Itxa/422/2015 Of Shree Vinayak Trading Co v. Joint Commissioner Of Income Tax-Osd (15)(1) Mumbai

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDITION INCOME TAX APPEAL NO.422 OF 2015 Shree Vinayak Trading Company...AppellantV/s.The Joint Commissioner of Income-Tax,OSD 15(1), Mumbai...Respondent ..... Mr.Mandar M. Vaidya, Advocate for the Appellant.Mr.Sham Walve, Advocate for the Respondent. .... CORAM :S.V.GANGAPURWALA &A.M.BADAR JJ. DATED :18[th] July 2017. P.C. 1Shri.Vaidya, the learned counsel for the appellantstrenuously contends that the Tribunal and the Authorities havewrongly interpreted Section 40A(2) of the Income Tax Act. Howthe employees are to be paid is a prerogative of theAssessee/Employer. The payment of salary to the relatedemployee has been accepted, which shows that these persons towhom commission is paid were the employees of the Assessee.Having arrived at a conclusion that these related persons wereemployees of the Assessee, the payment of commission ought tohave been accepted. The Authorities below and the Tribunal were not justified in disallowing the entire commission paid to theemployees without any finding of unreasonable and/or excessivenature of expenditure. The Tribunal and the Authorities ought tohave considered that the appellant has deducted TDS over theamount paid as commission to these persons that wouldsubstantiate that the said payment is a genuine payment. 2Mr.Walve, the learned counsel for respondent supportsthe Order. 3It has been observed by the Authorities that thecommission is only paid to these three related employees and hasnot been paid to any other employees. No explanation in thatregard could be offered by the Assessee. The Assessee hasadmitted about non payment of any commission by way ofincentive to any unrelated employees. It also appears thatcommission was never paid in the earlier assessment year orsubsequent year as has been observed by the Commissioner. Theappreciation of evidence on the part of the Commissioner and theTribunal is reasonable. The finding of fact is a plausible finding. 4In light of that no substantial question of law arises. Appealis dismissed. No costs. ( A.M.BADAR J.) ( S.V.GANGAPURWALA J.)