Shri Rajendra M.Shah, Anand v. The ACIT.,Anand Circle,, Anand

ITA 543/AHD/2012 | 2008-2009
Pronouncement Date: 29-09-2016 | Result: Partly Allowed

Appeal Details

RSA Number 54320514 RSA 2012
Assessee PAN AKYPS5939E
Bench Ahmedabad
Appeal Number ITA 543/AHD/2012
Duration Of Justice 4 year(s) 6 month(s) 28 day(s)
Appellant Shri Rajendra M.Shah, Anand
Respondent The ACIT.,Anand Circle,, Anand
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 29-09-2016
Date Of Final Hearing 30-06-2016
Next Hearing Date 30-06-2016
Assessment Year 2008-2009
Appeal Filed On 02-03-2012
Judgment Text
I.T.A. NO . 543 /AHD/201 2 A SS ESSMENT Y EAR: 200 8 - 09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC AHMEDABAD [CORAM: PRAMOD KUMAR AM] I.T.A. NO. 543 /AHD/ 20 1 2 ASSESSMENT Y EAR : 200 8 - 09 RAJENDRA M. SHAH ................... . APPELLANT SH A H INDUSTRIES 2001/4 GIDC VALL ABH VIDYANAGAR ANAND 388 121. [ PAN: A KYPS 5939 E ] VS. ASSTT. COMMISSIONER OF INCOME TAX ANAND CIRCLE ANAND . . ...... . ... . RESPONDENT APPEARANCES BY: M.K. PATEL FOR THE APPELLANT P.S. CHOUDHARY FOR THE RESPONDENT D ATE OF CONCLUDIN G THE HEARING : 30 .06.2016 DATE OF PRONOUNCING THE ORDER : 29 . 0 9 .2016 O R D E R 1. BY WAY OF THIS APPEAL THE A SSESS EE HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 7 TH DECEMBER 201 1 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 200 8 - 09. 2. IN GROUND NO.1 & 2 THE ASSESSEE HAS RAISED THE FOLLOWING GRIEVANCES: - 1. THAT ON FACTS AND IN LAW THE LEARNED CI T(A) HAS GRIEVOUS L Y ERRED IN CONFIRMING TH E ADDITION OF RS.12 32 508/ - WHICH IS IN FACT GENUINE COMMISSION EXPENDITURE INCURRED BY APPELLANT FOR BUSINESS PURPOSE. 2. THAT THE LEARNED C IT(A) A N D AO H A S GRIEVOUSLY ERRE D IN HOLDING THAT NO DETAILS ARE FILED WHEREAS IN FACT COMPLETE DETAILS ARE F ILED IN SUPPORT OF APPELLANT S CASE. I.T.A. NO . 543 /AHD/201 2 A SS ESSMENT Y EAR: 200 8 - 09 PAGE 2 OF 4 3. BRIEFLY STATED THE RELEVANT FACTS A RE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT WHILE ASSESSEE HAS CLAIMED DEDUCTION OF RS.12 32 508/ - ON ACCOUNT OF COMMISSION PAI D THE ASSESSEE H AS NOT FURNISHED ANY EVIDENCE FOR SERVICES RENDERED. ALL THAT THE ASSESSEE FURNISHED AT THE ASSESSMENT STAGE WERE COPIES OF CREDIT NOTES A ND NOTHING MORE THAN THAT. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BUT WITHOUT ANY SUCCES S. WHILE CONFIRMING THE DISALLOWANCE LEARNED CIT(A) OBSERVED AS FOLLOWS : - 5. THE REASONS FOR MAKING ADDITIONS OF RS.1 2 32 1877 - AS MENTIONED BY THE AO IN THE ASSESSMENT ORDER AS WELL AS ABOVE SUBMISSION OF THE AR OF THE APPELLANT HAVE BEEN CONSIDERED . THE ENTIRE ABOVE SUBMISSION OF THE AR OF THE APPELLANT IS NOT FOUND TO BE TENABLE AS NO PROPER EVIDENCES AND DETAILS HAVE BEEN FILED BY HIM TO PROVE THAT THE SERVICES WERE ACTUALLY RENDERED BY THE COMMISSION AGENTS TO THE APPELLANT. THE AR HAS MERELY FIL ED THE COPY OF CREDIT NOTES WHEREIN THE AMOUNT OF COMMISSION IS MENTIONED. THE AR HAS ALSO FILED A CHART SHOWING DETAILS I.E. NAME ADDRESSES AND PAN OF THE COMMISSION AGENTS AND AMOUNTS OF COMMISSION PAID TO THEM. BUT IN MY OPINION MERELY FILING OF COPIES OF CREDIT NOTES AND DETAILS LIKE NAME ADDRESSES AND PAN ETC . ARE NOT SUFFICIENT TO PROVE THAT THE SERVICES WERE ACTUALLY RENDERED BY THE COMMISSION AGENTS TO THE APPELLANT DURING THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AR OF THE APPELLANT WAS SPECIFICALLY ASKED BY THE AO TO FURNISH THE DETAILS OF SERVICES RENDERED BY THE COMMISSION AGENTS COPIES OF COMMISSION BILLS RAISED BY THE COMMISSION AGENTS DETAILS OF SALES MADE BY THEM ON BEHALF OF THE APPELLANT WITH SUPPORT ING EVIDENCES COPY OF CONTRACTUAL AGREEMENT MADE WITH THE COMMISSION AGENTS COMPARATIVE STATEMENT OF COMMISSION PAID VIS - A - VIS QUANTUM OF SALES ETC. HOWEVER THE AR FAILED TO FURNISH ALL THESE RELEVANT DETAILS AT THE TIME OF ASSESSMENT PROCEEDINGS BEFORE THE AO. THE AR IN HIS ABOVE SUBMISSION DATED 05.12.2011 AS FILED DURING THE COURSE OF APPELLATE PROCEEDINGS HAS PLEADED THAT THE COMMISSION WAS PAID AS PER THE VERBAL CONTRACTUAL TERMS. THE AR HAS ARGUED THAT THE APPELLANT ACHIEVED THE TURNOVER OF RS. 6 42 5594 / - DUE TO SERVICES RENDERED BY THE COMMISSION AGENTS. BUT AGAIN THESE ARGUMENTS OF THE AR ARE NOT SUPPORTED BY DOCUMENTARY EVIDENCES. THE AR HAS NOT BEEN ABLE TO EXPLAIN THAT AS TO HOW THE COMMISSION AGENTS HAVE PLAYED THEIR ROLE IN MAKING THE SALE S I N THE CASE OF APPELLANT AND ON WHAT BASI S THE AMOUNT OF COMMISSION AS SH OWN TO HAVE BEEN PAID TO THEM HAVE BEEN CALCULATED. THE AR HAS FURTHER ARGUED THAT THE COMMISSION ARE BEING PAID TO THE COMMISSION AGENTS PRIOR TO F . Y . 2007 - 08 (I.E. RELEVANT TO AY 200 8 - 09 WHICH IS THE YEAR UNDER APPEAL) AND ALSO SUBSEQUENT TO F .Y. 2007 - 08 AND SUCH PAYMENTS OF COMMISSION HAVE NOT BEEN DISALLOWED BY THE CONCERNED AOS. BUT THIS SUBMISSION OF THE AR IS NOT GOING TO HELP THE CASE OF THE APPELLANT. EACH YEAR IS A DIFFERENT Y EAR AND ASSESSMENT FOR ANY YEAR HAS TO BE COMPLETED ON THE BASIS OF FACTS AND CIRCUMSTANCES OF SUCH YEAR. IT CANNOT BE SAID THAT MERELY ON THE BASIS THAT PAYMENTS OF COMMISSION AS MADE IN EARLIER YEARS AND IN SUBSEQUENT YEARS HAVE NOT BEEN DISALLOWED BY TH E AO AND THEREFORE SIMILAR PAYMENTS OF COMMISSION AS MADE FOR THE YEAR UNDER CONSIDERATION SHOULD ALSO BE ACCEPTED. IN M Y OPINION THE AO IS LEGALLY BOUND TO VERIFY THE GENUINENESS I.T.A. NO . 543 /AHD/201 2 A SS ESSMENT Y EAR: 200 8 - 09 PAGE 3 OF 4 OF EXPENSES AS CLAIMED BY THE APPELLANT IN RESPECT OF THE YEAR FOR WHICH THE ASSESSMENT IS BEING MADE. AGAIN THE APPELLANT IS ALSO LEGALLY BOUND TO FURNISH ALL RELEVANT DOCUMENTARY EVIDENCES WHICH ARE REQUIRED FOR PROVING THE GENUINENESS OF EXPENSES AS CLAIMED BY HIM IN THE PROFIT AND LOSS ACCOUNT. IT IS SETTLED POSITION OF LAW TH AT COMMISSION EXPENSES ARE ALLOWABLE ONLY WHEN IT IS PROVED BY THE APPELLANT BEYOND DOUBT THAT SERVICES HAVE ACTUALLY BEEN RENDERED BY THE COMMISSION AGENTS TO HIM AND IN THIS REGARD ALL NECESSARY EVIDENCES AND DETAILS ARE REQUIRED TO BE FILED BY THE ASSES SEE TO THE AO TO D ISCHARGE THE ONUS COST UPON HIM . IN THIS REGARD THE RELIANCE IS PLACED ON THE DECISIONS OF HON'BLE DELHI HIGH COURT IN THE CASE OF SCHENEIDER ELECTRIC INDIA LTD . VS. CIT (2008) 171 TAXMAN 177. 4. NOT SATISFIED THE ASSESSEE IS IN FURTHE R APPEAL BEFORE ME. 5. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PERUSED THE MATERIAL ON RECORD I A M NOT INCLINED TO DISTURB WELL REASONED FINDINGS OF THE LEARNED CIT ( A ) . THE ASSESSEE HAS NOT BEEN ABLE T O FILE ANY EVIDENCE WHATSOEVER OF THE SERVICES RENDERED BY THE COMMISSION AGENT. ON THE STRENGTH OF THE COPIES OF CREDIT NOTES ALONE THE COMMISSION CANNOT BE ALLOWED AS DEDUCTION . I THEREFORE APPROVE THE CONCLUSIONS ARRIVED AT BY THE LEARNED CIT(A) AND DE C LINE TO INTERFERE IN THE MATTER. 6. GROU ND NOS.1 & 2 ARE THUS DISMISSED. 7. GROUND NO.3 IS A S FOLLOWS : - (3) THAT THE LEARNED CIT(A) H A S GRIEVOUSLY ERRED IN NOT DECIDING THE GROUND OF APP EAL REGARDING AD - HOC DISALLOWANCE OF RS.20 000/ - OUT OF TRAVELLING AND LABOUR EXPENSES. 8. LEARNED REPRESE NTATIVES FAIRLY AGREE THAT AS LEARNED CIT ( A ) HAS NOT AT ALL DECIDED THIS ISSUE THE MATTER IS REQUIRED TO BE REMITTED TO THE FILE OF THE LEARNED CIT(A) FOR ADJUDICATION BY WAY OF A SPEAKING ORDER. 9. GROUND NO.3 IS THUS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO . 543 /AHD/201 2 A SS ESSMENT Y EAR: 200 8 - 09 PAGE 4 OF 4 1 0. GROUND NO S .4 & 5 ARE NOT PRESSED AS THESE ARE ONLY CONSEQUENTIAL. 11. IN THE RESULT THE APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF SEPTEMBER 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 29 TH DAY OF SEPTEMBER 2016. PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRA R INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES AHMEDABAD