2016 (6) TMI 1038 - HC - Income Tax

Assessment of commission under the head income from business or profession - dis allowance of proportionate expenses delted by ITAT - Held that - Revenue, was unable to point out any infirmity in the views expressed by the learned Tribunal. He is unable to show any reason as to why the income of a sum earned by the assessee on account of commission should not have been treated to have been earned from business or profession. He is also unable to show as to why the expenditure was not admissible, whereas the order passed by the learned Tribunal concurring with the views of the CIT(A) is a well reasoned order. - Decided against the revenue.

Summary

Issues:
1. Interpretation of income earned from commission under the head of business or profession.
2. Allowance of expenditure claimed by the assessee.

Analysis:
1. The case involved a dispute regarding the treatment of income earned by the assessee from commission under the head of business or profession. The assessee had offered a sum of &8377; 5,68,57,561/- for taxation, which included a commission of &8377; 38,38,575/- claimed to have been received from two parties. The parties were not traceable, but tax had been deducted at the source before payment. The Assessing Officer contended that the commission income should be treated under other heads of income. However, the CIT(A) directed the income to be treated as earned from business or profession. The learned Tribunal upheld the CIT(A)'s decision, stating that the income should indeed be assessed under the head of income from business or profession. The appeal against this decision was dismissed, as the revenue failed to provide any valid reasons against the Tribunal's well-reasoned order.

2. Additionally, the Assessing Officer disallowed an expenditure of &8377; 75,922/- claimed by the assessee. The CIT(A) directed the Assessing Officer to allow this expenditure. The Tribunal concurred with the CIT(A)'s decision to allow the expenditure, and the appeal raised questions on the justification of confirming this decision. The revenue, represented by Mr. Sinha, failed to identify any flaws in the Tribunal's decision. Mr. Sinha could not provide reasons why the expenditure was inadmissible, leading the Court to uphold the decision to allow the expenditure. Consequently, both questions raised in the appeal were answered in the affirmative against the revenue, and the appeal was ultimately dismissed.

In conclusion, the High Court upheld the Tribunal's decision to treat the commission income under the head of income from business or profession and to allow the claimed expenditure. The Court refrained from imposing costs on the revenue due to their failure to serve notice of appeal and opposition during the proceedings.