SMT. ANITA ANAND,NEW DELHI vs. ITO, NEW DELHI

The Appellant, Smt. Anita Anand (hereinafter referred to as ‘the assessee’) by filing the present appeal being sought to set aside the impugned order dated 06.01.2012 passed by the Commissioner of Income-tax (Appeals)- XXVI, New Delhi qua the assessment year 2009-10 on the grounds inter alia that :-

Assessee carried the matter before the ld. CIT (A) by way of an appeal who has dismissed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by challenging the impugned order passed by the ld. CIT (A) by way of filing the present appeal.

We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.

Ld. Counsel for the assessee contended inter alia that all the expenses disallowed by the AO have been incurred by the assessee being partner in the interest of business expediency; that assessee has been dealing in the sale of precious jewellery and their customer are mostly foreigners and NRIs; that since the remuneration and interest income represented the business income of both the assessee in view of section 28 (v) of the Act, they claimed the expenditure in the interest of business expediency for protecting and preserving their profit earning estate. However, on the other hand, ld. DR relied upon the order passed by the ld. CIT (A).

In the backdrop of the aforesaid facts and circumstances and contentions raised by the parties, the sole question arises for determination in both the cases is :-

Undisputedly, both the assesses who are husband and wife are partner of M/s. Diamate Exports and incurred expenditure claimed during the year under assessment as per para 4 page 2 of the synopsis to the following effect :-

It is also not in dispute that aforesaid expenses have not been incurred to earn the income by both the assessee as partners from M/s. Diamate Exports. It is also not in dispute that both the assessees as partners have earned remuneration from M/s. Diamate Exports at Rs.40,000/- per annum but incurred the expenses of Rs.1,91,100/- in case of Smt. Anita Anand and Rs.3,12,000/- in case of Shri Rupinder Anand.

In the backdrop of the aforesaid undisputed facts and circumstances, we are of the considered view that it does not fit into any business model that a partner has incurred Rs.1,91,100/- or Rs.3,12,000/- as the case may be to earn Rs.40,000/- per annum as remuneration; that these expenses by their very nature are having no nexus with the business being run by M/s. Diamate Exports of which both the assessees are partners by any stretch of imagination; that no such expenses have ever been claimed by the assessee in the earlier years nor has come up with any explanation as to what was the business expediency to incur such expenses in the year under assessment; that these expenses are not required to be incurred to earn the meager remuneration and interest income by the assessees as partners from M/s. Diamate Exports.

In view of what has been discussed above, we find no illegality or infirmity in the findings returned by the ld. CIT (A), hence both the aforesaid appeals are hereby dismissed. Order pronounced in open court on this 12th day of July, 2016.