DINESH V BAHIRWANI, MUMBAI v. DCIT 20(2), MUMBAI

ITA 7471/MUM/2014 | 2010-2011
Pronouncement Date: 18-10-2016

Appeal Details

RSA Number 747119914 RSA 2014
Assessee PAN ABRPB3559K
Bench Mumbai
Appeal Number ITA 7471/MUM/2014
Duration Of Justice 1 year(s) 10 month(s) 3 day(s)
Appellant DINESH V BAHIRWANI, MUMBAI
Respondent DCIT 20(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2016
Appeal Filed By Assessee
Bench Allotted D
Tribunal Order Date 18-10-2016
Assessment Year 2010-2011
Appeal Filed On 15-12-2014
Judgment Text
D IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND SHRI ASHWANI TANEJA ACCOUNTANT MEMBER ITA NO.7471/MUM/2014 ASSESSMENT YEAR: 2010-11 DINESH V. BAHIRWANI UNIT NO.605 BUSINESS SUITES 9 PLOOT NO.83 S.V. RD SANTACRUZ(W) MUMBAI-400054 / VS. DCIT 20 (2) MUMBAI- ( APPELLANT ) ( REVENUE ) P.A. NO . ABRPB3559K ITA NO.7497/MUM/2014 ASSESSMENT YEAR: 2010-11 ACIT 24(2) 612 PIRAMAL CHAMBERS LALBAUG MUMBAI-400012 / VS. DINESH V. BAHIRWANI UNIT NO.605 BUSINESS SUITES 9 PLOOT NO.83 S.V. RD SANTACRUZ(W) MUMBAI-400054 (REVENUE) (RESPONDENT ) P.A. NO . ABRPB3559K APPELLANT BY SHRI VIPUL SHAH (AR) REVENUE BY SHRI B.S. BIST ( SR. DR) ! ' # $% / DATE OF HEARING : 18/10/2016 # $% / DATE OF ORDER: 18/10/2016 / O R D E R DINESH V. BAHIRWANI 2 PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THESE CROSS APPEALS ARE FILED BY THE REVENUE AND ASSESSEE AGAINST SEPARATE ORDERS OF LD. CIT(A) PASS ED IN EACH OF THE AFORESAID ASSESSMENT YEARS. 2. DURING THE COURSE OF HEARING ARGUMENTS WERE MADE B Y SHRI VIPUL SHAH AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI B.S. BIST DEPARTMENTAL REPRESENTATIVE (SR. DR) ON BEHALF OF THE REVENUE. WE SHALL TAKE UP REVENUES APPEAL IN ITA NO. 7497/MUM/2014 FOR ASSESSMENT YEAR 2010-11 3. THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF LD. CIT(A) DATED 27.10.2014 PASSED AGAINST THE ASSESSME NT ORDER U/S 143(3) OF THE ACT DATED 28.03.2013 ON FOLLOWIN G GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF RS. 88 15 024/- ON ACCOUNT OF UNDERVALUATION OF CLOSING STOCK ON THE BASIS OF ADDITIONAL EVIDENCES SUBMITTED DURING APPEAL PROCEEDINGS WITHOUT GRANTIN G OPPORTUNITY TO THE AO FOR VERIFYING THE SAME AND TH US VIOLATING THE RULE 46A. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN GRANTING RELIEF OF RS. 8 93 558/- ON ACCOUNT OF DISALLOWANCE OF COMMISSION EXPENSES ONLY ON THE BASIS THAT TDS WAS DEDUCTED AN D THE TRANSACTIONS WERE THROUGH BANK WHEREAS THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE COMMISSION TRANSACTIONS NOR COULD HE PRODUCE ANY CONTRACT FOR THE SAME. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A PPEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A O BE RESTORED. DINESH V. BAHIRWANI 3 4. GROUND NO.1: IN THIS GROUND THE REVENUE HAS AGITATED THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS .88 15 024/- MADE BY THE AO ON ACCOUNT OF UNDERVALUATION OF CLOS ING STOCK. DURING THE COURSE OF HEARING IT WAS STATED BY THE LD. DR THAT SINCE THE ASSESSEE WAS NOT ABLE TO PROVE THAT CORRE CT METHOD OF ACCOUNTING WAS FOLLOWED THEREFORE AO HAD APPLIED AVERAGE COST OF VALUATION OF STOCK AND VALUATION OF CLOSING STOCK WAS DONE ACCORDINGLY. HE SUBMITTED THAT ADDITIONAL EVID ENCES WERE CONSIDERED BY THE LD. CIT(A). BUT LD. DR WAS NOT A BLE TO PIN POINT EXACTLY WHAT ADDITIONAL EVIDENCES WERE CONSID ERED BY THE LD. CIT(A). 4.1 . PER CONTRA LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING THE FI FO METHOD OF ACCOUNTING FOR VALUATION OF STOCK IN EARLIER YEA RS AS WELL AS SUBSEQUENT YEARS AND THE SAME HAS BEEN ACCEPTED BY THE DEPARTMENT AND NO ADDITION HAS BEEN EVER MADE IN TH IS REGARD. 4.2. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHO RITIES AND CONSIDERED BY BOTH THE SIDES. IT IS NOTED BY US THAT LD. CIT(A) ANALYSED THE FACTS OF THE CASE BEFORE DELETI NG THE ADDITION WITH FOLLOWING OBSERVATIONS: IN APPEAL IT HAS BEEN SUBMITTED THAT THE APPELLANT IS A PROPRIETOR OF TWO CONCERNS BY THE NAME OF M/S TRINITY TRADING AND M/S SATYA TEX BOTH OF WHICH ARE ENGAGED IN TRADING IN FABRIC. IT HAS BEEN FURTHER SUBMITTED THAT THE QUANTITATIVE DETAIL S OF OPENING STOCK (WITH VALUE) DETAILS OF PURCHASE DURING THE YEAR (WITH QUANTITY AND PURCHASE COST) AND QUANTITATIVE DETAILS OF CLOSING STOCK (WITH VAL UE) WERE DULY FURNISHED DURING THE SCRUTINY PROCEEDINGS ALONG WITH COPIES OF PURCHASE BILLS ETC. IT IS ALSO SUBMITTED THAT THE APPELLANT HAD CLARIFIED TO THE A .O. DINESH V. BAHIRWANI 4 THAT IT HAD BEEN CONSISTENTLY FOLLOWING THE FIFO METHOD OF VALUATION OF STOCK FOR THE PAST MANY YEAR S AND THAT THE SAID METHOD OF VALUATION HAD BEEN ACCEPTED BY THE DEPARTMENT IN PRECEDING YEARS. THE APPELLANT HAS ARGUED THAT THE OVERHEADS CONSIDERED BY THE A.O. ARE APPLICABLE IN THE HANDS OF A MANUFACTURER WHEREAS HE IS ONLY A TRADER. IT IS POINTED OUT THAT SINCE HE IS FOLLOWING FIFO METHOD THE AVERAGE COST METHOD IS NOT APPLICABLE IN HIS CA SE. IN LIGHT OF THESE FACTS IT IS STATED THAT THE ADDI TION OF RS. 88 15 024/- IS UNWARRANTED AND SHOULD BE DEL ETED. 5.1.2 I HAVE CAREFULLY CONSIDERED THE FACTS RELATED TO THIS ISSUE. ONE OF THE FUNDAMENTAL CANONS OF TAXATION IS THAT THE METHOD OF ACCOUNTING REGULARLY FOLLOWED BY AN ASSESSEE CANNOT BE DISTURBED UNLESS IT CAN BE DEMONSTRATED THAT THE PROFITS FOR THE YEAR CANNOT BE DERIVED FROM THE METHOD ADOPTED. IN PARTICULAR IN A CASE WHERE THE METHOD HAS BEEN FOUND ACCEPTABLE IN EARLIER YEARS THE REASON FOR REJECTION OF THE SAME SHOULD BE CLEARLY BROUGHT OUT. IT IS OPEN TO THE ASSESSEE TO CHOOSE THE METHOD BUT THE SAME SHOULD BE CONSISTENTLY ADOPTED AS HELD IN CIT V. MCMILLAN & C O. [19581 REPORTED AT 33 ITR 182 (SC). IN THE DECISION RENDERED IN THE CASE OF CIT V. ADVANCE CONSTRUCTION CO. (P.) LTD. [2005] REPORTED AT 275 ITR 30 (GUJ.)HELD AS FOLLOWS: 14. ........ IT IS NECESSARY TO NOTE THAT UNDER SECTIO N 145 OF THE ACT INCOME CHARGEABLE UNDER THE HEAD 'PR OFITS AND GAINS OF BUSINESS OR PROFESSION' SHALL BE COMPU TED IN ACCORD METHOD OF ACCOUNTING REGULARLY EMPLOYED BY THEASSESSEE. THE ONLY EXCEPTION IS: WHERE THE METHO D EMPLOYED IS SUCH THAT IN THE OPINION OF THE ASSESSI NG OFFICER INCOME CANNOT BE PROPERLY DEDUCED THEREFROM THE ASSESSING OFFICER SHALL THEN COMPUTE THE INCOME UPO N SUCH BASIS AND IN SUCH MANNER AS HE MAY DETERMINE. THE PROVISION THEREFORE SPECIFICALLY PROVIDES THA T THE CHOICE OF METHOD OF ACCOUNTING LIES WITH THE ASSESS EE THE ONLY CAVEAT BEING THAT IT HAS TO SHOW THAT THE CHOSEN METHOD HAS BEEN REGULARLY FOLLOWED. THE SECTION IS COUCHED IN MANDATORY TERMS AND THE DEPARTMENT IS BOUND TO ACCEPT THE ASSESSEE'S CHOICE OF METHOD DINESH V. BAHIRWANI 5 REGULARLY EMPLOYED EXCEPT FOR THE SITUATION WHERE IN THE ASSESSING OFFICER IS PERMITTED TO INTERVENE IN CAS E IT IS FOUND THAT TRUE INCOME PROFITS AND GAINS CANNOT BE ARRIVED AT BY THE METHOD EMPLOYED BY THE ASSESSEE. THE POSITION OF LAW IS FURTHER WELL-SETTLED THAT A REGU LAR METHOD ADOPTED BY AN ASSESSEE CANNOT BE REJECTED MERELY BECAUSE IT GIVES BENEFIT TO AN ASSESSEE IN CERTAIN YEARS.' 5.1.3 IT HAS ALSO BEEN HELD THAT THE A.O. MUST DEMONSTRATE THAT THE METHOD OF ACCOUNTING HAS RESULTED IN UNDER-ESTIMATION OF PROFITS AS HELD BY THE APEX COURT IN THE DECISION RENDERED IN THE CASE OF CIT V. REALEST BUILDERS & SERVICES LTD. REPORTED AT 170 TAXMAN 218 (SC). 'IN CASES WHERE THE DEPARTMENT WANTS TO TAX AN ASSE SSEE ON THE GROUND OF THE LIABILITY ARISING IN A PARTICU LAR YEAR IT SHOULD ALWAYS ASCERTAIN THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE IN THE PAST AND WHETHER CH ANGE IN METHOD OF ACCOUNTING WAS WARRANTED ON THE GROUND THAT PROFIT IS BEING TINDER ESTIMATED TINDER THE IM PUGNED METHOD OF ACCOUNTING. IF THE AO COMES TO THE CONCLU SION THAT THERE IS TINDER-ESTIMATION OF PROFITS HE MUST GIVE FACTS AND FIGURES IN THAT REGARD AND DEMONSTRATE TO THE COURT THAT THE IMPUGNED METHOD OF ACCOUNTING ADOPTE D BY THE ASSESSEE RESULTS IN UNDERESTIMATION OF PROFITS AND IS THEREFORE REJECTED. OTHERWISE THE PRESUMPTION WOUL D BE THAT THE ENTIRE EXERCISE IS REVENUE NEUTRAL.' 5.1.4 IN THE DECISION RENDERED IN THE CASE OF CIT V. MARGADARSI CHIT FUNDS (P.) LTD. [1985] 155 ITR 442 (AP) IT WAS HELD THAT THE A.O. MUST REFER TO THE INHERENT DEFECT IN THE SYSTEM AND RECORD A CLEAR FINDING THAT THE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE IS SUCH THAT CORRECT PROFITS CANNOT BE DEDUCED FROM THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. IT IS NOT OPEN TO THE ITO TO INTERVEN E AND SUBSTITUTE A DIFFERENT SYSTEM OF ACCOUNTING FRO M THE ONE THAT IS FOLLOWED BY THE ASSESSEE ON THE GR OUND THAT THE SYSTEM WHICH COMMENDS TO THE ITO IS BETTE R. 5.1.5 IT IS SEEN THAT THE APPELLANT HAS CONSISTENTL Y FOLLOWED THE FIFO METHOD OF STOCK VALUATION AS IS EVIDENT FROM THE AUDIT REPORTS FOR MIS TRINITY TRADING AND M/S SATYA TEX FOR A.Y. 2009-10 2010-11 AND DINESH V. BAHIRWANI 6 2011-12 FILED BY THE APPELLANT DURING THESE PROCEEDINGS. FROM THE ORDER PASSED U/S 143(3) FOR A.Y. 2009-10 PASSED IN THE CASE OF THE APPELLANT HIMSELF ON 27/12/2011 IT IS SEEN THAT THE A.O. HAS NOT MADE ANY ADDITION ON ACCOUNT OF STOCK VALUATION. SI MILAR IS THE POSITION IN THE CASE OF A.Y. 2011-12 WHEREIN ASSESSMENT IN THE CASE OF THE APPELLANT IS MADE VID E ORDER DATED 27.02.2014 WITHOUT TAKING EXCEPTION TO THE ME THOD OF VALUATION OF STOCK. FROM THE SUBMISSIONS MADE BY THE APPELLANT DURING SCRUTINY PROCEEDINGS DATED 04/03/ 2013 IT IS SEEN THAT THE APPELLANT HAD ENCLOSED COPIES O F BILLS ETC. IN SUPPORT OF THE VALUATION. ACCORDINGLY IN V IEW OF THE ABOVE FACTS AND THE SETTLED POSITION OF LAW IN THIS REGARD THE ADDITION OF RS.88 15 024/- CANNOT BE SUSTAINED AND IS DELETED. ACCORDINGLY GROUNDS NO. 1 TO 3 RAISED BY THE APPELLANT ARE ALLOWED. 4.3. WE HAVE CAREFULLY GONE THROUGH THE FACTS OF THE CA SE AND WELL REASONED FINDINGS RECORDED BY THE LD. CIT(A). IT IS NOTED THAT THE ASSESSEE HAS BEEN FOLLOWING FIFO METHOD FO R VALUATION OF ITS STOCKS IN ALL EARLIER AND SUBSEQUE NT YEARS AND NO ADDITION HAS EVER BEEN MADE. THE ASSESSMENT ORDE R WAS PASSED U/S 143(3) FOR A.Y. 2009-10 ACCEPTING FIFO M ETHOD OF STOCK VALUATION. IT IS FURTHER NOTED THAT ASSESSEE HAD SUBMITTED COPIES OF BILLS AND OTHER EVIDENCES TO JU STIFY VALUATION BASED UPON FIFO METHOD. FURTHER NOTHING WRONG COULD BE POINTED OUT BY THE LD. DR IN THE DETAILED AND WELL REASONED FINDINGS OF LD. CIT(A). FURTHER IT IS NOT ED BY US THAT CLOSING STOCK OF THE IMPUGNED YEAR HAD BECOME OPENI NG STOCK OF THE NEXT YEAR. THUS VIEWED FROM THIS ANGLE ALSO OVERALL TAX EFFECT TAKING BOTH THE YEARS INTO ACCOUNT WILL BE T AX-NEUTRAL. UNDER THESE CIRCUMSTANCES WE DO NOT FIND ANY NECES SITY TO MAKE INTERFERENCE IN THE ORDER OF LD. CIT(A) THERE FORE THIS GROUND IS REJECTED. 5. GROUND NO.2: IN THIS GROUND THE REVENUE HAS CHALLENGED DINESH V. BAHIRWANI 7 THE ACTION OF LD. CIT(A) IN DELETING THE COMMISSION EXPENSES OF RS.8 93 558/-. 5.1. IT WAS ARGUED BY THE LD. DR THAT THE SAID DISALLOW ANCE HAS BEEN DELETED MERELY ON THE GROUND THAT PAYMENT WAS MADE BY CHEQUE AND EVIDENCE OF RENDERING OF SERVICE S HAS NOT BEEN PROVED. IT WAS FURTHER ARGUED SIMILAR ISSUE HA D ARISEN IN A.Y. 2009-10 WHEREIN THE ISSUE HAS BEEN SENT BACK T O THE FILE OF THE AO BY THE TRIBUNAL. 5.2. PER CONTRA LD. COUNSEL RELIED UPON THE ORDER OF T HE LD. CIT(A). 5.3. WE HAVE GONE THROUGH THE FACTS OF THE CASE AS WELL AS ORDER OF THE TRIBUNAL OF A.Y. 2009-10 DATED 08.05.2 015. IT IS NOTED THAT COMMISSION PAID IN IDENTICAL FACTS AND CIRCUMSTANCES WAS DISALLOWED BY THE AO IN A.Y. 2009 -10. THE MATTER REACHED BEFORE THE TRIBUNAL AND TRIBUNAL HAS SENT THIS ISSUE BACK TO THE FILE OF THE AO WITH FOLLOWING OBS ERVATIONS: 7. WE HAVE HEARD THE PARTIES AND PERUSED THE MAT ERIAL ON RECORD. THE CASE OF BOTH THE PARTIES BEFORE US WAS ALONG WI TH THE SAME LINES. WE FIRSTLY OBSERVE THAT THE PRIMARY REA SON OF THE A.O. IN DISALLOWING THE EXPENDITURE WHICH HE D OES IN TOTO IS THE NON-FURNISHING OF ANY EVIDENCE TOWARD THE RENDERING OF THE SERVICES FOR WHICH COMMISSION ON S ALES HAS BEEN PAID. IN OTHER WORDS THE ASSESSEES CASE WAS FOUND DEFICIENT BY HIM INSOFAR AS SATISFACTORILY PR OVING ITS CLAIM WAS CONCERNED. THE A.O. NOWHERE DOUBTED THE GENUINENESS OF THE EXPENDITURE EXCEPT AS IT APPEA RS IN THE CASE OF PARUL BAHIRWANI A RELATIVE WHOSE PLAC E OF RESIDENCE; THE ASSESSEE CONTENDING THE PAYEES TO BE OUT STATION PARTIES HAD NOT BEEN SPECIFIED. IN FACT T HE DOUBT APPARENTLY AROSE IN THE MIND OF THE A.O. AS WE INF ER FROM HIS CALLING FOR CONFIRMATIONS AND SUPPORTING DOCUME NTS IN ALL CASES AS AGAINST FROM A SELECTED FEW INITIALLY ON ACCOUNT OF ASSESSEE FURNISHING XEROX COPIES OF THE DINESH V. BAHIRWANI 8 CONFIRMATIONS AND WHICH ARE DEFINITELY NOT ADMISSI BLE. HOW COULD THEN THE A.O. BE SAID TO HAVE FAULTED I N HOLDING THE ASSESSEE TO HAVE NOT SATISFACTORILY PRO VED ITS CLAIM FOR THE RELEVANT YEAR. THE LD. CIT(A) REVERSE D HIS FINDINGS WITHOUT IN ANY MANNER SHOWING THE SAME AS INFIRM. IT IS NOT THE QUESTION OF THE A.O. BRINGING CONTRARY MATERIAL ON RECORD AS STATED BY HIM. THE LAW DOES NOT ENJOIN UPON THE ASSESSING AUTHORITY TO IN ORDER TO DISALLOW A CLAIM FOR EXPENDITURE DISPROVE THE SAME BUT THE ASSESSEE TO PROVE THE SAME; THE PAYMENT THROUGH BAN KING CHANNEL WHICH WOULD ONLY BE PROVED BY SUBMISSION O F BANK STATEMENT/S (OR THE BANK CERTIFICATE OR THE L IKE) AND WHICH WAS NOT FURNISHED DESPITE BEING CALLED FOR W OULD THOUGH A POSITIVE ATTRIBUTE IS NOT SACROSANCT NOR IS THE FACT OF THE SAME BEING SUBJECT TO TDS. THE PRIMARY CHARGE OF THE A.O. AS AFORE-STATED IS TOWARD NON-EVIDENCI NG THE RENDERING OF SERVICE AND WHICH HAS NOT BEEN REBUTT ED IN ANY MANNER. THE ASSESSEE HAS NO-WHERE EXPLAINED THE MODUS OPERANDI OR EVEN THE MANNER IN WHICH THE SERV ICES WERE RENDERED WHICH IS SINE QUA NON FOR THE CLAIM OF THE COMMISSION BEING ONLY THE SERVICE CHARGES IN RELAT ION THERETO. SOME OF THE CLASSICAL CASES IN RESPECT OF EXPENDITURE IN GENERAL (REFER: RAM BAHADUR THAKUR L TD. VS. CIT [2003] 261 ITR 390 (KER); CIT VS. NAVSARI COTTON & SILK MILLS [1982] 135 ITR 546 (GUJ)) AND COMMISSION EXPENDITURE IN PARTICULAR (REFER: LACHMINARAYAN MAD AN LAL VS. CIT [1972] 86 ITR 439 (SC); LAKSHMIRATAN COTTON MILLS CO. LTD. VS. CIT [1969] 73 ITR 634 (SC)) ARE REFERR ED TO DRAW HOME THE POINT. THE FINDINGS BY THE LD. CIT(A) ARE BASED ON BALD CL AIMS DE HORS ANY MATERIAL ON RECORD. MERELY MAKING GENERAL STATEMENTS WITHOUT BASIS IN ANY MATERIAL ON RECORD WHICH HAS MOVED THE LD. CIT(A) WOULD NOT PROVE A CLAIM. HIS TAKING COGNIZANCE OF THE COPIES OF THE CONFIRMATION S I.E. WHICH ARE INADMISSIBLE IN EVIDENCE CANNOT ALSO TO BE REGARDED AS VALID. EVEN NO FINDING QUA COMMISSION T O PARUL BAHIRWANI A RELATIVE STANDS ISSUED. WE ACCORDINGLY VACATING HIS FINDINGS RESTORE THE MAT TER BACK TO THE FILE OF THE A.O. TO ALLOW THE ASSESSEE AN OP PORTUNITY TO PRESENT ITS CASE BEFORE HIM. THE A.O. SHALL ON HIS PART PROCEED REASONABLY; THAT BEING THE HALLMARK OF ANY GOOD ASSESSMENT SUSTAINABLE IN LAW. THE BACKDROP UNDER DINESH V. BAHIRWANI 9 WHICH THE EXPENDITURE STANDS INCURRED IS AS OVERL Y EMPHASIZED BY THE LD. CIT(A) NEVERTHELESS RELEVAN T AND TO BE ACCORDED DUE REGARD. COMMERCIAL EXPEDIENCY IS AN IMPORTANT INGREDIENT AND WHICH GETS NO DOUBT SUPPO RTED BY THE FACT OF REGULAR EXPENDITURE WHICH WE OBSERV E TO VARY OVER A WIDE RANGE AND WHICH MAY ITSELF NOT BE DETERMINATIVE BEING RATHER IN SOME CIRCUMSTANCES A POINTER TO GENUINENESS. AGAIN ARE THE PERSONS TO W HOM THE COMMISSION IS PAID THE SAME FROM YEAR TO YEAR WHICH WOULD WHERE SO ALSO ESTABLISH THEM AS REGULAR COMMISSION AGENTS AND TOWARD WHICH THE A.O. HAD IN FACT CALLED FOR THEIR RETURNS ETC. WE LEAVE IT AT THAT; THE SAME BEING THE PURVIEW OF THE ASSESSING AUTHORITY ONLY ADDING THAT HIS ADJUDICATION SHOULD SATISFY THE TEST OF REASONABLENESS AND IN ACCORDANCE WITH THE LAW IN TH E FACTS AND CIRCUMSTANCES OF THE CASE AS VALIDATED B Y THE MATERIAL ON RECORD. WE DECIDE ACCORDINGLY. 5.4. NO DISTINCTION HAS BEEN MADE ON FACTS BY THE EITHE R PARTY BEFORE US. THUS WE SEND THE ISSUE BACK TO THE FILE OF THE AO ALONG WITH SAME DIRECTIONS AS WERE GIVEN BY THE TRI BUNAL IN EARLIER YEARS. THE ASSESSEE SHALL BRING ON RECORD R EQUISITE EVIDENCES TO SUBSTANTIATE RENDERING OF SERVICES BY THE AGENTS. THIS GROUND MAY BE TREATED AS ALLOWED FOR STATISTIC AL PURPOSES. NOW WE SHALL TAKE ASSESSEES APPEAL IN ITA NO.7471/MUM/2014 6. THE ASSESSEE HAS FILED ON FOLLOWING GROUNDS: 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND L AW THE LD. COMMISSIONER OF INCOME TAX; - APPEAL (CIT-A) ER RED IN DISALLOWING COMMISSION OF RS. 7 00 000/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND L AW THE ID. CIT-A HAS NOT CONSIDERED THE FACT AND EVIDENCES SUBMITTED IN RELATION TO COMMISSION. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE I D. CIT-A ERRED IN DISALLOWING THE ABOVE ADDITIONS AND THUS U PHELD DINESH V. BAHIRWANI 10 PENALTY PROCEEDINGS U/S 271(1) (C) OF THE INCOME TA X ACT 1961. THE APPELLANT CRAVES LEAVE TO ADD AMEND ALTER MO DIFY SUBSTITUTE OR DELETE ANY OR ALL THE ABOVE GROUND(S) OF APPEAL. 6.1. IT IS NOTED THAT THE ISSUE INVOLVED WITH REGARD TO DISALLOWANCE OF COMMISSIONS IS IDENTICAL TO GROUND NO.2 OF REVENUES APPEAL. SINCE WE HAVE SENT THIS ISSUE BAC K TO THE FILE OF THE AO THIS GROUND IS ALSO SENT BACK TO TH E FILE OF THE AO WITH OUR DIRECTIONS AS GIVEN ABOVE. THE AO IS DI RECTED TO FOLLOW OUR ORDER. THESE GROUNDS MAY BE TREATED AS A LLOWED FOR STATISTICAL PURPOSES. 8. AS A RESULT BOTH APPEALS MAY BE TREATED AS PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CONCL USION OF HEARING. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER ! ' MUMBAI; ' DATED : 18/10/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. ) *+ / THE APPELLANT 2. -*+ / THE RESPONDENT. 3. .$ . ! / ( ) ) / THE CIT MUMBAI. 4. .$ . ! / / CIT(A)- MUMBAI 5. 23 45 .$ )% 45$6 ! ' / DR ITAT MUMBAI 6. 7 8 ' / GUARD FILE. / BY ORDER - 2) //TRUE COPY// / (DY./ASSTT. REGISTRAR) ! ' / ITAT MUMBAI