2015 (12) TMI 1016

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....us artificial jewellery, etc., filed its return of income for Assessment Year 2006-07 on 31.10.2006 declaring income of Rs. 4,360. The return was processed under Section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. The assessment was completed under Section 143(3) of the Act vide order dt.24.11.2008, wherein the income of the assessee was determined at Rs. 4,88,630 as against the returned income of Rs. 4,360 in view of the following additions / disallowances :- (i) Disallowance of interest paid to partners : Rs.1,89,434. (ii) Staff Salary : Rs.2,49,835. (iii) Sundry Expenses : Rs.15,000. (iv) Postage & telephone charges : Rs.30,000. ....

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.... case. 2. The appellant denies itself liable to be taxed over and above the total returned income by the appellant of Rs. 4,360 under the facts and circumstances of the case. 3. The learned CIT (Appeals) is not justified in law and on facts in confirming the addition made of Rs. 8,91,075 made by the learned Assessing Officer on account of difference in turnover as per Form No.16A and the Profit and Loss Account of the appellant. 4. The lerned authorities below failed to appreciate the fact that the appellant was only receiving commission for maintaining the show room and the rent was paid by the Principal i.e. M/s. Oysterbay Pvt. Ltd. to the land lord directly under the facts and circumstances of the case. ....

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....we, therefore, uphold the action of the Assessing Officer in charging the said interest. The Assessing Officer is, however, directed to recompute the interest chargeable u/s. 234B, 234C and 234D of the Act, if any, while giving effect to this order. 6.1 In Grounds S.No.3 to 5, the sole issue for consideration in this appeal, the assessee assails the impugned order of the learned CIT (Appeals) in confirming the addition of Rs. 8,91,075 made by the Assessing Officer, on account of the difference of receipts as per TDS Certificates in Form No.16A of Rs. 43,94,366 vis-à-vis the receipts of Rs. 35,53,291 reflected in the assessee's profit and loss account. It is contended that the assessee was only receiving commission for maintain....

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....ged in the business of selling jewellery in a showroom of Oyzterbay Pvt. Ltd. for which the assessee received/earned commission on sales effected. Before us, the learned Authorised Representative for the assessee reiterated the submissions put forth before the learned CIT (Appeals) that expenditure incurred by it for running the showroom, including rents amounting toRs.8,91,075 paid to the landlord, were reimbursed by Oyzterbay Pvt. Ltd. which are all reflected in its rental accounts and therefore does not find place in its profit and loss account. 6.3.2 On an appreciation of the facts on record we do not find the arguments and claims put forward by the assessee to be factually tenable. As per the business agreement dt.10.10.2003 and the....