9911796707
TMI Blog2021 (2) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... uced. Even in the assessment order the Ld. A.O has not made any observation in this regard. There are no specific guidelines before us which could show that under limited scrutiny what needs to be examined by Ld. A.O for the reasons payment to related persons mismatch . In absence of these details which have not been provided by either the parties, the legal ground raised by the assessee deserves to be dismissed. Salary to wives of the partners of the firm - Disallowance of expenses paid to the relatives can be made by the Ld. A.O if he is of the opinion that such expenditure is excessive or unreasonable having regard to the fair market of the goods, services or facilities for which the payment is made or the legitimate needs of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax-I (in short Ld. CIT], Indore dated 27.05.2019 which is arising out of the order u/s 143(3) of the Income Tax Act 1961(In short the Act ) dated 18.09.2017 framed by ACIT-1(1), Indore. 2. Assessee has raised following grounds of appeal:- 1. That on the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in sustaining the order passed by AO u/s. 143(3) without appreciating guidelines/ direction issued by CBDT for completion of cases of Limited scrutiny selected through CASS module. The action of Ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. 2. That on the fact and in the circumstance of the case and in law, Ld. CIT (A) erred in confirming the action of Ld AO. in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the salary to ₹ 1,00,000/- each thereby disallowing ₹ 6,80,000/- as excessive salary paid to relatives under the provisions of Section 40A(2)(b) of the Act. Income assessee at ₹ 1,64,84,390/-. Aggrieved assessee preferred appeal before Ld. CIT(A) wherein the assessee raised the grounds on merits challenging the disallowance and also challenging the jurisdiction of the Ld.A.O made the addition for the reasons not identified by him. However Ld. CIT(A) dismissed both the grounds. Now the assessee is in appeal before the Tribunal. 4. Ld. Counsel for the assessee submitted that the reasons provided in the limited scrutiny were towards custom duty payment mismatch, sales turn over mismatch and payment to related person mism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t report is placed nor copy of Income Tax Return form is produced. Even in the assessment order the Ld. A.O has not made any observation in this regard. There are no specific guidelines before us which could show that under limited scrutiny what needs to be examined by Ld. A.O for the reasons payment to related persons mismatch . In absence of these details which have not been provided by either the parties, the legal ground raised by the assessee deserves to be dismissed. 8. As regards the ground raised on merits we observe that ₹ 4,40,000/- each were paid as salary to Smt. Kashmira Ben A Patel and Smt. Puneeta Pragnesh Patel who are the wives of the partners of the firm. The Ld. A.O on his own notion and considering the legitima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional of the assessee or the benefit derived by accruing there from are considered to be excessive or unreasonable. 10. In the instant case the Ld. A.O failed to bring on record the fair market value of the alleged services to be provided by the employees and also failed to show the basis of computing ₹ 1,00,000/- as the legitimate salary for the work to be performed. Ld. A.O has not made any efforts in this regard and without making any enquiry about the fair market value of the services or the experience of the employees or the comparison of similar type of salary paid for the work performed by other employees of the concern has just resorted to make disallowance which in our view is uncalled for. Ld. Departmental Representative ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
