Sanjay Bajpai vs. ACIT, 3(1), Raipur

Parties Involved

Facts Summary

The assessee, Sanjay Bajpai, a developer, filed his Income Tax Return for the Assessment Year 2013-14 on 02.04.2014 declaring income of Rs.35,36,070/-. The case was picked up for scrutiny. The Assessing Officer show-caused the assessee to explain the genuineness of customer deposits aggregating to Rs.21,94,38,719/-, to produce bills vouchers justifying the commission expenses and salary expenses, and to explain his failure to deduct tax on interest expenses of Rs.30,55,952/-. The assessee did not ensure any compliance during the assessment proceedings; therefore, the Assessing Officer taxed the entire customer deposits under section 68 of the Act and disallowed the entire commission expenses and 20% of the salary expenses. The Assessing Officer also disallowed the interest expenses under section 40a(ia) of the Act. The assessee filed an appeal before the Commissioner of Income Tax (Appeals), who allowed partial relief out of disallowances of commission expenses and salary expenses but upheld the addition of Rs.21,94,38,719/- under section 41(1) of the Act and the disallowance of Rs.30,55,952/- under section 40a(ia) of the Act. The appeal is before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Disallowance of Commission expenses of Rs.10,00,000/-
• 2. Disallowance of salary expenses of Rs.2,32,450/-
• 3. Disallowance of interest expenses of Rs.30,55,952/- under section 40a(ia) of the Act
• 4. Addition of Rs.21,94,38,719/- under section 41(1) of the Act

Judgment Outcome

Decided in favour of Assessee.

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