2016 (1) TMI 859

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....ing addition of Rs. 6,60,822, as interest income on the basis of AIR data. 2. The Assessing Officer and the learned CIT(A) erred in disallowing professional fee of Rs. 1,00,000 citing non-deduction of tax as reason as no proof of same has been submitted. 3. The Assessing Officer and the learned CIT(A) erred in disallowing salary expense of Rs. 2,75,000 as there is no proof of payment of salary and there is no proof of professional tax deducted from said salary." 2. As far as ground no.1, is concerned, the fact in brief are, the assessee is an individual. For the assessment year under consideration, he filed his return of income on 30th September 2009, declaring total income of Rs. 7,03,30,150. During the assessment proceedings, the ....

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....following mercantile system of accounting. Alternatively, it was submitted by the assessee that in case the amount of Rs. 6,60,822, is treated as assessee's income, then credit should be given to the tax deducted at source on such amount by the payer. In this context, the learned Counsel for the assessee submitted a copy of Form no.26AS evidencing deduction of tax of Rs. 68,064. 5. The learned Departmental Representative relied upon the decision of the first appellate authority. 6. We have considered the submissions of the parties and perused the material available on record. There is no dispute to the fact that the assessee is following mercantile system of accounting. Moreover, as per the AIR information available in Assessing Officer's....

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.... far as his individual business activity is concerned, as per the Profit & Loss account assessee has shown professional fee of Rs. 3.23 crore and claimed expenditure of Rs. 10,20,240 comprising of audit fee, bank charges, salary, depreciation, etc. As observed by the Assessing Officer, the professional fees is on account of non-compete fee received from M/s. Digi Home Entertainment Pvt. Ltd. Therefore, he was of the view that as assessee has earned income from a single transaction there is no necessity of incurring such huge expenditure. He also observed that the expenditure claimed was not supported by any documentary evidence. He, therefore, out of the total expenditure of Rs. 10,02,240, allowed an amount of Rs. 21,633, while disallowing ....

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.... as the expenditure incurred towards salary / wages, are concerned, the learned Counsel for the assessee submitted that the expenditure was disallowed only for the reason of absence of evidence. He submitted that salary was paid to regular employees only, however, details could not be filed before the first appellate authority as they were never called for. However, furnishing the details of salary payment through a statement showing the name of employees and salary paid as well as bill from Chartered Accountant, confirmation letter and ledger account from Chartered Accountant, he requested for admitting them as additional evidence and if necessary restore the matter back to the file of the Assessing Officer for proper verification. 13. Th....