[2015] 173 TTJ (Pune)(UO) 17 Bhavarlal Hiralal Jain & Others vs. DCIT ITA No. 735 to 738 & 778 to 780/Pn/2013 Assessment Year: 2009-10. Date of Order: 28th November, 2014

Facts
The Assessing Officer noticed that a company Jain Irrigation Systems Ltd. (JISL) had paid a sum of Rs. 2,79,000 as consultancy fees to Mr. Wohra, a Chartered Accountant. The said Chartered Accountant had also attended various matters of the assessee and his family members. He had filed returns of 5 gentlemen and 4 lady members of the family of the assessee but had not charged any amount for services rendered to the assessee and his family members. Since the assessee was a director of the company JISL, the Assessing Officer regarded a sum of Rs. 10,000 as a perquisite taxable u/s. 2(24)(iv) of the Act and included it in the total income of the assessee.

Aggrieved, the assessee preferred an appeal to the CIT(A) who upheld the action of the AO.

Aggrieved, the assessee preferred an appeal to the Tribunal.

Held
It is not mandatory or compulsory for any professional to charge for professional services rendered to any director or relative of a director or close family members of directors when he is getting fees for rendering services to a company. He may do it voluntarily and free of cost as well. The Tribunal observed that there is no material on record to show that the company has paid any amount to the consultant on behalf of the assessee.

In the absence of any material on record to show that the company has paid any amount to its consultant specifically for the services rendered by him in connection with the individual tax matters of the assessee and other family members of the assessee, no part of the remuneration paid by the company was held to be assessable as perquisite in the hands of the assessee.

This ground of appeal of the assessee was allowed.