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TMI Blog2021 (7) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the revenue. In the present fact, Revenue has not made out any cases of tax evasion. However in the interest of Justice we remand this issue back to the Ld. AO only to verify the rate of tax applicable to the director during the year under consideration and to consider the claim of assessee in accordance with the various ratios laid down - Decided in favour of assessee. - ITA No. 2394/Bang/2018 - - - Dated:- 22-7-2021 - B. R. Baskaran , Member ( A ) And Beena Pillai , Member ( J ) For the Appellant : K. S. Naveen Kumar , Advocate For the Respondents : Kannan Narayanan , JCIT ( DR ) ORDER Per B. R. Baskaran , Judicial Present appeal has been filed by assessee against order dated 15/06/2018 passed by the Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer Authorities erred in not following various judicial precedents which have held that, if there is no evasion of tax, then Section 40A (2) cannot be invoked. 8. For the above and other grounds that may be urged at the time of hearing of the appeal, the appellant humbly prays that these concise grounds be considered and the appeal be allowed with consequential relief including refund of excess taxes paid with interest by holding that the disallowance u/s. 40A(2) is untenable and to set aside the impugned order dated 15.6.2018 and the consequential demand of tax and interest, in the ends of justice. Brief facts of the case are as under: 2. The assessee is a company engaged in the business of computer software services. It fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... included salary of ₹ 1,41,93,809/- and the balance amount of ₹ 6,00,00,000/- incentive. It was submitted that, the incentive was paid in the month of February and March 2015. Efforts to bring several new contract during the year and that helped the assessee to achieve turnover of 32.74 crores. Assessee submitted that the incentive was given to the director for his relentless of efforts made during the year to attain the turnover which otherwise would not have happened since the assessee was towards the closure. 3.2. The assessee submitted that the amount paid to the director has suffered tax at the rate of 33.45% in the hands of the Director, which is also the tax payable in the hands of assessee. Assessee relied on the CBDT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excessive and unreasonable expenditure being a transaction between parent company and the assessee therein being covered under section 40(A)(2) of the Act. Hon'ble Court held that, transaction between the relatives and associate would be treated as bona fide case unless the officer finds that one of them is trying to evade payment of tax. He also relied on the decision of Hon'ble Bombay High Court in case of CIT vs. Indo Saudi Services (Travel) Pvt. Ltd., reported in 310 ITR 306 where assessee was a general sales agent of a foreign airline and that, the Ld. AO found therein that incentive commission paid by that assessee to its sister concern was half percent more than that paid to other subagents. Relying on the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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