Kumar Consumer Services Ltd.,, Baroda v. The Income tax Officer,Ward-1(2),, Baroda

ITA 2949/AHD/2010 | 2001-2002
Pronouncement Date: 29-04-2014 | Result: Dismissed

Appeal Details

RSA Number 294920514 RSA 2010
Assessee PAN AABCK6114D
Bench Ahmedabad
Appeal Number ITA 2949/AHD/2010
Duration Of Justice 3 year(s) 6 month(s)
Appellant Kumar Consumer Services Ltd.,, Baroda
Respondent The Income tax Officer,Ward-1(2),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 29-04-2014
Date Of Final Hearing 17-04-2014
Next Hearing Date 17-04-2014
Assessment Year 2001-2002
Appeal Filed On 29-10-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SRI D.K TYAGI JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI ACCOUNTAN T MEMBER KUMAR CONSUMERS SERVICES LTD. GF/54 AVISHKAR COMPLEX OLD PADRA ROAD BARODA PAN: AABCK6114D (APPELLANT) VS INCOME TAX OFFICER WARD 1(2) BARODA (RESPONDENT) ASSESSEE BY: SRI MUKUND BAKSHI A.R . REVENUE BY: SRI K.C. MATHEWS SR.D.R. DATE OF HEARING : 17-04-2014 DATE OF PRONOUNCEMENT : 29-04-2 014 / ORDER PER : D.K. TYAGI JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-IV BARODA DATED 09-08-2010 FOR ASSESSMENT YEAR 2001-02 . ITA NO. 2949/AHD/2010 ASSESSMENT YEAR 2001-02 I.T.A NO.2949/AHD/2010 A.Y. 2001-02 PAGE NO KUMAR CONSUMERS SERVICES LTD VS. ITO 2 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL:- 1. THE LD. CIT(A)-IV BARODA HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE LD. AO IN DISALLOWING AN AMOUNT OF RS. 3 42 094/- BEING 1/10 TH OF TOTAL COMMISSION PAID TO VARIOUS PARTIES AMOUNTING TO RS. 34 20 947/- ON THE GROUND THAT THE COMMISSION PAID IS EXCESSIVE. THE DISALLOWANCE OF RS. 3 42 09 4/- BEING CONTRARY TO THE FACTS AND BAD IN LAW IS PRAYED TO ALLOW THE CLAIM OF EXPENSE. 2. THE LD. CIT(A)-IV BARODA HAS ERRED IN LAW AND I N FACTS IN CONFIRMING THE ADDITION OF RS. 1 60 000/- TREATING THE SAME AS INCOME FROM UNDISCLOSED SOURCES BEING PEAK OF UNAC COUNTED TRANSACTIONS AS PER LOOSE PAPERS FOUND DURING SURVE Y OUT OF THE ADDITION OF RS. 3 16 267/- MADE BY THE LD. AO INVOK ING THE PROVISIONS OF SEC. 69D OF THE ACT. THE ADDITION OF RS. 1 60 000/- IS CONTRARY TO FACTS AND BAD IN LAW AND THEREFORE IS P RAYED TO BE DELETED. 3. FIRST GROUND RELATES TO ADDITION OF RS. 3 42 094 /- 1/10 TH OF TOTAL COMMISSION PAID TO VARIOUS PARTIES. 4. AO DURING THE ASSESSMENT PROCEEDINGS OBSERVED TH AT DURING THE YEAR UNDER APPEAL COMMISSION EXPENSES OF RS. 34 20 9047/- WERE 41% OF THE RECEIPTS AS COMPARED TO COMMISSION EXPENSES OF RS. 14 67 880/- IN THE IMMEDIATELY PRECEDING YEAR WHICH WERE 30% OF RE CEIPTS. WHEN ASSESSEE WAS ASKED TO EXPLAIN THE SUBMISSION OF TH E ASSESSEE WAS THAT IT EARNED COMMISSION BY PROVIDING CREDIT CARDS SIM OF MOBILE PHONES UNDER SCHEMES LAUNCHED BY CREDIT CARD COMPANIES/MOBILE PH ONES. FOR EARNING THIS COMMISSION/INCENTIVE ASSESSEE HAD TO PART WITH ITS EARNINGS BY WAY OF DISCOUNT AND COMMISSION WHICH WAS NECESSARY IN COMP ETITIVE MARKET. ASSESSEE ALSO FILED DETAILS OF PRODUCT-WISE AND PAR TY-WISE PAID BY HIM. I.T.A NO.2949/AHD/2010 A.Y. 2001-02 PAGE NO KUMAR CONSUMERS SERVICES LTD VS. ITO 3 AO HOWEVER MADE THE DISALLOWANCE BY OBSERVING THAT 11% INCREASE IN COMMISSION EXPENSES WITH REFERENCE TO RECEIPTS WAS HIGH PROFIT SHOWN IN THIS YEAR AS PERCENTAGE OF TOTAL TURNOVER HAD DECRE ASED BY 0.86% AND ASSESSEE WAS NOT ABLE TO CO-RELATE BUSINESS BROUGHT BY DIFFERENT PARTIES AND COMMISSION PAID TO HIM. AO THEREFORE CONSIDERE D 10% OF COMMISSION PAYMENT TO BE EXCESSIVE AND MADE DISALLOWANCE OF RS . 3 42 094/-. 5. BEFORE LD. CIT(A) ASSESSEE MADE DETAILED SUBMISS ION ON WHICH REMAND REPORT FROM THE AO WERE ALSO OBTAINED BY LD. CIT(A). ON THIS REMAND REPORT REJOINDER WAS ALSO FILED BY ASSESSEE. AFTER TAKING INTO CONSIDERATION ALL THESE MATERIALS LD. CIT(A) CONFI RMED THIS ADDITION BY HOLDING THAT SINCE THERE WERE SOME DEFICIENCIES ON THE PART OF THE ASSESSEE IN THE DETAILS FILED IN SUPPORT OF COMMISS ION PAYMENT AND SOME COMMISSION RECEIPTS WERE NOT PRODUCED FOR VERIFICAT ION 10% DISALLOWANCE OUT OF TOTAL COMMISSION IS JUSTIFIED. 6. FURTHER AGGRIEVED NOW THE ASSESSEE IS IN APPEAL BEFORE US. 7. AT THE TIME OF HEARING LEARNED COUNSEL OF THE AS SESSEE AT THE OUTSET RELIED ON THE SUBMISSION MADE BEFORE LD. CIT(A) THA T ENTIRE COMMISSION WAS PAID BY CHEQUE AND AT THE TIME OF SURVEY NOTHIN G ADVERSE WAS FOUND IN RESPECT OF COMMISSION EXPENSES. HE ALSO SUBMITTE D THAT ONE OF THE REASONS GIVEN BY AO FOR MAKING THIS DISALLOWANCE WA S THAT PROFIT SHOWN BY THE ASSESSEE DURING THE YEAR UNDER APPEAL AS PERCEN TAGE OF TOTAL TURN-OVER HAS DECREASED BY 0.86% THEREFORE HE OFFERED THAT T HIS DISALLOWANCE MAY BE RESTRICTED TO THE EXTENT OF 1% OF TURN-OVER. LD . DR ON THE OTHER HAND RELIED ON THE ORDERS OF LOWER AUTHORITIES AND SUBMI TTED THAT THERE WAS BIG RISE IN THE COMMISSION PAYMENT IN COMPARISON TO REC EIPTS OF THE ASSESSEE I.T.A NO.2949/AHD/2010 A.Y. 2001-02 PAGE NO KUMAR CONSUMERS SERVICES LTD VS. ITO 4 AND ASSESSEE HAS FAILED TO PRODUCE SUPPORTING EVIDE NCE IN SUPPORT OF THIS COMMISSION PAYMENTS DESPITE THE FACT THAT LD. CIT(A ) GAVE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE SAME TWICE. THEREFORE NO FURTHER RELIEF IS CALLED FOR IN THIS CASE. 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND THAT ADDITION HAS BEEN MADE BY THE AO BY DISALLOWING 1/1 0 TH OF COMMISSION PAID TO VARIOUS PARTIES BY THE ASSESSEE ON THE GROU ND THAT THERE WAS HUGE INCREASE UNDER THIS HEAD IN COMPARISON TO PROPORTIO NATE EXPENSES ON THIS ACCOUNT IN THE IMMEDIATELY PRECEDING YEAR WITH REFE RENCE TO RECEIPTS OF THE ASSESSEE AND ASSESSEE FAILED TO JUSTIFY THIS INCREA SE. BEFORE LD. CIT(A) ALSO ASSESSEE WAS NOT ABLE TO SATISFY HIM BY WAY OF PRODUCING SUPPORTING EVIDENCE THOUGH LD. CIT(A) GAVE AMPLE OPPORTUNITY F OR DOING THIS. BEFORE US ALSO ASSESSEE FAILED TO SUBSTANTIATE HIS CLAIM ANY FURTHER THEREFORE WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THE SAME IS HEREBY UPHELD. GROUND NO. 1 OF ASSESSEES APPEAL I S DISMISSED. 9. SECOND GROUND RELATES TO ADDITION OF RS. 3 16 26 7/- MADE BY AO WHICH HAS BEEN RESTRICTED TO 60 000/- BY LD. CIT(A ). 10. AO ON THE BASIS OF LOOSE PAPERS FOUND DURING TH E SURVEY HELD THAT ASSESSEE HAD BORROWED FOLLOWING AMOUNT IN CASH IN C ONTRAVENTION OF PROVISIONS OF SECTION 69D NAME OF PARTY DATE OF BORROWAL AMOUNT BORROWED 1. HARISH 30.01.2001 RS. 50 000/- 2. M. ZALA 2.12.2000 RS. 50 000/- I.T.A NO.2949/AHD/2010 A.Y. 2001-02 PAGE NO KUMAR CONSUMERS SERVICES LTD VS. ITO 5 3. M. ZALA 3.01.2001 RS. 50 000/- 4. N.K. MAHESH 2.12.2000 RS. 1 00 000/- 5. RAKESH MISHRA 23.2.2001 RS. 42 000/- 6. SHAILESH 18.02.2001 RS. 9 267/- 7. SHAILESH 22.03.2001 RS. 15 000/- AO REFERRED TO REPLY BY SHRI ASHWINHBHAI H PATEL TO QUESTION NO.10 OF HIS STATEMENT DATED 24-01-2002 AND QUESTION NO. 2 OF HI S STATEMENT DATED 28- 01-2002 AT THE TIME OF SURVEY U/S. 133A AND HELD TH AT ASSESSEE-COMPANY WAS IN THE HABIT OF BORROWING AMOUNTS ON HUNDI. AO MADE AN ADDITION OF RS. 3 16 267/- U/S. 69D. 11. LD. CIT(A) AFTER TAKING INTO CONSIDERATION THIS SUBMISSION OF THE ASSESSEE WHICH HAS BEEN REPRODUCED BY HIM IN PARA 3 .1 OF HIS ORDER HELD THAT AO WAS NOT JUSTIFIED IN INVOKING THE PROVISION S OF SECTION 69D IN THIS CASE. HE HOWEVER WAS OF THE VIEW THAT TRANSACTIONS RECORDED IN THE LOOSE PAPERS IN THE NAMES OF SAILESH M ZALA HARISH ETC WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS AND IN THE STATEMENTS RECORDE D AT THE TIME OF SURVEY ALSO IT WAS NOT DENIED THAT THESE LOOSE PAPERS CONT AIN REAL TRANSACTION. THE CASH RECEIPTS RECORDED IN THESE LOOSE PAPERS TH EREFORE CONSTITUTE ASSESSEES INCOME UNLESS SHOWN TO BE ACCOUNTED FOR AND NATURE OF TRANSACTIONS SATISFACTORILY EXPLAINED. SINCE ASSES SEE DID NOT DISCHARGE THIS ONUS THE ADDITION OF PEAK OF THESE TRANSACTIO NS WHICH COMES TO RS. 1 60 000/- (WORKED OUT BY ASSESSEE HIMSELF) WAS DIR ECTED TO BE MADE. WE FIND NO INFIRMITY IN SUCH DIRECTION OF THE LD. CIT( A) AS ASSESSEE HIMSELF HAS AGREED TO THIS ADDITION IN HIS WRITTEN SUBMISSION B EFORE LD. CIT(A) AND THE SAME IS HEREBY UPHELD. SO THIS GROUND OF ASSESSEE IS ALSO DISMISSED. I.T.A NO.2949/AHD/2010 A.Y. 2001-02 PAGE NO KUMAR CONSUMERS SERVICES LTD VS. ITO 6 12. IN THE RESULT ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 29/04/2014 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER/ /