is running a security guard agency. During the e-filing return, the assessee showed payment of salary of Rs.6,66,02,828/-. During the assessment proceedings, the assessee on being asked by the AO, filed details showing payment of salary of Rs.6,24,85,308/- and payment of bonus of Rs.38,92,581/- separately. Assessee also produced salary and bonus sheets before the AO for verification. However, the AO allowed salary to the tune of Rs.6,22,50,369/-, (disallowing a sum of Rs.2,34,939/-) but disallowed the entire bonus payments and added the same to the total income of the assessee due to non production of any authentic documents as per the AO. On appeal, the Ld. CIT(A) directed the AO to allow bonus payments of Rs.38,92,581/- by observing as under: “I have duly considered the submission of the appellant and the details filed . The appellant is a security guard agency. In the e-return, it showed payment of salary of Rs.6,66,02,828/-. During the assessment proceedings, the appellant filed details showing payments of salary of Rs.6,24,85,308/- and payments of bonus of Rs.38,92,581/- separately. The appellant also produced the salary and bonus sheets before the AO for verification. However, AO allowed salary to the tune of Rs.6,22,50,369/- (disallowing a sum of Rs.2,34,939/-) but disallowed entire bonus payments ignoring the bonus register and without assigning any reason whatsoever. The Ld. AR of the appellant has filed copy of sample bonus sheets showing bonus was paid to the same persons to whom salary was paid. He also produced evidences that tax was deducted at source as and where required against such bonus payments. Having examining the documents produced, the contention of the appellant is found correct. Since the AO accepted the payments of salary, he ought to have accepted bonus payments also paid to the same employees. Just because bonus column is kept nil in the e-return, AO cannot disallow bonus payments, when supported evidence were produced before him. The AO is, therefore, directed to allow bonus payments of Rs.39,92,581/-.”

Aggrieved by the aforesaid order, the revenue is in appeal before us.

We have heard rival submissions, gone through the facts and circumstances of the case and also carefully perused the order of the Ld. CIT(A). We note that we find no infirmity in the order of the Ld. CIT(A) in deleting the addition on account of bonus payments as the claim of the assessee was supported by the bonus sheets and register. Moreover, we note that AO allowed the salary expenditure claimed by the assessee to the tune of Rs.6,22,50,369/- (disallowed only Rs.2,34,939/-) and when the fact that very same employees received the salary and bonus which was supported by bonus register and TDS was deducted at source as per law, so the bonus expenditure has to be allowed and Ld. CIT(A) has rightly allowed it. We also note that the Ld. DR could not controvert the above finding of the Ld. CIT(A) by producing any material to upset the decision of ld CIT(A).

3 & CO No.50/Kol/2015 Inter State Security Agency, AY 2011-12 Hence, we decline to interfere in the order of the Ld. CIT(A) and the same is hereby upheld. Appeal of revenue is dismissed.

The Cross Objection of assessee is in support of the order of the ld. CIT(A) and hence, the same is dismissed as infructuous.

In the result, appeal of revenue is dismissed and Cross Objection of assessee is also dismissed being infructuous.

Recent GST High Court judgments

Search GST case law →