We are not convinced with the submission made by the learned AR in this regard for the reason that as per the mandate of Article 7, the deduction is to be allowed in conformity with the provisions of the Income-tax Act, 1961. Once section 44C is there, there can be no escape unless it is proved that the expenses incurred are not covered within the mandate of section 44C of the Act.
Merely by depositing the due tax on the amount received on termination of employment the bona fides of the assessee in not declaring the receipt as income in its return of income is not established.
A Chartered Accountant has an obligation, not only statutory but also moral and social, to be absolutely and completely diligent and cautious and careful while preparing, signing and certifying Annual Accounts and/or Audit report. Several Government and private organizations and individuals rely on the report/certificate by Chartered Accountant and once a particular factual aspect or entries, etc.
When the similar issue arose in AY 2005-06, the ITAT again following its own order for AY 2004-05, upheld the order of the learned CIT(A) deleting the disallowance of commission paid to directors. Admittedly, the facts of the year under consideration are identical. Therefore, respectfully following the above decision of ITA T in assessee ’s own case, we uphold the order of learned CIT(A) and dismiss the Revenue’s appeal.
In the instant case, the agreement was entered into between the parties on 1-7-2012 and by the mail dated 4-7-2012, the petitioner evinced her desire not to go ahead with the transaction. Indeed, the petitioner unilaterally offered the deduction in terms of the agreement though it would have been understandable for the petitioner even to require a reconsideration of the matter since the termination followed within the days of the execution of the agreement.
The Revenue preferred an appeal to the Tribunal in ITA 398/Del/2006. As seen from paragraphs 6 & 7 of the impugned order of the Tribunal, the Revenue disputed before the Tribunal the contention of the assessee that it had furnished the confirmation letters from the share applicants along with their income tax details, statement of bank accounts etc. The assessee, as seen from paragraph 5 of the impugned order had contended that the share subscribers were assessed to tax and since their identity stood established, no addition can be made in the hands of the assessee, having regard to the judgment of the Supreme Court cited above.
From the above judgment of the Apex Court it would be abundantly clear that there should be a systematic instruction to the students by way of normal schooling. Mere coaching classes may provide some kind of knowledge to the students. But that kind of acquisition of knowledge through coaching classes cannot fall within the meaning of “education” as provided in section 2(15) of the Act. As the Apex Court observed, one may acquire knowledge in the course of travelling; during the course of reading newspaper; etc. But that kind of knowledge cannot fall within the term “education” as provided in section 2(15) of the Act. There should be a normal schooling by way of regular and systematic instruction.
It is the case of the assessee that since it has mortgaged its property with the bank to enable the company to avail finance facilities from the bank, the advance by the company is not a gratuitous loan or advance, but in return for an advantage which the company has already availed on account of mortgaging of properties done by the assessees.
There is no dispute with regard to the fact that the assessee herein is a IATA agent and it is authorised to sell air tickets at a price range that are usually fixed by the airline companies. It is also a fact that the competition between different airline companies has increased due to presence of a number of airline companies and the same has resulted in fixation of ticket rates at different levels at different points of time. Accordingly, it appears that the IATA agents are given option to fix the ticket rates within the maximum and minimum range that are fixed by the airline companies.
Coal India Ltd. & Anr. Vs Continental & Eastern Agencies (Delhi HC)- In the case reported as (1967) 66 ITR 613 (SC) Ram Laxman Sugar Mills v,Commissioner of Income-Tax, U.P. & Ors. the Hon’ble Supreme Court has categorically held that it is open to the manager of a joint Hindu Family as representing the family to agree to become a partner with another person. The partnership agreement in that case is between the manager and the other person and by the partnership agreement no members of family, except the manager acquires a right or interest in the partnership. The junior members of the family may make a claim against the manager for treating the income or profits received from the partnership as a joint family asset, but they cannot claim to exercise the rights of partners nor be liable as partners.
