PANKAJ UTTAMCHAND KATARIA,AMRAVATI vs. INCOME TAX OFFICE WARD -3, AMRAVATI

This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)-1, Nagpur [‘the CIT(A)’] dated 21.12.2016 for the assessment year 2012-13.

At the outset, there is a delay in filing the present appeal of 317 days. The appellant filed a condonation petition stating that the delay in filing the present appeal had occurred on account of the appellant pursuing the alternative remedy by filing the petition u/s 154 and the order u/s 154 from the Commissioner of Income Tax (Appeals) was received on 02.09.2017. Thereafter, the counsel of the appellant was busy in attending his father, who is aged about 83 2 years old, who met the accident and thereafter undergone the leg surgery followed by severe heart attack. 3. On the other hand, ld. Sr. DR opposed the condonation of delay. 4. Considering the above submissions of the ld. AR, I find that it is a fit case for condoning the delay of 317 days. Hence, I condone the delay and admit the appeal for adjudication. 5. Briefly, the facts of the case are that the appellant is an individual engaged in the business of wholesale trading of batteries under the name and style “M/s. Katariya Agency”. The return of income for the assessment year 2012-13 was filed on 20.09.2012 disclosing total income of Rs.14,33,239/-. While computing the taxable income under the head of “business income” the appellant had claimed deduction of salary paid to one Mr. Rajesh Kataria of Rs.7,20,000/-. During the course of assessment proceedings, the Assessing Officer was of the opinion that the salary paid to Shri Rajesh Kataria was increased by 171% as against increased in the business turnover by 134%. Therefore, Assessing Officer was of the opinion that the appellant had paid excessive salary to the said person and disallowed a sum of Rs.1,57,200/- invoking the provisions of section 40A(2)(b) of the Income Tax Act, 1961 (‘the Act’) made the disallowance of Rs.1,57,200/-.