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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
Before: Shri Joginder Singh & Shri Rajendra
आदेश / O R D E R Per Joginder Singh (Judicial Member) Both these appeals are by the assessee against the impugned orders dated 30/07/2014 for Assessment Year 2011-12 and dated 20/10/2014 for Assessment Year 2010-11 of the Ld. First Appellate Authority, Mumbai. The ground raised in these appeals pertains to disallowance of claim of Rs.7,20,000/- being salary paid in both the Years and sponsorship charges of Rs.10,24,395/- in each year being paid to Director of the company.
During hearing, the ld. counsel for the assessee, Shri Hari Das Bhatt, contended that the salary and sponsorship expenses were paid to Shri Sidhant Sinha, who was pursuing education in business administration in USA. It was also submitted that the salary paid to Sidhant Sinha was offered for taxation in his hands after deduction of TDS. So far as, sponsorship of educational expenses is concerned, it was contended that he would be useful in future for the management of the company.
2.1. On the other hand, Shri Rajesh Kumar Yadav, Ld. DR, strongly defended the impugned order by contending that firstly no service was rendered by Shri Sidhant Sinha to the assessee company and he is merely a student studying in USA. So far as, sponsorship expenses are concern, these are argued to be purely personal in nature.
2.2. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that Shri Sidhant Sinha is son of the Managing Director. During the relevant assessment year, the assessee company paid salary of Rs.7,20,000/- to him being the director of the company. This salary was offered for taxation in the individual income tax return of Shri Sidhant Sinha. The Ld. Assessing Officer disallowed the same on the ground that no services were actually rendered by Shri Sidhant Sinha. Identical was held by the Ld. Commissioner of Income Tax (Appeal). This Bench asked a query whether service was rendered by Shri Sidhant Sinha to the assessee company, it was explained that he is a student, studying abroad. In such a situation, we are satisfied that in fact no service was rendered by Shri Sidhant Sinha to the assessee company and merely he has shown as Director on papers only. In the absence of any plausible reasoning, we find no infirmity in the conclusion drawn by the Ld. Commissioner of Income Tax (Appeal). We affirm the same in both the years.
So far as, educational expenses are concerned, considering the totality of facts, we are of the view that educational expenses are purely of personal nature and cannot be allowed. So far as, the contention of the Ld. counsel that he will be useful for the assessee company is concerned, at this stage, no usefulness was shown by the assessee and when actual services will be rendered, after completion of education, at that time, it will be depend upon the circumstances. Future is always uncertain. Thus, we find no infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal). This ground of the assessee in both years is dismissed.
Finally, the appeals of the assessee are dismissed.
This order was pronounced in the open in the presence of ld. representatives from both sides at the conclusion of the hearing on 20/04/2017.
Sd/- Sd/- (Rajendra) (Joginder Singh) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated : 25/04/2017 f{x~{tÜ? P.S/.�न.स. आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant (Respective assessee) 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT, Mumbai. 4. आयकर आयु�त / CIT(A)- , Mumbai, 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//