Kanu Kitchen Kulture Pvt. Ltd., New Delhi v. DCIT, New Delhi

ITA 3070/DEL/2011 | 2008-2009
Pronouncement Date: 11-10-2013 | Result: Dismissed

Appeal Details

RSA Number 307020114 RSA 2011
Assessee PAN AAACK0344A
Bench Delhi
Appeal Number ITA 3070/DEL/2011
Duration Of Justice 2 year(s) 4 month(s)
Appellant Kanu Kitchen Kulture Pvt. Ltd., New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 11-10-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 11-10-2013
Date Of Final Hearing 24-07-2013
Next Hearing Date 24-07-2013
Assessment Year 2008-2009
Appeal Filed On 10-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI SHAMIM YAHYA ITA NO. 3070/DEL/2011 ASSTT. YR: 2008-09 KANU KITCHEN KULTURE PVT. LTD. VS. DCIT CIRCLE 5 (1) DELHI GURGAON ROAD NH-8 NEW DELHI. NEW DELHI-110037. PAN: AAACK 0344 A ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI K.R. MANJANI ADV. & SHRI PRAKASH GUPTA CA RESPONDENT BY : SHRI K.K. JAISWAL DR O R D E R PER R.P. TOLANI J.M : THIS IS ASSESSEES APPEAL AGAINST CIT(A)S ORDER DATED 23-5-2011 RELATING TO A.Y. 2008-09.FOLLOWING GROUNDS ARE RAIS ED: 1. THAT THE ORDER PASSED BY THE LD. A.O. AND CONFI RMED BY THE CIT(A) NEW DELHI IS NOT ONLY BAD IN LAW BUT AL SO AGAINST THE FACTS OF THE CASE. 2. THAT LD. CIT(A) IS ERRED UNDER THE LAW AND FACTS WHILE CONFIRMING THE ADDITION MADE BY THE A.O. ON ACCOUNT OF SALES COMMISSION IN VIEW OF THE FACT THAT THE APPEL LANT HAD DULY FILED VARIOUS DETAILS & DOCUMENTS CONFIRMI NG THE SERVICES RENDERED BY THE SALES AGENT TO THE APP ELLANT. 3. THAT THE LD. CIT(A) IS ERRED UNDER THE LAW WHIL E CONFIRMING THE ADHOC DISALLOWANCE OUT OF FOREIGN TRAVELING EXPENSES AMOUNTING TO RS. 1 50 000/- MADE BY THE A.O. 2 2. FACTS OF THE CASE IN BRIEF ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPORT AND SALE OF MODULAR KITCHEN & APPLIANCES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND THAT ASSESSEE H AD DECLARED TOTAL SALES OF RS. 7 85 44 927/- ON WHICH IT HAD INCURRED COMMISSI ON EXPENSES OF RS. 29 50 904/-. ASSESSING OFFICER ASKED FOR JUSTIFICAT ION IN THIS BEHALF. IT WAS REPLIED THAT THE ASSESSEE HAD PAID SALES COMMISSION FOR BOOKING OF ORDERS FOR MODULAR KITCHEN TO VARIOUS CUSTOMERS. DEBIT NOTES S HOWING THE DETAILS WERE FILED. THE ASSESSING OFFICER FOUND THAT THE COMMISS ION OF RS. 29 50 904/- PAID TO ONE K.S. SINGHAL DAIRIES PVT. LTD. (KSSD ) WORKED OUT @ 22% OF THE GROSS SALE EXECUTED. ASSESSING OFFICER VIDE QUE STIONNAIRE DATED 19-11- 2010 ASKED THE ASSESSEE (I) THE COMMISSION TO KSSD HAS BEEN SHOWN TO BE INCURRE D FOR THE FIRST TIME WHETHER REQUISITE TDS WAS DEDUCTED ON T HIS COMMISSION AND IF SO FORM NO. 16A MAY BE SUBMITTED. (II) WHY THESE EXPENSES HAVE NOT BEEN DEBITED TO P&L A/C UNDER THE HEAD COMMISSION AND HAVE BEEN REDUCED FROM THE SALE S. 2.1. THE ASSESSEE REPLIED : (I) REQUISITE TDS WAS DEDUCTED AND LEDGER ACCOUNT AND F ORM NO. 16A COPIES WERE ENCLOSED. (II) COMMISSION WAS INCURRED AS PER THE COPY OF MOU DATE D 2-4-2007 EXECUTED WITH KSSD. (III) AS PER ASSESSEES ACCOUNTING POLICY THE COMMISSION HAS BEEN DEBITED TO SALES ACCOUNT INSTEAD OF DEBITING TO P&L A/C WHICH IN EFFECT MADE NO DIFFERENCE. 2.2. ASSESSING OFFICER ISSUED SUMMONS U/S 133(6) ON THE SAID KSSD CALLING FOR 3 (I) CONFIRMED COPY OF ACCOUNT IN RESPECT OF THE TRANSA CTIONS ENTERED INTO WITH THE ASSESSEE. (II) MODE OF TRANSACTION BETWEEN IT AND THE ASSESSEE. (III) DETAILED NOTE OF BUSINESS ACTIVITY CARRIED OUT IN T HIS BEHALF ALONG WITH COPY OF MEMORANDUM OF ARTICLE. (IV) COPY OF ITS P&L A/C FOR THE PERIOD ENDING 31-3-2008 . (V) COMPLETE DETAIL ABOUT INCOME-TAX PARTICULARS PAN A ND WARD WHERE ASSESSED. 2.3. VIDE LETTER DATED 17-11-2010 THE SAID KSSD SUP PLIED THE REQUISITE INFORMATION. 2.4. FROM THE ASSESSMENT RECORD OF KSSD THE ASSESSI NG OFFICER FOUND FOLLOWING FACTS AND DREW ADVERSE INFERENCE THAT ITS DIRECTORS HAD NO KNOWLEDGE IN THE FIELD OF MODULAR KITCHEN APPLIANC ES AS THEY WERE EARLIER DOING BUSINESS OF ONLY SALE OF MILK AND ALLIED PRO DUCTS SINCE MORE THAN TWENTY YEARS: (I) KSSD WAS ENGAGED IN THE SALE AND PURCHASE OF MILK A ND ALLIED PRODUCTS. (II) KSSD HAS BEEN CLAIMING CARRY FORWARD OF UNABSORBED DEPRECIATION AND HUGE BUSINESS LOSSES SINCE PAST YEARS AND THE C OMMISSION INCOME HAS BEEN UTILIZED TO REDUCE THE LOSS AND ALL OW THE ASSESSEE TO REDUCE ITS PROFITS. (III) THE AUDITORS M/S PRAKASH & PRAKASH CAS WERE COMMON TO BOTH OF THEM. (IV) NOTHING HAS BEEN PRODUCED BY KSSD TO SHOW THAT ANY OF THE DIRECTORS HAD ANY EXPERIENCE IN THE LINE OF MODULAR KITCHEN AND APPLIANCES. 4 (V) THE COMMISSION HAS BEEN SHOWN BY KSSD AS BUSINESS I NCOME WHEREAS IT AS NEVER ITS BUSINESS ACTIVITY. (VI) KSSD WAS A LOSS MAKING CONCERN PAYING NO TAXES. 2.5. ASSESSING OFFICER FURTHER DREW ADVERSE INFEREN CE THAT THE COMMISSION @22% GIVEN TO KSSD WAS EXORBITANT CONTRARY TO MARK ET PRACTICE AND NOT EXPENDED FOR BUSINESS PURPOSES AS ASSESSEE HAD FAIL ED TO DISCHARGE ITS BURDEN IN THIS BEHALF THIS COMMISSION WAS DISALLO WED. 2.6. APROPOS FOREIGN TRAVELING EXPENSE THE SAME W AS DISALLOWED BY FOLLOWING OBSERVATIONS: THE ASSESSEE HAS CLAIMED FOREIGN TRAVELING EXPENSE S OF RS. 15 73 323/- WHICH INCLUDES EXPENSES ON AIR TICKET A ND LODGING AND BOARDING. FROM THE DETAILS FILED IT IS SEEN THA T THE EXPENSES INCLUDE PURCHASE OF FOREIGN EXCHANGE TO ME ET OUT THE EXPENSE OF PERSONAL NATURE AND FURTHER SOME OF THE EXPENSES ARE ALSO NOT SUPPORTED BY BILLS/ VOUCHERS. THEREFOR E TO COVER UP ELEMENT OF PERSONAL EXPENSES AND EXPENSES OF UN- VERIFIABLE NATURE A DISALLOWANCE OF RS. 1 50 000/- IS MADE. T HIS WILL MEAN AN ADDITION OF RS. 1 50 000/-. 2.7. AGGRIEVED ASSESSEE PREFERRED FIRST APPEAL WHE RE THE CIT(A) CONFIRMED BOTH THE ADDITIONS BY FOLLOWING OBSERVAT IONS: COMMISSION INCOME : 4.1. IN THE PRESENT CASE AS STATED EARLIER THE A PPELLANT COMPANY HAS NOT BEEN ABLE TO GIVE ANY CREDIBLE EVID ENCE WHICH COULD PROVE THAT ANY SERVICES WERE RENDERED EITHER BY M/S K.S. SINGHAL DIARIES (P) LTD. OR ITS DIRECTORS IN SO FAR AS THE SALES OF ASSESSEES PRODUCTS ARE CONCERNED. THE MOU DATED 02 -04-207 AND THE DEBIT NOTES ISSUED BY M/S K.S. SINGHAL DAIR IES (P) LTD. HAVE TO BE SEEN IN THE BACKGROUND THAT HE SAID COMP ANY WAS HAVING ACCUMULATED HUGE LOSSES AND COULD HAVE ACCOM MODATED THE APPELLANT COMPANY IN SAVING THE TAXABLE INCOME. 5 4.2. IN VIEW OF THE AFORESAID I DO NOT FIND ANY SU BSTANCE IN THE CLAIM OF THE APPELLANT COMPANY AND THE DISALLOW ANCE MADE BY THE AO ON ACCOUNT OF PAYMENT OF COMMISSION OF RS . 2950904/- TO M/S K.S. SINGHAL DAIRIES (P) LTD. IS B EING SUSTAINED. FOREIGN TRAVELING EXPENSES : I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT COMPANY AND THE FINDINGS RECORDED BY THE LD. AO. ON CONSISDERATION I FIND THAT WHENEVER SH. M.K. GO MBAR AND MRS. KANUPRIYA GOMBAR HAVE VISITED FOREIGN COUNTRIE S SUBSTANTIAL FOREIGN EXCHANGE WAS PURCHASED BY THE A PPELLANT COMPANY. THEREFORE THE LD. COUNSEL WAS ASKED BY ME TO GIVE SPECIFIC DETAILS OF ITEMS ON WHICH THE FOREIGN EXCH ANGE PURCHASED BY THE COMPANY W AS SPENT. IN RESPONSE TO THIS THE LD. COUNSEL EXPRESSED HIS INABILITY TO FURNISH THE SPECIFIC PURPOSES FOR WHICH THE FOREIGN EXCHANGE WAS UTILIZE D. THE LD. COUNSEL WAS NOT EVEN IN A POSITION TO PRODUCE THE C OPIES OF HOTEL BILLS WHERE MR. AND MRS. GOMBAR HAD STAYED DU RING THEIR FOREIGN VISITS. IN THE ABSENCE OF NECESSARY EVIDENC E I AM NOT INCLINED TO ACCEPT THE CLAIM OF THE APPELLANT COMPA NY THAT THE ENTRIES EXPENDITURE OF RS. 1573323/- WAS INCURRED W HOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. IT HAS TO BE APPRECIATED THAT AS PER THE REQUIREMENT OF SECTION 37(1) IT IS FOR THE TAX PAYER TO PROVE NOT ONLY THE FACT THAT T HE EXPENDITURE WAS ACTUALLY MADE BUT ALSO THE FACT THT THE EXPENDI TURE WAS WHOLLY AND EXCLUSIVELY IN CONNECTION WITH BUSINESS PURPOSES. ACCORDINGLY THE DISALLOWANCE MADE BY THE LD. AO IS BEING SUSTAINED. AGGRIEVED ASSESSEE IS BEFORE US. 3. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT ADDIT ION HAS BEEN SUSTAINED ON WRONG PREMISE. IT IS AN ESTABLISHED MARKET PRACT ICE THAT FOR SALE OF MODULAR KITCHENS ONE HAS TO HIRE SERVICES OF VARIOU S AGENTS AND IT IS NOT THE CASE OF THE DEPARTMENT THAT THE COMMISSION HAS BEEN PAID ONLY TO KSSD. A 6 LIST IS ENCLOSED SHOWING PAYMENT OF RS. 29 50 904/- TO PERSONS OTHER THAN KSSD WHICH HAS BEEN ALLOWED BY THE ASSESSING OFFICE R. 3.1. BESIDES THE COMMISSION HAS BEEN PAID TO KSSD I N A.Y. 2009-10 AND 2010-11 ALSO. HOWEVER IN SUBSEQUENT YEAR IN A.Y. 20 09-10 THE COMMISSION HAS BEEN ALLOWED BY AN ORDER U/S 143(1) AND FOR A.Y . COMMISSION HAS BEEN ALLOWED VIDE ORDER U/S 143(3). THE COMMISSION WAS P AID BY A WRITTEN AGREEMENT (MOU) DATED 2-4-2007. IT IS PLEADED THAT THE EXPERTISE OF SELLING AGENT IS NOT A CRITERIA THE IMPORTANT ISSUE WAS KS SDS CONTRACTS.. 3.2. LD. COUNSEL DREW OUR ATTENTION TO CLAUSE 11 OF THE MOU WHICH IS AS UNDER: 11. THAT THE AGENT SHALL BE ENTITLED FOR SALES COM MISSION @ 22% OF THE GROSS VALUE OF BILLING TO THE CUSTOMERS INTRODUCED BY THE AGENT. THE PRINCIPAL SHALL FORWARD A COPY OF INVOICE TO THE AGENT FOR HIS RECORDS AND FOR HIS BILLING FOR S ALES COMMISSION SIMULTANEOUSLY. 3.3. THUS THE RATE OF COMMISSION IS FIXED BY THE M OU WHICH IS DULY EXECUTED AND BINDING ON THE ASSESSEE. IT IS PLEADED THAT PAYMENT OF COMMISSION TO AN AGENT WHO HAS RENDERED SERVICES IS AN ALLOWABLE DEDUCTION. THE ASSESSEE HAS DISCHARGED ITS BURDEN B Y IDENTIFYING THE KSSD WHICH HAS CONFIRMED THE RECEIPT OF THE INCOME AND W HICH IS RECORDED IN THE BOOKS OF ACCOUNT. THE CONCERNED COPY OF LEDGER HAS BEEN PRODUCED. 3.4. APROPOS FOREIGN TRAVELING LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE FOREIGN TOURS OF THE DIRECTORS OF THE ASSESSEE FIRM HAS NOT BEEN DOUBTED. ONLY BECAUSE SOME DETAILS COULD NOT BE PRODUCED AN AD HOC DISALLOWANCE HAS BEEN MADE OUT OF THE FOREIGN EXCHANGE PURCHASED BY THE ASSESSEE. IT IS PLEADED THAT WHEN THE FOREIGN TRAVELLING ITSELF HAS BEEN HELD FOR BUSINESS 7 PURPOSE THERE IS NO JUSTIFICATION IN MAKING AD HOC DISALLOWANCE OUT OF THE FOREIGN TRAVELING. 4. LD. DR ON THE OTHER HAND REFERRED TO THE MOU I TSELF AND CONTENDS THAT VARIOUS CLAUSES OF MOU PRESCRIBE MANDATORY PRO TOCOL TO BE OBSERVED BY BOTH THE PARTIES IN THEIR RELATIONSHIP AS PRINCIPAL AND AGENT MAINLY AS UNDER: 6. THAT THE AGENT WILL ENSURE THAT THE PROSPECTIVE BUYER OF THE PRODUCT IS THE END USER OF THE PRODUCT. 7. IN ALL HIS COMMERCIAL DEALINGS AND DOCUMENTATIO NS AND ON THE NAME PLATE OR LETTERHEADS INDICATING HIS PLA CE OF BUSINESS DESCRIBED HIMSELF AS SELLING AGENT OF PRIN CIPAL. 10. THAT THE AGENT SHALL HAVE UNINTERRUPTED RIGHT T O VISIT PRINCIPALS SHOWROOM ALONG WITH HIS CUSTOMER FOR LI VE DEMONSTRATION OF MODULAR KITCHEN BY THE PRINCIPALS MARKETING TEAM EVEN AT A SHORTER NOTICE. 11. THAT THE AGENT SHALL BE ENTITLED FOR SALES COMM ISSION @ 22% OF THE GROSS VALUE OF BILLING TO THE CUSTOMERS INTRODUCED BY THE AGENT. THE PRINCIPAL SHALL FORWARD A COPY OF I NVOICE TO THE AGENT FOR HIS RECORDS AND FOR HIS BILLING FOR SALES COMMISSION SIMULTANEOUSLY. 12. THAT THE AGENT SHALL RAISE ITS INVOICE/ DEBIT N OTE ON QUARTER TO QUARTER BASIS. HE SHALL BE ENTITLED FOR PAYMENT ONLY AFTER TH PRINCIPAL REALIZES FULL VALUE OF SALE PROC EEDS TO THE CUSTOMERS INTRODUCED BY THE AGENT. HOWEVER THE PAY MENT SHALL BE SUBJECT TO WITHHOLDING TAX AS APPLICABLE UNDER I NCOME TAX ACT TIME TO TIME. 13. THAT IT HAS BEEN UNDERSTOOD BY THE AGENT ANY DE DUCTION OUT OF INVOICES RAISED BY THE PRINCIPAL TO THE CUST OMER OF THE AGENT SHALL BE ON AGENTS ACCOUNTS WITHOUT ANY DIS PUTE. 4.1. EXCEPT CONFIRMING THE AMOUNT AND GIVING DETAI LS ASSESSEE AND KSSD BOTH HAVE NOT PRODUCED ANY OTHER DOCUMENT L ETTER HEAD INVOICE ETC. 8 AS PR THE MOU. IT IS UNDISPUTED FACT THAT KSSD HAS HUGE CLAIM OF UNABSORBED DEPRECIATION AND BUSINESS LOSSES WHEREA S THE ASSESSEE IS A PROFITABLE FIRM. THERE IS PREVIOUS EXPERIENCE OF K SSD IN SELLING OF MODULAR KITCHENS AS IT HAS NOT CLAIMED ANY TECHNICA L EXPERIENCE IN THIS FIELD EXCEPT OF SELLING MILK GHEE PANEER BUTTER ETC. SALE OF MODULAR KITCHEN IS A SOPHISTICATED ACTIVITY AND AS PER MOU THE AGENT WAS SUPPOSED TO HAVE AN OFFICE THE PRINTED LETTER HEAD AND INVOICES DESCRI BING HIMSELF AS SELLING AGENT OF THE PRINCIPAL THE ASSESSEE WAS SUPPOSED TO FORWARD COPY OF INVOICES TO THE AGENT OFFICE MAINTAIN RELEVANT REC ORD. THE COMMISSION WILL BE GIVEN ONLY AFTER THE FULL PARTICULARS ABOUT INQU IRIES DELIVERY SALE OF A MODULAR KITCHEN AND ITS PROCEEDS ARE REALIZED BY TH E PRINCIPAL. ALL THESE CONDITIONS OF MOU CLEARLY SHOW THAT THE ASSESSEE AN D AGENT WERE SUPPOSED TO MAINTAIN COPIOUS RECORDS FOR THE TRANSACTIONS OF TRADE INQUIRIES SALES AND REALIZATION OF SALE PROCEEDS BY CASH OR CHEQUES. . THE RECORD OF MODULAR KITCHEN SPECIFICATIONS LENGTH BREADTH WIDTH AND OTHER REQUIREMENT OF THE CUSTOMERS ALL ARE ESSENTIAL FOR THIS TYPE OF BUSIN ESS. NOTHING WORTHWHILE IN THIS BEHALF HAS BEEN SUPPLIED BY ASSESSEE OR AGENT EXCEPT FIGURE OF COMMISSION PAID TDS AND INCOME-TAX RECORD. THE AS SESSEE HAS ONLY POINTED OUT ABOUT THE IDENTITY OF KSSD AND ITS BEIN G AN INCOME TAX ASSESSEE. A CRUCIAL FACT WHICH IS BEING GLOSSED OVE R BY THE ASSESSEE IS THE RECORD OF BUSINESS SERVICES. IT WAS A MUTUALLY BEN EFICIAL DUBIOUS ARRANGEMENT FOR BOTH I.E. TO REDUCE ASSESSEES PR OFITS AND THUS AVOID TAX AND FOR KSSD TO REDUCE ITS LOSS. THE PRODUCTION OF SKELETON RECORD ABOUT IDENTITY AS MENTIONED ABOVE DOES NOT PROVE THAT AN Y BUSINESS SERVICES WERE RENDERED BY KSSD AND ENJOYED BY THE ASSESSEE FOR I TS BUSINESS. NO CUSTOMER DETAILS ABOUT INQUIRY REQUIREMENT SIZE O F THEIR KITCHEN & MODEL OF 9 KITCHEN BY PROSPECTIVE VISITORS HAS BEEN FILED SIM ILARLY ANY PROOF ABOUT FEED BACK AFTER SALE SERVICE NOTHING HAS BEEN REND ERED. 4.2. APROPOS SUBSEQUENT YEARS ALLOWANCE LD. DR CON TENDS THAT IT IS TRITE LAW THAT IN INCOME-TAX ACT EVERY YEARS IS A SEPAR ATE UNIT AND PRINCIPLE OF RES-JUDICATA DO NOT APPLY. IN THE NEXT YEAR I.E. A .Y. 2009-10 THE ASSESSMENT WAS PROCESSED U/S 143(1) AND FOR A.Y. 2910-11 THE A SSESSMENT U/S 143(3) MAY BE TINKERED WITH SEC. 263 AS THE ORDER DOES NOT REFER TO THE COMMISSION OR EARLIER YEAR DISALLOWANCE. SINCE THE ASSESSEE EX CEPT DEMONSTRATING THE IDENTITY OF PARTY HAS FAILED TO DEMONSTRATE RENDERI NG OF ANY ACTUAL SERVICES FOR BUSINESS PURPOSES THE CLAIM OF EXPENDITURE BEC OMES ONE WHICH IS NOT LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR TH E BUSINESS IN TERMS OF SEC. 37(1). THE BURDEN TO PROVE IS SQUARELY ON ASSESSEE WHICH IT HAS FAILED TO DISCHARGE. THEREFORE THE EXPENDITURE CLAIMED BY AS SESSEE CANNOT BE ALLOWED AS BUSINESS EXPENDITURE DUE TO NON DISCHARGE OF BUR DEN BY ASSESSEE. 4.3. APROPOS FOREIGN TRAVEL EXPENSES LD. DR VEHEME NTLY ARGUES THAT CIT(A) IN UPHOLDING THE ADDITION HAS MENTIONED THAT ASSESSEE FAILED TO PRODUCE ANY RECORD LIKE HOTEL BILLS ETC. AND THE M ANNER BY WHICH THE FOREIGN EXCHANGE WAS UTILIZED THEREFORE THE ADDITION HAS BEEN RIGHTLY SUSTAINED. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. FACTS HAVE BEEN NARRATED IN DE TAILS ABOVE. SECTION 37(1) PRESCRIBES AS UNDER: 37(1) ANY EXPENDITURE NOT BEING EXPENDITURE OF T HE NATURE DESCRIBED IN SECTION 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASS ESSEE LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURP OSES OF THE BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTIN G THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION. 10 5.1. AS THE FACTS EMERGE ASSESSING OFFICER ASKED S PECIFIC QUERY TO DEMONSTRATE THAT THE EXPENDITURE WAS LAID OUT OR EX PENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS MEANING TH EREBY THE AMOUNT WAS PAID FOR THE SERVICES WHICH ARE RENDERED FOR THE AS SESSEES BUSINESS. ASSESSEE SUPPLIED ONLY CONFIRMATION ABOUT THE PAYME NT OF COMMISSION AND THE INCOME-TAX RECORD OF KSSD. HOWEVER ON THE ISSU E OF RENDERING OF SERVICE NO DOCUMENT RECORD OR EVIDENCE WHAT-SO-EVE R WAS FURNISHED DESPITE SO MANY REQUISITIONS BY ASSESSING OFFICER. THE MOU IS RELIED ON BY THE ASSESSEE TO SUBSTANTIATE ITS CLAIM THAT THE AMOUNT WAS SPENT AS PER THE BINDING MOU FOR THE PURPOSE OF BUSINESS. AT THE SAM E TIME VARIOUS STIPULATIONS OF MOU PRESCRIBED THAT THE ASSESSEE AN D AGENT WILL KEEP VARIOUS TYPE OF RECORD SEND IT TO ASSESSEE WHO IN TURN WI LL PROCESS IT SEND THE INVOICES TO RECIPIENT WHO WILL COLLECT THE MONEY PA ID TO ASSESSEE. THUS A FULL FLEDGED EXERCISE WAS TO BE CARRIED OUT BY THE ASSES SEE AND ITS AGENT AS PER MOU FOR RENDERING THE SERVICES AND EARNING THE CO MMISSION. NO RECORD OR EVIDENCE WHAT-SO-EVER HAS BEEN PRODUCED TO THIS EFF ECT. 5.2. THUS THE ASSESSEE HAS UTTERLY FAILED TO DEMONS TRATE THE NATURE EXTENT OF SERVICE RENDERED BY THE AGENT AND AVAILED BY THE ASSESSEE FOR ITS BUSINESS OF MODULAR KITCHENS. IN THIS SCENARIO WHAT APPEARS ON RECORD IS MERELY BOOK ENTRIES COUPLED WITH TDS THE AMOUNT WHICH WILL BE C LAIMED AS A REFUND BY THE RECIPIENT BEING A LOSS MAKING CONCERN. IN OUR C ONSIDERED VIEW THE ASSESSEE HAS PRODUCED ONLY SKELETAL PAPER WORK OF T HE ARRANGEMENT WITHOUT ANY IOTA OF EVIDENCE ABOUT ACTUAL BUSINESS SERVICES RENDERED. 5.3. THE ASSESSEES CLAIM FOR ALLOWING SIMILAR COMM ISSION PAYMENT IN SUBSEQUENT YEAR CARIES NO MERIT INASMUCH AS LD. DR HAS RIGHTLY PLEADED THAT EACH AND EVERY YEAR OF ASSESSMENT IS SEPARATE AND I NDEPENDENT UNIT AND PRINCIPLES OF RES-JUDICATA DO NOT APPLY. THE ASSESS MENT FOR A.Y. 2009-10 IS 11 U/S 143(1) AND FOR A.Y. 2010-11 THERE IS NO MENTION OF THE COMMISSION AT ALL. THEREFORE WE ARE UNABLE TO GIVE CREDENCE TO T HE FACTS WHOSE RECORD IS NOT BEFORE US AND NOT REFERRED TO BEFORE LOWER AUTH ORITIES. 5.4. WE MAY FURTHER ADD THAT HONBLE SUPREME COURT IN THE CASE OF CIT VS. IMPERIAL CHEMICAL INDUSTRIES LTD. 74 ITR 17 HAS UNEQUIVOCALLY HELD THAT THE BURDEN OF PROVING THAT A PARTICULAR EXPENDITURE HAS BEEN LAID OUT OR INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS IS ENTIRELY ON THE ASSESSEE. THE DISCHARGE OF THE BURDEN HAS TO BE EFF ECTIVE AND MEANINGFUL AND NOT TO COVER UP BY MERELY BOOK ENTRIES AND PAPER WO RK. IN VIEW THEREOF WE SEE NO INFIRMITY IN THE ORDER OF LOWER AUTHORITIES IN MAKING THIS DISALLOWANCE WHICH IS UPHELD. 5.5. APROPOS SECOND GROUND ABOUT FOREIGN TRAVEL ALS O THE LD. CIT(A) HAS CATEGORICALLY REMARKED THAT FULL DETAILS WERE NOT P RODUCED BEFORE HIM. THUS HERE ALSO THE BURDEN PLACED ON THE ASSESSEE IN TERM S OF IMPERIAL CHEMICAL INDUSTRIES LTD. (SUPRA) ALSO HAS NOT BEEN DISCHARGE D. IN VIEW THEREOF WE UPHOLD THE ORDER OF LOWER AUTHORITIES ON THIS ISSUE ALSO. 6. IN THE RESULT ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11-10-2013. SD/- SD/- ( SHAMIM YAHYA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: __11-10-2013. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 12