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TMI Blog2019 (10) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 11,12,211/- and in the debit side he has debited some expenses which has not been examined by lower authorities. We also noticed that the assessee has been issued Form No.16 for the salary received and Form No.16A for the commission paid to the assessee in which the applicability rate of TDS has been deducted. The assessee submitted before us copy of ledger accounts which has not been considered by the lower authorities. In our opinion, to arrive the correct profit from the above activity carried out by the assessee, the expenses need to be verified on the part of the AO. Therefore, this issue is sent back to the file of AO for verification of expenses debited into the profit and loss account. Reasonable opportunity of being heard shall be given to the assessee and the assessee is directed to appear before the AO and cooperate in the assessment proceedings and he also directed to substantiate the expenses claimed with credible evidence before the AO. Accordingly, the issue raised by the assessee is allowed for statistical purposes. - ITA No.09/CTK/2017 - - - Dated:- 16-10-2019 - Shri Chandra Mohan Garg, JM And Shri L.P. Sahu, AM For the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al i.e. M/s. Seashore Agricultural Promoters Co-operation should be taken after allowing the deduction of expenses to earn that incomes. The fact of the case is that the learned authorities below are wrongly influenced by the nomenclature salary . In fact the appellant is appointed by the Company as a marketing staff for working as an agent to purchase the product like coconut, wheat, rice, moongdal etc by moving village areas. To carry on the works smoothly the assessee in turn appointed some marketing staff under him at different village areas. They contacted the farmers who help for purchasing their products. For that the assessee had filed a profit and Loss account with regard to commission income. Against commission receipt he had debited expenses incurred under the head salary, meeting expenses, business promotion expenses, travelling, telephone and other expenses related expenses. The assessee also engaged in marketing another product for investment in preferential share for Seashore Security Limited. Again for that work also he has to incur various expenses and engage other staff to convince the respective investors. To monitor all these w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess. Further, had it been salary it would have been amount. It is not fixed salary but subject to achievement of business target. If target is not achieved, it is reduced. It is settled by High Court and Supreme Court that the activities of an assessee in an organized manner to earn income is a business or trading activity. Hence, business income. Even in House rent cases where the assessee receives a fixed house rent it has been decided by Hon'ble Supreme Court in the case of S.G. Mercantile Corporation Vs. CIT, 83 ITR 700 (SC) Narsingha Kaur Vs. CIT, 113 ITR 712(Ori), CIT Vs. MP. Bajaj Others, 200 ITR 131(Ori). That an activity carried continuously in an organized manner with a set purpose with a view to earn profit is a business or trading activity and the assessee's earning income from salary commission like that. So in the instance case since the assessee gets his commission and remuneration or profit for procuring business under the head of wrong nomenclature of salary but in infact it is not salary but commission business or trading income. All the relevant expenses incurred to earn the said income should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for promotion of the business and intrinsically connected with the achievement of business by the assessee should have been considered. The remuneration was subject to achievement of target. Therefore, the said receipt in the hands of the assessee is business receipt and not salary as envisaged under the IT. Act, 1961. It is profits and gain of the business or profession which was carried on by the assessee during the relevant year and is assessable u/s 28 of the IT. Act and not salary to be considered u/s. 17 of the IT. Act, 1961. Further the ld. AR submitted that the staff were working for purchase of produce like rice, Mung Dal, Wheat, leaf for rope, coconut from farmers and supply them at cities like Bhubaneswar etc. and they are working for attracting investments in Seashore Securities Ltd. In turn the Company was invested in Floor Mill, Medicine Factory, Diary Farm, Cargoship, Preferential Shares and Dal Processing Unit to earn income so as to pay profit and dividend to the investor. These are nothing but business activities for which the assessee had to appoint staff and make expenditure under the above mentioned heads in Profit Loss Account filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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