DCIT Cir.-2,, Pune v. Shri Ranee Enterprises,, Pune

ITA 1055/PUN/2008 | 2004-2005
Pronouncement Date: 31-01-2011 | Result: Allowed

Appeal Details

RSA Number 105524514 RSA 2008
Assessee PAN AACFR3523K
Bench Pune
Appeal Number ITA 1055/PUN/2008
Duration Of Justice 2 year(s) 5 month(s) 23 day(s)
Appellant DCIT Cir.-2,, Pune
Respondent Shri Ranee Enterprises,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-01-2011
Assessment Year 2004-2005
Appeal Filed On 07-08-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER I.T.A. NO. 1055 1516 TO 1518/PN/2008 A.Y. 2004-05 2000-01 TO 2002-03 DY. CIT CIR. 2 PUNE : APPELLANT VS. RANEE ENTERPRISES 94 SAHANEY SUJAN PARK PUNE-411 040 PAN AACFR 3523 K : RESPONDENT APPELLANT BY: SHRI ABHAY DAMLE RESPONDENT BY: SHRI MUKESH DOUGALL ORDER PER BENCH ALL THESE FOUR APPEALS PERTAIN TO THE SAME ASSESSEE FOR A.Y. 2004-05 2000-01 TO 2002-03 ON SIMILAR POINT. THEY ARE THEREFORE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIE NCE. ITA NO. 1055/PN/2008 FOR A.Y. 2004-05 2. THE ASSESSEE IS IN THE BUSINESS OF EXPORTING GRANITE MARBLE AND OTHER NATURAL STONES. FOR A.Y. 2004-05 A SUM OF RS. 48 19 723/- WAS DEBITED TO TH E P & L A/C ON ACCOUNT OF COMMISSION WHILE A SUM OF PAGE 2 OF 5 ITA NO. 1055 1516 TO 1518/PN/2008 RANEE ENTERPRISES A.Y. 2004-05 2000-01 TO 2002-03 RS. 81 82 192/- WAS SHOWN AS COMMISSION CLAIMED TO HAVE BEEN PAID TO ONE SHRI RANJIT S. DHILLION OF 1 118 WARVERLY DRIVE CHAMPAIGN IL 6182 FOR PROCURING ORDERS OF BUYERS FROM USA CANADA AND OTHER COUNTRIES. VIDE LETTER DATED 31-8-206 THE ASSESSE E FURNISHED THE DETAILS OF COMMISSION PAID DURING THE YEAR. THE ASSESSEE ALSO FURNISHED COPIES OF FOREIG N DRAFTS ISSUED BY PUNJAB NATIONAL BANK. SUBSEQUENT TO THIS THE ASSESSEE FURNISHED COPIES OF TWO CONFIRMA TION LETTERS FROM SHRI RANJIT S. DHILLION ALONG WITH A COPY OF LETTER OF UNDERSTANDING DATED 24-4-2008. WITH REGARDS TO EXPLAINING THE OUTSTANDING COMMISSION T HE ASSESSEE STATED THAT THE SALES EFFECTED THROUGH MR. DHILLION WERE APPROXIMATELY RS. 10 CRORES. AS THE MATERIAL HAD TO BE APPROVED BY THE CUSTOMERS AND THERE MIGHT BE SOME DISPUTE IN RESPECT TO QUALITY WEIGHT COLOUR ETC. SOME AMOUNT WAS RETAINED AS PAYABLE TO SAFEGUARD THE INTEREST OF THE ASSESSEE. EXPLAINING THE POSITION RELATING TO THE EXPENDITURE ON ACCOUNT OF COMMISSION THE ASSESSEE VIDE LETTER DA TED 1-12-2006 STATED THAT MR. DHILLION HAS ACKNOWLEDGE D AND CONFIRMED THAT THE COMMISSION RECEIPT HAS BEEN ACCOUNTED FOR IN HIS BOOKS OF ACCOUNT. THE ASSESSE E HAS ALSO FILED JOB PROFILE OF SHRI RANJIT S. DHILLI ON PAGE 3 OF 5 ITA NO. 1055 1516 TO 1518/PN/2008 RANEE ENTERPRISES A.Y. 2004-05 2000-01 TO 2002-03 WHICH INCLUDED GETTING PURCHASE ORDERS FROM THE CLIENTS IN USA/CANADA ETC. IT WAS EXPLAINED THAT THE ASSESSEE HAS MADE PAYMENT TO RANJIT S. DHILLION FOR THE SERVICES RENDERED BY HIM. HOWEVER THE ASSESSI NG OFFICER DID NOT BELIEVE THE SAME AND ACCORDINGLY TH E SAID EXPENDITURE WAS DISALLOWED. IN APPEAL RELIEF WAS GRANTED BY THE CIT(A) WHICH HAS BEEN OPPOSED BY THE REVENUE BEFORE US. 3. THE MAIN CONTENTION OF THE LEARNED DR IS THAT TH E ASSESSEE COULD NOT DISCHARGE ITS BURDEN WITH REGARD S TO THE SERVICES RENDERED BY SHRI RANJIT S. DHILLION OF USA FOR PROCURING THE ORDERS IN QUESTION FOR WHICH PAYMENT OF COMMISSION IN QUESTION WAS PAID. A GENERAL REPLY BY THE ASSESSEE IN THIS REGARD WILL N OT HELP THE ASSESSEE TO ALLOW THE EXPENDITURE IN QUEST ION. SO THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE SAME. ON THE OTHER HAND THE LEARNED AR SUPPORTED THE ORDER OF THE CIT(A). 4. DURING THE COURSE OF PROCEEDINGS BEFORE US THE LEARNED AR WAS CONFRONTED WITH REGARDS TO ESTABLISHING THE FACT OF CO-RELATION OF THE PURCHAS E ORDERS WITH THE SERVICES RENDERED BY SHRI RANJIT PAGE 4 OF 5 ITA NO. 1055 1516 TO 1518/PN/2008 RANEE ENTERPRISES A.Y. 2004-05 2000-01 TO 2002-03 DHILLION. HOWEVER THE LEARNED COUNSEL FOR THE ASSESSEE COULD NOT CO-RELATE THE SERVICES RENDERED VIS- -VIS PROCUREMENT OF THE PURCHASE ORDERS. EVEN THE CIT(A) IN HIS ORDER COULD NOT SUBSTANTIATE THE ROLE OF MR. RANJIT S. DHILLION WITH REGARDS TO FOREIGN PURCHASE ORDERS TO JUSTIFY THE COMMISSION PAID TO H IM. IN THESE CIRCUMSTANCES IT IS DIFFICULT FOR US TO U PHOLD THE ORDER OF THE CIT(A). SO IN THE INTEREST OF JUS TICE WE SET ASIDE THE ORDERS OF THE CIT(A) AND RESTORE T HE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AS PER FACT AND LAW A FTER PROVIDING DE OPPORTUNITY OF HEARING TO THE ASSESSEE . SIMILAR ISSUE AROSE IN THE APPEALS FOR THE A.Y. 200 0-01 TO 2002-03 ON THE POINT OF ALLOWABILITY OF COMMISSI ON. FACTS BEING SIMILAR SO FOLLOWING THE REASONING GIV EN WHILE DEALING WITH THE APPEAL FOR A.Y. 2004-05 IN I A NO. 1055/PN/2008 THE ISSUE RAISED IN THESE APPEALS IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFIC ER WITH SIMILAR DIRECTIONS. 5. IN THE RESULT ALL THE APPEALS FILED BY THE REVE NUE ARE ALLOWED FOR STATISTICAL PURPOSES AS INDICATED A BOVE. PAGE 5 OF 5 ITA NO. 1055 1516 TO 1518/PN/2008 RANEE ENTERPRISES A.Y. 2004-05 2000-01 TO 2002-03 ORDER PRONOUNCED IN THE OPEN COURT ON THE 31 ST DAY OF JANUARY 2011. SD/- SD/- (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 31 ST JANUARY 2011. ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-II PUNE 4. THE C.I.T. III PUNE 3. THE D.R A BENCH PUNE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE