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Issues involved: Disallowance of commission payments, applicability of TDS deduction u/s 194H, deletion of addition made by Assessing Officer, grounds for appeal before Tribunal.
The department filed a Miscellaneous Petition challenging the order of the Income Tax Appellate Tribunal in ITA No.104/Bang/2011, which dismissed the appeal based on the Assessing Officer's acceptance of the claim of commission payments by the assessee. The department contended that the remand report did not address the issue of TDS deduction u/s 194H on commission payments. The CIT(A) deleted the addition made by the Assessing Officer, leading to the department's appeal before the Tribunal. The assessee, a trader of silk sarees and garments, disclosed an income of &8377;30,53,320 for the relevant assessment year. The Assessing Officer disallowed a significant portion of commission payments totaling &8377;1,52,28,784, as he believed that only 2% of commission was allowable. The CIT(A) deleted the disallowance based on a favorable remand report from the Assessing Officer, prompting the department to appeal before the Tribunal. The Tribunal upheld the CIT(A)'s decision to delete the addition of &8377;1,39,50,088 made by the Assessing Officer. The department filed a Miscellaneous Petition citing non-consideration of specific grounds related to the applicability of TDS deduction u/s 194H and disallowance of commission payments under section 40(a)(ia) of the IT Act, 1961. During the proceedings, it was noted that the commission payments ranged from &8377;1500 to &8377;2400, with the Assessing Officer disallowing amounts exceeding 2%. The Tribunal found that the issue of TDS deduction u/s 194H and disallowance under section 40(a)(ia) did not arise from the CIT(A)'s order, as it was not addressed in the remand report or by the CIT(A) herself. Consequently, the Tribunal dismissed the Miscellaneous Petition filed by the department, as there was no apparent mistake in the original order.
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