Sri Agency , Bangalore vs Assessee

Sri Agency, No.3B, 3rd floor, Lakshmi Rhythm Apartments, Opp. Kanti Sweets, Kempapura Hebbal, Bangalore-560024. ... Appellant PAN: ABHFS9767Q

Vs.

Deputy Commissioner of Income-tax, Central Circle 2(2), Bangalore. ... Respondent

Appellant by: Shri Narayan Hatwar, CA. Respondent by: Shri P.Dhivahar, JCIT(DR).

Date of hearing : 16/04/2015 Date of pronouncement: 11/06/2015

Per Smt. P.MADHAVI DEVI, JM:

This appeal by the assessee is directed against the order

of the CIT(A)-VI, Bangalore, dated 26/03/2014 for the

assessment year 2009-10. The assessee is aggrieved by the

order of the CIT(A) in confirming the disallowance of salary paid

by the assessee-firm to its employees for the services rendered

by such employees and also in not allowing bank charges paid by ITA No.744/Bang/2014 Sri Agency

Page 2 of 4 the firm to clear various cheques received by the firm amounting

to Rs.25,650/-.

2. Brief facts of the case are that the assessee-firm filed its

return of income on 27/09/2009 admitting income of

Rs.3,27,29,880/-. During the assessment proceedings u/s

143(3) of the Income-tax Act, 1961 [hereinafter referred to as

'the Act' for short] the Assessing Officer (AO) examined the

claim of the assessee and found that the assessee has not filed

any evidence/proof in support of its claim of salary and bonus

and other expenditure paid to its employees. Therefore, the AO

made the disallowance and brought it to tax.

3. Aggrieved, the assessee preferred an appeal before the

CIT(A) who has confirmed the additions holding that the

assessee has not filed any details before him as well. Aggrieved,

the assessee is in appeal before us.

4. Learned counsel for the assessee submitted that there

is no dispute that the assessee-firm had employees who

rendered services for which the assessee was bound to make

payment of salary. He submitted that necessary details are

available with the assessee and he may be given an opportunity

to present the same before the AO.

The learned Departmental Representative, on the other

hand, supported the orders of the authorities below and ITA No.744/Bang/2014 Sri Agency

Page 3 of 4 submitted that the assessee ought to have filed all the details

before the authorities below.

5. Having regard to the rival contentions and the material

on record, it is not in dispute that the assessee-firm employed

certain people and these people must have rendered services to

the assessee-firm. In such cases, payment of salary cannot be

doubted but the quantum of payment may have to be examined.

For verification, the assessee is required to file all the relevant

details before the authorities below. In view of the fact that the

assessee has not filed the details before the AO and the CIT(A)

and having regard to the submissions of the learned counsel for

the assessee that the assessee possesses all the required

documents, in the interest of justice and equity, we deem it fit

and proper to remit this issue to the file of the AO with a

direction to examine the details to be filed by the assessee in

accordance with law. The assessee shall co-operate with the AO

by filing all the required details.

6. In the result, the assessee's appeal is treated as

allowed for statistical purposes.

Pronounced in the open court on 11th June, 2015.

sd/- sd/- (Pramod Kumar) (Smt. P.Madhavi Devi) ACCOUNTANT MEMBER JUDICIAL MEMBER eksrinivasulu ITA No.744/Bang/2014 Sri Agency

Page 4 of 4 Copy to:

1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file

By order

Assistant Registrar Income-tax Appellate Tribunal Bangalore.