TaxTMI 
TaxTMI 
2023 (2) TMI 222
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.... the time of hearing, the Ld A.R did not press ground no. I relating to jurisdiction of Ld CIT(A) to pass impugned orders. The ground no. II is an off shoot to ground no.I. Accordingly, both the grounds are dismissed as not pressed. The remaining grounds relate to the disallowance made by the AO u/s 40(a)(i) of the Act. 3. The assessee company is engaged in the business of manufacture and sale of chemical items. During the course of assessment proceedings of these three years, the AO noticed that the assessee has booked commission expenses payable to its whole time directors as detailed below:- S.No. Name Position Asst.Year 2014-15 Asst. year 2015-16 Asst. year 2016-17 1 K K Modi Chairman & M D 2,24,31,560 2,42,25,645 4,46,30,8....
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....ission expenses as on 31.3.2014, 31.3.2015 and 31.3.2016, but the TDS was deducted in the succeeding years when the payment was actually made. He noticed that the provisions of sec.194J refer to the amounts payable as "commission" to a director of a company and as per the provisions of sec.194J of the Act, the TDS is liable to be deducted at the time of credit of such sum to the account of payee or at the payment of payment, whichever is earlier. The Ld CIT(A) further noticed that the Tribunal has observed in its order passed for AY 2009-10 that the provisions of sec.194J was expanded to cover commission payments which are in the nature of salary only w.e.f. 01.07.2012 and hence no disallowance u/s 40(a)(ia) of the Act was called for. Since....
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....he Ld CIT(A) was not justified in referring to the provisions of sec.194J of the Act to the commission expenses payable to the whole time directors of the assessee company. Even otherwise, the provisions of sec.194J excludes from its ambit, the commission payments which are liable to TDS u/s 192 of the Act. 7. The impugned commission expenses have been made to the whole time directors and the assessee has deducted TDS on it u/s 192 of the Act, when the payments were actually made in the succeeding year. We noticed that an identical disallowance made in AY 2009-10 has been deleted by the ITAT and the order so passed by ITAT has since been upheld by Hon'ble High Court of Bombay, vide its order dated 16th December, 2021 passed in Income tax A....
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....vision at the year end and as Respondent had failed to do so, the same called for disallowance under Section 40(A)(ia) of the said Act. 5. Shri Kapadia tendered copy of Form-16 of CMD which is taken on record and pointed out that Form-16 of the CMD for the Assessment Year 2010-2011 showed that commission was part of overall compensation/salary of the CMD and hence TDS in respect thereof is covered under Section 192 of the said Act. 6. Having considered the memo of appeal and the orders annexed thereto and after hearing Shri Sharma and Shri Kapadia, we find that the commission paid to the CMD has been shown as part of salary in Form-16 for Assessment Year 2010-2011. Total salary paid for the Financial Year 2009-2010 as it appears from th....
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.... a matter of no consequence to the Department; and one should have thought that the Department would not fritter away its energies in fighting matters of this kind. But, obviously, judging from the references that come up to us every now and then, the Department appears to delight in raising points of this character which do not affect the taxability of the assessee or the tax that the Department is likely to collect from him whether in one year or the other." 9. In our view, the Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that questions as pressed any su....