Gulf Oil Corporation Ltd.,, Hyderabad v. ACIT, Hyderabad

ITA 1364/HYD/2008 | 2004-2005
Pronouncement Date: 22-11-2011 | Result: Allowed

Appeal Details

RSA Number 136422514 RSA 2008
Assessee PAN AAACG8433B
Bench Hyderabad
Appeal Number ITA 1364/HYD/2008
Duration Of Justice 3 year(s) 3 month(s) 9 day(s)
Appellant Gulf Oil Corporation Ltd.,, Hyderabad
Respondent ACIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 22-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 22-11-2011
Date Of Final Hearing 18-07-2011
Next Hearing Date 18-07-2011
Assessment Year 2004-2005
Appeal Filed On 12-08-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A' HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEM BER ITA NO.1364/HYD/2008 : ASSESSMENT YEAR 2004-05 M/S.GULF OIL CORPORATION LTD. HYDERABAD ( PAN - AAACG 8433 B ) V/S. ASST. COMMISSIONER OF INCOME-TAX CIRCLE 2(3) HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI Y.RATNAKAR RESPONDENT BY : SHRI T.VENKAT REDDY DATE OF HEARING 15.11.2011 DATE OF PRONOUNCEMENT 22.11.2011 O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-III HYDERABAD D ATED 9.6.2008 FOR THE ASSESSMENT YEAR 2004-05. 2. ORIGINALLY THIS APPEAL HAS BEEN DISPOSED OF BY THIS TRIBUNAL BY ITS ORDER DATED 18 TH DECEMBER 2009. LATER ASSESSEE FILED A MISCELLANE OUS APPLICATION BEING M..A.NO.38/HYD/2010 SEEKING REC ALL OF THE ORDER DATED 18.12.2009 INSOFAR AS IT RELATED TO ISSUE OF PAYME NT OF COMMISSION RAISED IN GROUNDS NO.7 AND 8 AND ALSO WITH REGARD TO ISSUE OF VALUATION OF LAND AS ON 1.4.1981 RAISED IN GROUND N.16 TO 19. THE TRIBUNA L ACCEDED TO THE REQUEST OF THE ASSESSEE AND RECALLED THE ORDER OF THE TRIBUNA L DATED 18.12.2009 IN ITA NO.1364/HYD/08 M/S. GUL F OIL CORPORATION LTD. HYDERABAD 2 RELATION TO THE ABOVE TWO ISSUES VIDE ITS ORDER DA TED 7 TH MAY 22010 WITH THE FOLLOWING OBSERVATIONS- 3. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. WE AGREE WITH THE CON TENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. WHILE DISPOSING OF THE AP PEAL THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE RELATING TO THE ISSU E OF DISALLOWANCE OF COMMISSION PAYMENT WAS CONSIDERED AS ADDITIONAL EVI DENCE WITH REGARD TO THE VALUATION OF LAND AS ON 1.4.1981. THE COURT OPINED THAT SUCH A MISTAKE CAN BE SAID TO BE A MISTAKE APPARENT FROM R ECORD WHICH COULD BE RECTIFIED UNDER SECTION254(2) OF THE ACT. AFTER CON SIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTERES T OF JUSTICE WE FEEL IT PROPER TO RECALL THE ORDER OF THE TRIBUNAL DATED 18 -12-2009 IN RELATION TO ONLY TWO ISSUES VIZ. GROUND NOS.7 TO 8 (DISALLOWA NCE OF COMMISSION) AND GROUND NOS.16 TO 19(VALUATION OF LAND AS ON 1.4 .1981) AND DIRECT THE REGISTRY TO FIX THE APPEAL FOR FRESH HEARING ON ANY DATE IN THE MONTH OF JUNE 2010. WE ORDER ACCORDINGLY. 3. IN VIEW OF THE ABOVE THE ORDER WAS RECALLED FO R THE LIMITED PURPOSE OF ADJUDICATING AFRESH GROUNDS NO.7 AND 8 AND 16 TO 19 AND ACCORDINGLY APPEAL WAS FIXED FOR HEARING. 4. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE HAS NO GRIEVANCE WITH REGARD TO G ROUND NOS.16 TO 19 AS THE ISSUE RELATING TO THE VALUATION OF LAND AS ON 1.4.1 981 WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION TAKIN G INTO ACCOUNT COMPARABLE CASES. HOWEVER HE PLEADED THAT THE ISSUE RELATING TO PAYMENT OF COMMISSION RAISED IN GROUNDS NO.7 AND 8 HAS TO BE DECIDED AFRE SH IN THE LIGHT OF THE ADDITIONAL EVIDENCE FILED BEFORE THE TRIBUNAL ON EA RLIER OCCASION. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON TH E OTHER HAND STRONGLY SUPPORTED THE EARLIER ORDER OF THE TRIBUNA L WHEREIN THE GROUNDS OF THE ASSESSEE ON THIS ISSUE ARE REJECTED. ITA NO.1364/HYD/08 M/S. GUL F OIL CORPORATION LTD. HYDERABAD 3 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. IN THIS CASE THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE TH ROUGH A PETITION UNDER RULE 29 OF THE APPELLATE TRIBUNAL RULES 1962 AND ALSO F ILED A SWORN AFFIDAVIT SUPPORTING THE CLAIM OF THE ASSESSEE. WE HAVE GONE THROUGH THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WHEREIN THE EMPLOYE R OF SHRI V.G. GURNANI NAMELY M/S. AASIA MANAGEMENT & CONSULTANCY (P) LTD . MUMBAI FILED A CONFIRMATION LETTER DATED JULY 22 2009 STATING TH AT SHRI V.G.GURNANI HAS ASSISTED THE ASSESSEE IN THE DEVELOPMENT OF ITS PR OPERTY AT 2 ND MAIN ROAD 18 TH CROSS SANKEY ROAD MALLESWAAM AND HE RENDERED SER VICE IN CONCLUSION OF THE PURCHASE OF THE PROPERTY AND AS SUCH THE COMP ANY RECEIVED THE PAYMENTS AS FOLLOWS- DATE OF RECEIPT CHEQUE NO. AMOUNT(RS. 24.11.2003 103992 50 00 000 11.06.2004 437252 28 06 400 06.05.2004 RTGS 23 71 875 17.05. 20 04 RTGS 22 88 298 THESE PAYMENTS WERE DULY REFLECTED IN THE RETURN OF INCOME FILED BY M/S. AASIA MANAGEMENT & CONSULTANCY P. LTD. AND AS SUCH DEDU CTION TOWARDS PAYMENT OF COMMISSION OF RS.61 LAKHS HAS TO BE ALLOWED TO T HE ASSESSEE. 7. THE TRIBUNAL HAS REJECTED THE GROUNDS OF THE AS SESSEE ON THE ISSUE OF COMMISSION PAYMENT FOR THE FOLLOWING REASONS- 11. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F BOTH THE PARTIES WITH REFERENCE TO THE ISSUE INVOLVED AND MA TERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACT IN THE CASE UNDER CO NSIDERATION IS THAT THE AGREEMENT TO PAY THE COMMISSION WAS ENTERE D BY THE ASSESSEE ABOUT THREE MONTHS AFTER THE DATE OF SALE. THE CLAIM OF THE ASSESSEE IS THAT THE AMC RENDERED ITS SERVICE O NLY ON THE ASSESSEES ORAL REQUEST. IN OUR VIEW THE ASSESSEE BEING A REPUTED ITA NO.1364/HYD/08 M/S. GUL F OIL CORPORATION LTD. HYDERABAD 4 COMPANY AND THE ASSESSEE WOULD NOT HAVE ENTERED AN Y ORAL UNDERSTANDING WITH ANOTHER COMPANY THAT TOO IMPORT ANT MATTERS LIKE MAJOR PROPERTY DEAL. THE ASSESSEE FAILED TO PR ODUCE ANY PROPER EVIDENCE OF ANY SPECIFIC SERIES HAVING BEEN RENDERED BY THE AMC TO THE ASSESSEE COMPANY IN RELATION TO TRANSACT 8ION OF SALE OF PROPERTY. EVEN IN CASES WHERE THE IDENTITY OF THE P AYEE AND THE FACTUM OF PAYMENT IS ESTABLISHED THE PAYMENT CANNO T BE ALLOWED AS EXPENDITURE UNLESS THERE IS EVIDENCE OF SERVICES RENDERED IN CONNECTION WITH THE TRANSACTION. THE SAME PRINCIPL E HAS TO BE APPLIED WITH REGARD TO ALLOWABILITY OF COMMISSION IN COMPUTING THE CAPITAL GAINS. IN OUR CONSIDERED VIEW ENTERING OF COMMISSION AGREEMENT AT A LATER DATE IS ONLY AFTER THOUGHT AND HENCE THE COMMISSION PAYM ENT IS NOT ALLOWABLE AS DEDUCTION. IN VIEW OF THE ABOVE WE ARE IN AGREEMENT WITH THE VIEW TAKEN BY T HE LOWER AUTHORITIES AND ACCORDINGLY WE CONFIRM THE DISALLOW ANCE OF RS.61 LAKHS MADE BY THE LOWER AUTHORITIES AND DISMISS THE GROUND OF THE ASSESSEE. 8. HOWEVER THE TRIBUNAL HAS NOT CONSIDERED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. IN VIEW OF THIS AND CONSIDE RING THE SIGNIFICANCE OF THE ADDITIONAL EVIDENCE FILED WHICH HAS A BEARING ON T HE DETERMINATION OF THE ISSUE WE SET ASIDE THE IMPUGNED ORDERS OF THE LOWER AUTHO RITIES ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFF ICER FOR A FRESH DECISION TAKING INTO ACCOUNT THE ADDITIONAL EVIDENCE FILED IN ACC ORDANCE WITH LAW AND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASS ESSEE. THE ASSESSING OFFICER IS DIRECTED TO EXAMINE SHRI V.G.GURNANI PRESIDENT (REAL ESTATE) OF AASIA MANAGEMENT & CONSULTANCY P. LTD. TO ASCERTAIN TH E GENUINENESS OF THE CLAIM OF THE ASSESSEE WITH REGARD TO THE NATURE AND SIGNI FICANCE OF SERVICES RENDERED BY HIM TO THE ASSESSEE IN FINALIZING THE TRANSACTIO N RELATING TO PURCHASE OF PROPERTY SITUATED AT 2 ND MAIN ROAD 18 TH CROSS SANKEY ROAD MALLESWARAM BANGALORE AND ALLOW SUCH COMMISSION AS MAY BE FELT REASONABLE AND PROPORTIONATE TO THE SERVICES WHICH MAY BE FOUND TO HAVE BEEN RENDERED BY SHRI GURNANI. ASSESSEE IS DIRECTED TO COOPERATE W ITH THE ASSESSING OFFICER AND SUBSTANTIATE ITS CLAIM FOR COMMISSION BEFORE THE AS SESSING OFFICER BY ADDUCING NECESSARY EVIDENCE WITH REGARD TO THE SERVICES REND ERED BY SHRI GURNANI. ASSESSEES GROUNDS NO.7 AND 8 ON THIS ISSUE ARE AC CORDINGLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1364/HYD/08 M/S. GUL F OIL CORPORATION LTD. HYDERABAD 5 9. IN THE RESULT READ WITH THE EARLIER ORDER OF T HIS TRIBUNAL DATED 18.12.2009 APPEAL OF THE ASSESSEE IS PARTLY ALLOWE D. ORDER PRONOUNCED IN THE COURT ON 22.1 1.2011 SD/- SD/- (ASHA VIJAYARAGHAVAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/- 22 ND NOVEMBER 2011 COPY FORWARDED TO: 1. M/S. GULF OIL CORPORATION LTD. KUKATPALLI MP/1. S ANATHNAGAR (IE)(PO) HYDERABAD 500 018. 2. ASST. COMMISSIONER OF INCOME - TAX CIRCLE 2 ( 3 ) HYDERABAD. 3. COMMISSIONER OF INCOME - TAX(APPEALS) - I II HYDERABAD. 4. COMMISSIONER OF INCOME - TAX I I HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. B.V.S.