M/s D. D. Infotech, Kolkata v. Income Tax Officer -ward 50(1), Kolkata, Kolkata

ITA 30/KOL/2014 | 2007-2008
Pronouncement Date: 28-10-2016

Appeal Details

RSA Number 3023514 RSA 2014
Assessee PAN AAFFD9070L
Bench Kolkata
Appeal Number ITA 30/KOL/2014
Duration Of Justice 2 year(s) 9 month(s) 21 day(s)
Appellant M/s D. D. Infotech, Kolkata
Respondent Income Tax Officer -ward 50(1), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Bench Allotted SMC
Tribunal Order Date 28-10-2016
Date Of Final Hearing 29-08-2016
Next Hearing Date 29-08-2016
Assessment Year 2007-2008
Appeal Filed On 07-01-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENC H KOLKATA BEFORE SHRI K. NARASIMHA CHARY JM & DR. A.L.SAINI AM ./ ITA NOS.30 & 31/KOL/2014 ( / ASSESSMENT YEAR :2007-08 & 2008-09) M/S D.D.INFOTECH 79/1 K.N.C.ROAD BARASAT NORTH 24 PARGANAS-700124 VS. ITO WARD-50(1) KOLKATA ./ ./PAN/GIR NO. : AAFFD 9070 L ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI SUVAM DAS ADVOCATE /REVENUE BY : SHRI PINAKI MUKHARJEE JCIT / DATE OF HEARING : 21/10/2016 /DATE OF PRONOUNCEMENT 28/10/2016 / O R D E R PER DR. ARJUN LAL SAINI AM: THE CAPTIONED ABOVE CITED TWO APPEALS FILED BY THE ASSESSEE PERTAINING TO THE ASSESSMENT YEARS 2007-2008 & 2008 -09 ARE DIRECTED AGAINST THE ORDERS PASSED BY LD. COMMISSIONER OF IN COME TAX (APPEALS)- XXXII KOLKATA IN APPEAL NOS.33&34/XXXII/10-11/50( 1)/KOL DATED 17.09.2013 WHICH IN TURN ARISE OUT OF ASSESSMENT O RDERS PASSED BY THE ASSESSING OFFICER (AO) UNDER SECTION143(3)/147 OF T HE INCOME TAX ACT 1961 (IN SHORT THE ACT) DATED 08.06.210. 2. THE ABOVE MENTIONED TO APPEALS RELATE TO SAME AS SESSEE DIFFERENT ASSESSMENT YEARS COMMON ISSUES INVOLVED THEREFORE THESE HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. BRIEF FACTS OF THE CASE QUA THE ISSUE IS THAT TH E AO HAS ADDED A SUM OF RS.10 30 926/- FOR ASSESSMENT YEAR 2007-08 A ND RS.9 28 440/- FOR ITA NOS.30&31/14 D.D.INFOTECH 2 ASSESSMENT YEAR 2008-09 ON ACCOUNT OF NON-DEDUCTIO N OF TDS WHILE MAKING PAYMENT ON ACCOUNT OF COMMISSION. 4. AGGRIEVED FROM THE ORDER OF AO THE ASSESSEE FIL ED APPEALS BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE ADDITION MADE BY THE AO FOR BOTH THE ASSESSMENT YEARS OBSERVING THE FOLLOWINGS :- GROUND NO.1: BY THIS COMBINED GROUND THE ASSESSEE CHALLENGES THE DISALLOWANCE/ADDITION OF RS.71 587/- RS.7 15 0 00/- AND RS.10 70 926/- BEING DIFFERENCE IN TDS AMOUNTS FRE SH INTRODUCTION OF CAPITAL BY ONE OF THE PARTNER AND COMMISSION PAY MENT RESPECTIVELY. THE ASSESSEE HAS CLAIMED THAT THOUGH M/S. FORBES IN FOTAINMENT LTD. ISSUED COMMISSION PAYMENT OF RS.14 96 531/- T HE COMPANY HAD ISSUED DEBIT NOTES FOR RS.23 190/- & RS.48 397/ - ON 07.02.2007 & 10.01.07 TOTALLING RS.71 587/- AND ACCORDINGLY TH E COMMISSION WAS LESS DECLARED BY THE ASSESSEE. THE ASSESSEE FIL ED THE DEBIT NOTES DURING THE APPELLATE PROCEEDINGS AND THESE WE RE ALSO FORWARDED TO THE A.O. FOR COMMENTS. AS THE A.O. HAS ALSO NOT OBJECTED TO THESE FACTS THE ADDITION OF RS.71 587/ - IS DELETED. THE NEXT ADDITION IS THE ADDITION OF RS.7 15 000/- MADE ON ACCOUNT OF INTRODUCTION OF FRESH CAPITAL BY MR. DIBYENDU DU TTA A PARTNER. THE ASSESSEE HAS CLAIMED THAT IT IS IN THE BUSINESS OF ONLINE LOTTERY (LOTTO) AND IT WAS REQUIRED TO PAY A SECURITY DEPOS IT TO M/S. FORBES INFOTAINMENT LTD. IT WAS CLAIMED THAT SINCE ON 02.0 5.2006 THE FIRM HAD NO BANK. ACCOUNT A PAYMENT OF RS.7 04 450/- WA S MADE BY SRI DIBYENDU DUTTA FROM HIS OWN BANK ACCOUNT NO.01600/0 50512 WITH THE STATE BANK OF INDIA BARASAT BRANCH. A FURTHER SUM OF RS.12.550/- WAS DECLARED SPENT BY HIM IN CASH FROM HIS PROPRIETARY BUSINESS M/S. AKASH ENTERPRISE FOR THE PURPOSES OF THE FIRM. IN THE REMAND REPORT THE A.O. HAS NOT QUESTIONED TH E SUBMISSION OF THE ASSESSEE AND THE A.O. ALSO HAS NOT MADE ANY VER IFICATION AS HE WAS SUPPOSED TO. THE A.O. HAS WRONGLY RELIED ON CER TAIN NON- SPEAKING DOCUMENTS EG. A COPY OF A BANK STATEMENT W HICH DOES NOT MENTION ANY CUSTOMER`S NAME. NO VERIFICATION WAS DO NE BY THE A.O. REGARDING THE IMMEDIATE SOURCES OF THE FUNDS NO VERIFICATION WAS DONE FROM THE M/S. FORBES INFOTAINMENT LTD. AND THE BOOKS OF THE ASSESSEE OR OF THE PARTNER ALSO WERE NOT VERIFI ED. THE A.O. HAS FURTHER RELIED ON A LETTER DATED NIL ADDRESSED TO T HE A.O. WHEREIN SRI DIBYENDU DUTTA MERELY MENTIONS THAT THE ABOVE PAYME NT WERE MADE BY HIM FROM HIS BANK ACCOUNT OF HIS PROPRIETAR Y BUSINESS M/S. AKASH ENTERPRISES. THE FIRM`S BANK ACCOUNT NO. WAS GIVEN IN THE LETTER AND THE FINAL ACCOUNTS OF M/S. AKASH ENTERPR ISES WAS ALSO FILED. HOWEVER IT IS NOTED THAT THE BALANCE SHEET OF M/S. AKASH ITA NOS.30&31/14 D.D.INFOTECH 3 ENTERPRISE DOES NOT MENTION SB A/C. NO.011600/05051 2. THE BALANCE SHEET MENTION THE ACCOUNT NUMBER AS SB ALC. NO.11217060779 & 01660/062338. FURTHER THE BALANCE SHEET OF M/S. AKASH ENTERPRISE DOES NOT DECLARE ANY SUBSTANT IAL DRAWINGS FROM THE CAPITAL ACCOUNT OF SRI DIBYENDU DUTTA. THE TOTAL DRAWING DECLARED IS ONLY RS.60.000/-. ALSO THE PERSONAL BAL ANCE SHEET OF SRI DIBYENDU DUTTA WAS NOT FILED. [IT IS ALSO SEEN THAT A BUSINESS INVESTMENT OF RS.8.14.605/- IS DECLARED ON THE ASSE T ASIDE OF THE BALANCE SHEET OF M/S. AKASH ENTERPRISE BUT IT IS NO T CONSIDERED SINCE THE INVESTMENT IN THE FIRM M/S. D.D. LNFOTECH IS NOT MADE IN THE NAME OF M/S. AKASH ENTERPRISE]. AS THE A/R HAS ALSO NOT FILED ANY EVIDENCE BEFORE THE UNDERSIGNED ( THE BANK ALC. THE PAPERS OF M/S. AKASH ENTERPRISE WERE FILED ONLY BEFORE THE A. O.). THE ADDITION OF RS.7 15 000/- IS CONFIRMED ON THE GROUND THAT TH E ASSESSEE HAS NOT BEEN ABLE TO DISCHARGE THE ONUS OF PROVING THE CAPACITY OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTIONS. AS REGARDS THE PAYMENT OF COMMISSION OF RS.10 30 92 6/- THE ASSESSEE HAD NOT MADE ANY SUBMISSION BEFORE THE A.O . HOWEVER. DURING THE APPELLATE PROCEEDINGS THE ASSESSEE CLAIM ED FOR THE FIRST TIME THAT THE COMMISSION WAS PAID TO STAFF OF THE A SSESSEE. THE ASSESSEE HAS CLAIMED THAT ALL THE STAFF ARE ENGAGED FOR THE PURPOSE OF SELLING LOTTO MACHINE TO THE RETAILERS FOR AND O N BELIEF OF THE FIRM/APPELLANT AND THE FIRM/APPELLANT EARNED COMMIS SION FROM THE COMPANY ON THE BASIS OF SALES ACTIVITY. HOWEVER BE FORE THE A.O. DURING THE REMAND PROCEEDINGS THE 'STAFF WHO ATTE NDED CLAIMED THAT THEY DISTRIBUTED MAXIMUM AMOUNT OF THE RECEIVE D COMMISSION AMONG THE RETAILERS AND OPERATORS FOR THE PURPOSE O F SELLING OF LOTTO MACHINES. BUT NEITHER IN THE ASSESSMENT PROCEEDINGS NOR IN THE APPELLATE PROCEEDING AND ALSO NOT EVEN DURING THE R EMAND PROCEEDINGS THE ASSESSEE OR ITS 'STAFF GAVE ANY DET AILS OF THE SALES EFFECTED PARTYWISE BY EACH EMPLOYEE WHO HAD RECEIVE D THE COMMISSION. FURTHER THEY HAVE NOT GIVEN ANY DETAILS OF THE PARTIES TO WHOM THEY SUPPOSEDLY PASSED OVER THE COMMISSION TO. THE BUSINESS OF ONLINE LOTTERY OF M/S. FORBES INFOTAINM ENT LTD WORKED ON INSTALLATION OF LOTTERY TERMINALS WHERE THE ORDINAR Y PEOPLE CAN PLAY THE LOTTERY. IN THIS BUSINESS THE RETAILERS & DISTR IBUTOR PLACE A DEPOSIT WITH THE COMPANY AGAINST THE TERMINAL INSTALLED WH ICH WAS RETURNED BACK BY M/S. FORBES INFOTAINMENT LTD. IN EXCHANGE F OR THE TERMINALS WHEN M/S. FORBES INFOTAINMENT SHUT SHOP. THEREFORE IT IS NOT CLEAR WHY THE ASSESSEE IS REQUIRED TO PAY COMMISSION FOR 'SALES'. (THE RETAILERS WERE EARNING A COMMISSION ON THE LOTTERY PLAYED THROUGH THE LOTTO MACHINES INSTALLED IN THEIR PREMISES AND THEY CERTAINLY DO NOT REQUIRE TO BE PAID.) THUS IN THE ABSENCE OF THE COMPELLING NEED AND EVIDENCE IT IS HELD THAT THE COMMISSION HAS NOT BEEN PAID TO THE EMPLOYEES AND THE EXPLANATION IS ONLY A PLOY TO RED UCE TAXABLE INCOME. BY THIS METHOD THE ASSESSEE HAD INCURRED EX PENDITURE OF RS. 1 0 30 926/- AGAINST TOTAL COMMISSION RECEIPTS OF RS.14.24.944/- THE BUSINESS MODEL OF M/S. FORBES LNFOTAINMENT LTD. IS TO ALLOW THE DISTRIBUTORS AND RETAILIERS TO EARN COMMISSION BASE D ON THE AMOUNT ITA NOS.30&31/14 D.D.INFOTECH 4 OF LOTTERY PLAYED ON THE LOTTERY MACHINES DISTRIBUT ED AND INSTALLED ON THE PREMISES RESPECTIVELY. IN ADDITION TO THE GENERAL ARGUMENTS ABOVE THE CAS E PRESENTS SOME SERIOUS PROBLEM. THERE IS NO RELIABILITY OF TH E REPLIES OF THE ASSESSEE DURING THE APPELLATE AS WELL AS DURING THE REMAND PROCEEDINGS. HERE IT IS NECESSARY TO MENTION THAT T HE AUDITOR OF THE ASSESSEE M/S. DAS & ASSOCIATES HAD FILED AN EXPLANA TION REGARDING THE DISCREPANCY ON AUDIT REPORT FOR F.Y.2007-08 COR RESPONDING TO A.Y. 2008-09 DATED 17.10.2009. THE SAME IS EXTRACTE D AS BELOW: 'I HAVE RECEIVED AN QUERY FROM SRI DIBYENDU DUTTA. PARTNER OF M/S. D.D. INFOTECH OF K N C. ROAD BARASAT NORTHH-24 PA RGANAS. KOLKATA-700 1124 BEING PAN NO.AAFFD9070L ON 10-10-2 009 REGARDING EXPLANATION OF COMMISSION PAID TO STAFF. I HAVE CAREFULLY EXAMINED THE BOOKS OF ACCOUNTS AND COPY OF FINAL AC COUNTS ALONG WITH P & L A/C. AS PER LEDGER OF THE ASSESSEE IN PA GE NO.26 AND PAGE NO.27 IT IS CLEAR THAT THE ASSESSEE PAID A SUM OF RS.42.000/- TOWARDS SALARY TO 5(FIVE) STAFF NAMELY (A) AJOY KUM AR MONDAL. (H) ANUP KUMAR DUTTA. CC) CHANDAN SAHA (D) SANKAR CHOWD HURY. (E) GURPREET SINGH. IT IS EXPLAINED THAT I HAVE MADE AN AUDIT REPORT DU RING THE PAID IN RESPECT OF THE ASSESSEE FIRM ON 19-09-2008 OF WHICH COMMISSION PAID HAS SHOWN A SUM OF RS.9.28.440.00 IN PLACE OF RS.8 86 440.00. ACTUALLY MY STAFF SRI NARENDRA NATH DAS WAS COMMITTED A MISTAKE IN TYPING WHILE THE ACTUAL HEAD IN PROFIT & LOSS ALE SHOULD BE COMMISSION & SALARY PAID OF RS 9 28 4 40.00 IN PLACE OF WRONGLY TYPING AS COMMISSION PAID OF RS. 9 28 44 0. 00. THE SAID COMMISSION & SALARY PAID IS DIVIDED AS COMMISSION P AID RS.8 86 440.00 AND SALARY PAID RS.42 000/-. THEREFORE IN MY/OUR OPINION THE ABOVE EXPLANATION M AY BE RECTIFIED AND ADDRESSED AS ANNEXURE OF MY AUDIT REPORT DATED 19-09-2008 (EMPHASIS SUPPLIED). 5. NOT BEING SATISFIED WITH THE ORDER OF CIT(A) TH E ASSESSEE IS IN FURTHER APPEALS ( FOR THE ABOVE MENTIONED ASSESSMEN T YEARS) BEFORE US AND HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1). FOR THE FACT AND CIRCUMSTANCES THE CIT (APPEAL S) FAILED TO CONSIDER THE REMAND REPORT OF THE AO WHICH HE GATHE RED FROM THE ENQUIRY MADE BY HIM DURING THE COURSE OF HEARING. H E CONFIRMED THE ORDER OF THE AO ON THE GROUND OF ADDITION MADE BY HIM FOR INTRODUCED CAPITAL OF A PARTNER AMOUNTING TO RS. 7 15 000/- WHICH MAY BE DELETED. ITA NOS.30&31/14 D.D.INFOTECH 5 2). FOR THE FACT AND CIRCUMSTANCES THE CIT APPEALS FAILED TO CONSIDER A SUM OF RS. 10 36 926/- ON ACCOUNT OF NON DEDUCTION OF TDS FROM THE COMMISSION PAYMENT TO OTHERS. BUT IT I S NOT A FACT THAT THE COMMISSION PAYMENT MADE TO OTHERS IT WAS PAID TO THE STAFF OF THE APPELLANT ONLY WHICH MAY BE DELETED. 3). AND YOUR PETITIONER CRAVES LEAVES TO AMEND AL TER RECTIFY ETC. THE GROUNDS OF APPEAL ON OR BEFORE HEARING. 6. SINCE THE ISSUE IS IDENTICAL IN BOTH THE APPEALS THEREFORE WE TAKE THE BASE OF ITA NO.30/KOL/2014 AS THE LEAD CASE. 7. IN REVISED GROUNDS OF BOTH THE APPEALS THE SAME ISSUE IS INVOLVED THEREFORE A CONSOLIDATED SUBMISSION IS MADE BY THE LD. AR OF THE ASSESSEE. LD. AR FOR THE ASSESSEE HAS SUBMITTED BEF ORE US THAT : SUBMISSION FOR GROUND NO. 1 ( ITA 30/KOL/2014) A) IT IS SUBMITTED BY YOUR APPELLANT THAT THE ASSES SING OFFICER ADDED A SUM OF RS. 7 15 000/- ON ACCOUNT OF A PARTNER SRI DIBYE NDU DUTTA AS UNEXPLAINED U/S 68. IT IS ALSO SUBMITTED BY THE APP ELLANT THAT THE CIT (AL ASKED THE ASSESSING OFFICER TO PRODUCE REMAND REPOR T IN THIS MATTER. THE ASSESSING OFFICER CALLED FOR CLARIFICATION OF THE A SSESSEE WITH REGARD TO THE SUBMISSION IN THE APPEAL. DURING THE COURSE OF HEAR ING BEFORE THE ASSESSING OFFICER THE ASSESSEE/APPELLANT PRODUCED ALL RELEVANT DOCUMENTS SUCH AS BANK STATEMENT AUDIT REPORT OF HIS PERSONAL BUSINESS NAMELY 'AKASH ENTERPRISE' ETC. AND ON PERUSAL OF AL L THE DOCUMENTS THE ASSESSING OFFICER HAS BEEN SATISFIED THAT THE INTRO DUCTION CAPITAL OF RS.7 15 000/- IS NOT UNEXPLAINED. BUT THE CIT (A) DID NOT CONSIDER THE REMAND REPORT OF THE ASSESSING OFFICER ON THE GROUND THAT THE BANK ACCOUNT OF WHIC H CHEQUE WAS ISSUED TO THE APPELLANT FIRM AS INTRODUCTION OF CAPITAL OF SAID SRI DIBYENDU DUTTA PARTNER OF THE APPELLANT FIRM IS NOT SHOWN IN THE B ALANCE SHEET OF AKASH ENTERPRISE AND SAID PARTNER SRI DIBYENDU DUTTA DI D NOT WITHDRAW SAID SUM FROM HIS BUSINESS. AS SUCH HE CONFIRM THE ASSES SMENT ORDER OF THE A.O. YOUR APPELLANT BEG TO SUBMIT THAT IN THE REMAND REP ORT THE ASSESSING OFFICER RIGHTLY OBSERVED THAT THE PARTNER OF THE AP PELLANT FIRM SRI DIBYENDU DUTTA INTRODUCED HIS CAPITAL OF RS.7 15 000/= INTO THE FIRM FROM HIS OWN FUND WHICH COLLABORATED HIS BANK ACCOUNT AS WELL AS THE AUDIT REPORT OF THE SAID AKASH ENTERPRISE AND ALSO IT WAS ALREADY SHOWN IN HIS OWN AUDIT REPORT AT THE ASSESSTS SIDE OF BALANCE SHEET SO QU ESTION OF WITHDRAWAL OF SAID AMOUNT IS NOT PERMISSIBLE UNDER ACCOUNTS SYSTE M ITA NOS.30&31/14 D.D.INFOTECH 6 ASSESSEE ALREADY MADE DECLARATION BEFORE THE INCOME TAX DEPARTMENT REGARDING HIS INVESTMENT AND ALSO THE SAID BANK ACC OUNT IS NOT THE BUSINESS ACCOUNT AND THUS IT CANNOT BE SAID THAT AS UNEXPLAINED WITH THE PROVISION OF SECTION 68. SUBMISSION FOR GROUND NO. 2 OF ITA 30/KOL/2014 A ND GROUND NO. 1 OF ITA 31/KOL/2014) B).THE ASSESSING OFFICER ADDED A SUM OF RS.10 30 92 6/- ON ACCOUNT OF NON-DEDUCTION OF TDS WHILE MAKING THE PAYMENT ON AC COUNT OF COMMISSION. THE APPELLANT SUBMITS BEFORE THE CIT (A ) THAT THE SAID COMMISSION PAID TO HIS STAFF AND THUS IT WAS NOT AT TRACTED SECTION 40(A)(IA) OF THE INCOME TAX ACT. IN THE REMAND REPORT THE AS SESSING OFFICER OBSERVED THAT AS THE ASSESSEE FAILED TO PRODUCED BO OKS OF ACCOUNTS SALARY REGISTER ETC. BEFORE THE ASSESSING OFFICER D URING THE COURSE OF HEARING U/S 143(2) HE MADE THIS ADDITION. BUT DUR ING THE HEARING UNDER REMAND REPORT ASSESSEE PRODUCED ALL BOOKS OF ACCOU NTS DOCUMENTS SALARY REGISTER BEFORE THE ASSESSING OFFICER IN RES PONSE TO REMAND REPORT SENT BY THE CIT (A). ACCORDINGLY THE ASSESSING OFF ICER SENT NOTICE U/S 131 TO THE SAID FIVE STAFF OF THE ASSESSEE BY POST TO T HEIR RESIDENTIAL ADDRESS FOR THEIR PERSONAL APPEARANCE WITH DOCUMENTS. FOUR OF T HE STAFF OUT OF FIVE STAFF APPEARED BEFORE THE A.O. ALONG WITH THEIR VOT ERS ID AND BANK ACCOUNT AND THEY ALL ADMITTED THAT THEY RECEIVED SALARY VER Y NOMINAL AMOUNT AND THEY RECEIVED COMMISSION ON THEIR SALE AS THEIR DES IGNATION AS 'SALES REPRESENTATIVES'. ON CONSIDERING AND BEING SATISFAC TION OF THEIR IDENTITY WITH THE DOCUMENTARY EVIDENCE SUCH AS BOOKS OF ACCO UNTS VOUCHERS BANK ACCOUNT VOTER'S ID ETC. AND ON CONSIDERING T HE ORAL SUBMISSION AND ACCEPTANCE OF SAID FOUR STAFF OF THE APPELLANT THE ASSESSING OFFICER RIGHTLY OBSERVED THAT THE COMMISSION PAID TO THE STAFF OF T HE APPELLANT. BUT WITHOUT CONSIDERING THE REMAND REPORT AS WELL AS ALL THE DOCUMENTARY EVIDENCE ORAL SUBMISSION AND MERIT OF THE CASE AS WELL AS SAID FOUR STAFF THAT WERE APPEARED BEFORE THE A.O. IN RESPONSE TO A NOTICE ISSUED U/S 131 OF THE ACT THE CIT (A) DID NOT CONSIDER THE ACTUAL FACT AND MERIT OF THE CASE ON THE GROUND THAT THE ASSESSEE SUBMITTED TWO SEPARATE SET OF LIST OF THE STAFF. REGARDING THE MATTER HE FAILED TO PERUSE THE RECORD PROPERLY AS THEN AUTHORIZED ADVOCATE SRI PARTHA PRATIM CHAKRABO RTY OF THE ASSESSEE ALREADY SUBMITTED AN AFFIDAVIT STATING INTER-ALIA T HAT HE PRODUCED A WRONG LIST OF THE STAFF AS NECESSARY DOCUMENTS WERE UNAVA ILABLE TO HIM ON THAT TIME DURING THE COURSE OF HEARING U/S 143(2). THE C IT (A) HAS NO JURISDICTION TO TURN DOWN A DECLARATION MADE BY AN ADVOCATE BY WAY OF AFFIDAVIT UNTIL OR UNLESS IT IS PROVED TO BE INGENU INE. YOUR APPELLANT BEGS TO SUBMIT THAT THE CIT (A) ACTE D BEYOND HIS JURISDICTION. HE FAILED TO MAINTAIN THE STATUTE MAN DATORILY REQUIRED. THE CIT (A) WHILE DECIDING THE APPEAL TO SET OUT THE ISSUE FOR DETERMINATION AND THE DECISION THEREOF ALONG WITH REASONS FOR ARRIVING AT THE DECISION. WITHOUT FINDINGS ANY ADVERSE FINDINGS OR MERIT OF THE CASE HE CANNOT BE DISBELIEF THE REMAND REPORT OF THE ASSESSING OFFICER WHO SENT THE REMAND REPORT AFTER PROPERLY AND FULLY VERIFIED IN ACCORDANCE OF LAW. IN THIS REGARD THE ITA NOS.30&31/14 D.D.INFOTECH 7 DECISION OF ITAT DELHI IN THE CASE OF 'WOOD HOUSE DEVELOPERS LTD. VS. DEPARTMENT OF INCOME TAX BEING ITA NO. 1982/DEI/20 11 MAY BE CONSIDERED. IT IS SUBMITTED BY THE APPELLANT THAT IN THE CASE O F M.M. MUTHUWAPPA VS. THE COMMISSIONER OF INCOME TAX HON'BLE MADRAS HIGH COURT WAS RIGHTLY OBSERVED 'THE ORDER OF REMAND MADE BY THE APPELLAT E ASSISTANT COMMISSIONER IS SOLELY BASED ON THE GROUND THAT A F URTHER OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSES TO PRODUCE THEIR BO OKS OF ACCOUNT.' IN THIS CASE THE CIT (A) IGNORED THAT AS THE ASSESSE UNABL E TO PRODUCE BOOKS OF ACCOUNTS AND DOCUMENTS BEFORE THE ASSESSING OFFICER HE ALREADY DENIED THE PROPER AND POSITIVE OPPORTUNITY OF BEING HEARD. BUT WHILE THE CIT (A) ORDER REMANDS REPORT FROM THE ASSESSING OFFICER AFT ER VERIFY THE BOOKS OF ACCOUNTS AND DOCUMENTS IN RESPECT OF THE GROUNDS OF APPEAL OF THE APPELLANT. AFTER THOROUGHLY VERIFY THE BOOKS OF ACC OUNTS AND DOCUMENTS AS WELL AS PERSONAL APPEARANCE OF THE STAFF OF THE APP ELLANT IN RESPECT OF NOTICE U/S 131 THE ASSESSING OFFICER MADE A REMAND REPORT WHICH WAS SENT TO THE CIT (A) IN DUE TIME. BUT THE CIT(A) IG NORING THE STATUTE OF THE INCOME TAX LAWS DISBELIEF THE OBSERVATION OF THE A SSESSING OFFICER WHICH HE GATHERED FROM THE EVIDENCE AND RECORDS OF THE CA SE AND PASS AN ERRONEOUS ORDER ACCORDING TO HIS OWN SELF MADE FIND INGS WITHOUT FOLLOW THE ACTUAL MERIT OF THE CASE. IN THE CASE OF 'LTAT DE LHI 'D' BENCH BEING ITA NO. 3874/DEL/2010 THE HON'BLE BENCH HAS OBSERVED A S FOLLOWS: 'THE EVIDENCE AND INFORMATION IS FORWARDED BY CIT(A ) TO AO. THE INCOME TAX ACT CONTEMPLATES THAT THE AO BEING ENTRUSTED WI TH THE JOB OF ASSESSMENT WILL VERIFY THE INFORMATION FROM DEPARTM ENT RECORD SUMMONING THIRD PARTIES AND EXAMINING THE EVIDENCE. IF FURTHE R TIME IS NEEDED IT WOULD HAVE BEEN ALLOWED BY CIT(A) IN THIS CASE NO SUCH R EQUEST FOR TIME HAS BEEN MADE BY AO. THE CIT(A) SHOULD HAVE SUMMONED TH E WITNESSES AND CONDUCTED FURTHER ENQUIRIES.' IN THIS CASE CIT(A) N EITHER ENQUIRED THE MATTER NOR TRIED TO GATHERED ANY EVIDENCE FROM THE RECORD MERIT DEPOSITION DOCUMENTS AND DEPARTMENTAL RECORD ETC. THUS IT IS SAID THAT THE ORDER OF THE CIT (A) DOES NOT CONFRONTATION OF THE RECORDS DOCUMENTS AND MERIT OF THE CASE AND THUS IT MAY BE DELETED A ND OR SET ASIDE. 8. ON THE OTHER HAND LD. DR FOR THE REVENUE HAS VE HEMENTLY SUBMITTED THAT LD. CIT(A) HAS PASSED A REASONED ORD ER. THE ASSESSEE UNDER CONSIDERATION HAS FAILED TO PROVE THE CAPACIT Y OF THE CREDITORS AND GENUINENESS OF THE TRANSFER OF MONEY WITHOUT DEDUCT ING TAX AT SOURCE. THE DISPUTE UNDER CONSIDERATION IS THAT THE ASSESSE E HAS PAID COMMISSION TO ITS STAFF IN ADDITION TO THEIR NORMAL SALARY. THE ASSESSEE HAS NOT DEDUCTED ANY TAX AT SOURCE. LD. DR ALSO SUB MITTED THAT NEITHER IN ITA NOS.30&31/14 D.D.INFOTECH 8 THE ASSESSMENT PROCEEDINGS NOR IN THE APPELLATE PR OCEEDINGS THE ASSESSEE OR ITS STAFF GAVE ANY DETAILS OF THE SALES EFFECTED PARTY-WISE BY EACH EMPLOYEE WHO HAVE RECEIVED THE COMMISSION. TH E BUSINESS OF ONLINE LOTTERY OF M/S FORBES INFOTAINMENT LTD. WORK ED ON INSTALLATION OF LOTTERY TERMINALS WHERE THE ORDINARY PEOPLE CAN PLA Y THE LOTTERY. IN THIS BUSINESS THE RETAILERS AND DISTRIBUTOR PLACE A DEPO SIT WITH THE COMPANY AGAINST THE TERMINAL INSTALLED WHICH WAS RETURNED BACK BY M/S FORBES INFOTAINMENT LTD. IN EXCHANGE FOR THE TERMINALS WHE N M/S FORBES INFOTAINMENT SHUT SHOP. THEREFORE IT IS NOT CLEAR WHY THE ASSESSEE IS REQUIRED TO PAY COMMISSION FOR SALES. LD. DR ALSO POINTED OUT THAT THE NAME OF EMPLOYEES ALSO DIFFERENT AND IT IS NOT CERT AIN TO WHOM THEY HAVE PROVIDED THEIR SERVICES. 9. HAVING HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL AVAILABLE ON RECORD WE ARE OF THE VIEW THAT THERE IS MERIT I N THE SUBMISSIONS OF THE ASSESSEE AS THE PROPOSITION CANVASSED BY THE LD. AR FOR THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED ABOVE. LD. AR C LARIFIED THAT BEFORE THE CIT(A) THE ASSESSEE HAD SUBMITTED THAT THE SAID CO MMISSION WAS PAID TO HIS STAFF AND THUS IT WAS NOT ATTRACTED SECTION 4 0(A)(IA) OF THE INCOME TAX ACT. IN THE REMAND REPORT OF THE ASSESSING OFFI CER THE AO OBSERVED THAT THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUN TS SALARY REGISTER BEFORE THE AO DURING THE COURSE OF HEARING U/S.143( 2) THEREFORE THE CIT( A) MADE THE ADDITION. BUT DURING THE HEARING IN REM AND REPORT THE ASSESSEE PRODUCED ALL BOOKS OF ACCOUNTS DOCUMENTS SALARY REGISTER BEFORE THE AO IN RESPONSE TO THE REMAND REPORT SENT BY THE CIT(A). ITA NOS.30&31/14 D.D.INFOTECH 9 ACCORDINGLY THE AO SENT THE NOTICE U/S.131 OF THE A CT TO THE SAID 5 STAFF OF THE ASSESSEE BY POST TO THEIR RESIDENTIAL ADDRESS F OR THEIR PERSONAL APPEARANCE WITH DOCUMENTS. FOUR OF THE STAFF OUT OF FIVE STAFFS APPEARED BEFORE THE AO ALONG WITH THEIR VOTER ID AND BANK AC COUNTS AND THEY ALL ADMITTED THAT THEY RECEIVED SALARY VERY NOMINAL AMO UNT AND THEY RECEIVED COMMISSION ON THEIR SALE AS THEIR DESIGNATION IS S ALES REPRESENTATIVES. ON CONSIDERING AND BEING SATISFIED OF THEIR IDENTIT Y WITH THE DOCUMENTARY EVIDENCE SUCH AS BOOKS OF ACCOUNTS VOUCHERS BANK ACCOUNTS VOTER ID ETC. AND ON CONSIDERING THE ORAL SUBMISSIONS AND AC CEPTANCE OF SALE FOR THE STAFF OF THE ASSESSEE THE AO HAS RIGHTLY OBSER VED THAT COMMISSION WAS PAID TO THE STAFF OF THE ASSESSEE. LD. AR ALSO SUBMITTED THAT THE REMAND REPORT PREPARED BY THE AO AFTER GIVING FURTH ER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND AFTER VERIFICATION OF ALL RETURNS AND WITNESSES AND THERE IS NO INFIRMITY IN THE REMAND REPORT THE REFORE LD. CIT(A) MUST ACCEPT IT. THE REMAND REPORT WAS PREPARED BY THE AO AFTER THOROUGHLY VERIFICATION OF BOOKS OF ACCOUNTS DOCUMENTS AS WEL L AS PERSONAL APPEARANCES OF THE STAFF OF THE ASSESSEE IN RESPECT OF NOTICE U/S.131 OF THE I.T.ACT. BUT THE LD. CIT(A) DISBELIEVED IN THE REMAND REPORT OF THE AO AND PASSED THE ERRONEOUS ORDER. IN ADDITION TO THIS LD. AR FOR THE ASSESSEE RELIED ON THE FOLLOWING JUDGMENTS :- I) WOODHOUSE DEVELOPERS LTD. ITA NO.1982/DEL/2011 DATED 26-10-2012; II) M.M.MUTHUWAPPA VS. CIT [1962] 46 ITR 1107 (MAD RAS) III) JITENDER GUPTA ITA NO.3874/DEL/2010 ORDER DA TED 16-12- 2011. ITA NOS.30&31/14 D.D.INFOTECH 10 THE SUM AND SUBSTANCE OF THE CASE REFERRED BY THE L D. AR FOR THE ASSESSEE ARE SAME AS HE HAS SUBMITTED IN HIS EXPL ANATION BEFORE US. CONSIDERING THE ABOVE CITED FACTS AND CIRCUMSTANCES OF THE CASE AND THE CASE LAWS CITED BY LD. AR OF THE ASSESSEE WE DIRE CT THE LD. CIT(A) TO DELETE THE ADDITION. 11. IN THE RESULT BOTH APPEALS FILED BY THE ASSESS EE (I.E. ITA NOS.30 &31/KOL/2014) ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28/1 0/2016. SD/ - (NARASIMHA CHARY) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 28/10/2016 & ()* /PRAKASH MISHRA . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER / ( ASSTT. REGISTRAR) & ' / ITAT 1. / THE APPELLANT-M/S D.D.INFOTECH 2. / THE RESPONDENT.-ITO WARD-50(1) KOLKATA 3. 4 ( ) / THE CIT(A) KOLKATA. 4. 4 / CIT 5. 56 7 8 8 / DR ITAT KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//