Income Tax Appellate Tribunal - Chandigarh
Karamjit Singh ,Sirhind vs Income Tax Officer, Ito Ward Sirhind ... on 11 May, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, CHANDIGARH HYBRID HEARING BEFORE HON'BLE SHRI LALIET KUMAR, JM AND HON'BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं . / ITA No.636/CHANDI/2025 (िनधारण वष / Assessment Year: 2016-17) Shri Karamjit Singh through L/H ITO Ms. Kawaljit Kaur New Libra Building बनाम/ Vs. M/s Wasan Agencies, Sirhind Railway Road, Sirhind Fatehgarh Sahib, Punjab - 140406 Punjab - 140406 ायीलेखासं./जीआइआरसं./PAN/GIR No. AEGPS-4448-N (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Ms. Neha (CA) - Ld. AR (Virtual Mode) थ कीओरसे/Respondent by : Sh. Vivek Vardhan (Addl. CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 06-05-2026 घोषणाकीतारीख /Date of Pronouncement :
11-05-2026 आदे श / O R D E R Manoj Kumar Aggarwal (Accountant Member)
1. Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 03-02-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 r.w.s. 144 r.w.s. 144B of the Act on 23-03-2022. The sole grievance of the assessee is addition of Rs.3,71,367/- which represent travel package received by the assessee from M/s Asian Paints Ltd. Having heard rival submissions, the appeal is disposed-off as under.
2. The assessee filed return of income declaring income of Rs.2.12 Lacs which was processed u/s 143(1). However, the case was reopened and notice u/s 148 was issued on the ground that during assessment of M/s Asian Paints Ltd., the expenditure incurred by that entity was disallowed u/s 37(1) and also u/s 40(a)(ia) treating the expenditure as commission. These expenses were in the nature of freebies given by M/s Asian Paints Ltd. to the dealers in the form of foreign / local tour and travel packages and the same was not incurred wholly and exclusively for the business. The said expenses represent income from other sources in the hands of the beneficiaries. The assessee being one of the dealers also received such freebies and to tax the same, the case was reopened.
3. During the course of assessment proceedings, Ld. AO questioned the assessee on this issue and computed average amount of transaction which came to Rs.3,71,367/- and the same was added to the income of the deceased assessee. The Ld. CIT(A) confirmed the action of Ld. AO against which the assessee is in further appeal before us.
4. The Ld. AR has placed on record an affidavit of the assessee stating that no freebies were given to the assessee by M/s Asian Paints Ltd. in the form of luxury / foreign tour travel package. Further, an email has been written by DCIT, Ward-3(4), Mumbai on 31-08-2021 to various Assessing Officers holding that as per audit objections, such freebies were to be taxed as income from other sources in the hands of the dealers. However, the department did not accept the audit objection and sent reply to the revenue audit. The reply of the department has been accepted and the revenue audit objection has been dropped. The said email has been verified on behalf of the department. This being so, the whole basis of reopening collapses and assessment proceedings would become nullity. Accordingly, the assessment order is quashed and impugned addition stand deleted.
5. The appeal stand allowed.
Order pronounced on 11th May, 2026.
-Sd- -Sd-
(LALIET KUMAR) (MANOJ KUMAR AGGARWAL)
JUDICIAL MEMBER ACCOUNTANT MEMBER
AS
Dated: 11-05-2026
आदे श की ितिलिप अ ेिषत /Copy of the Order forwarded to :
1. अपीलाथ /Appellant
2. थ /Respondent
3. आयकरआयु /CIT
4. िवभागीय ितिनिध/DR
5. गाडफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH