ASST CIT 11(3)(1), MUMBAI v. TRAIL BLAZER TOURS(INDIA) P.LTD, MUMBAI

ITA 7774/MUM/2014 | 2011-2012
Pronouncement Date: 07-10-2016 | Result: Allowed

Appeal Details

RSA Number 777419914 RSA 2014
Assessee PAN AACCT6365J
Bench Mumbai
Appeal Number ITA 7774/MUM/2014
Duration Of Justice 1 year(s) 9 month(s) 7 day(s)
Appellant ASST CIT 11(3)(1), MUMBAI
Respondent TRAIL BLAZER TOURS(INDIA) P.LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-10-2016
Appeal Filed By Department
Order Result Allowed
Bench Allotted E
Tribunal Order Date 07-10-2016
Assessment Year 2011-2012
Appeal Filed On 31-12-2014
Judgment Text
E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI BEFORE SHRI C. N. PRASAD JUDICIAL MEMBER AND SHRI RAMIT KOCHAR ACCOUNTANT MEMBER ./ I.T.A. NO.7774 /MUM/2014 ( / ASSESSMENT YEAR : 2011-12) ASSISTANT COMMISSIONER OF INCOME TAX-11(3)(1) ROOM NO. 427 AAYAKAR BHAVAN M K MARG MUMBAI-400 020 / V. TRAIL BLAZER TOURS (INDIA) PRIVATE LIMITED 170 B WING JEENA HOUSE O M SAGAR SAHAR ANDHERI EAST MUMBAI-400 099 ./ PAN : AACCT6365J ( / APPELLANT ) .. ( / RESPONDENT ) REVENUE BY SHRI VISHWAS JADHAV DR ASSESSEE BY : MS. AARTI SATHE / DATE OF HEARING : 04-08-2016 / DATE OF PRONOUNCEMENT : 07-10-2016 / O R D E R PER RAMIT KOCHAR ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE BEING ITA NO. 7 774/MUM/2014 IS DIRECTED AGAINST THE APPELLATE ORDER DATED 22 ND OCTOBER 2014 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 18 M UMBAI (HEREINAFTER CALLED THE CIT(A)) FOR THE ASSESSMENT YEAR 2011- 12 THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSMENT ORDER DATED 20 TH FEBRUARY 2014 PASSED BY THE LEARNED ASSESSING OFF ICER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INC OME TAX ACT 1961 (HEREINAFTER CALLED THE ACT). ITA 7774/MUM/2014 2 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN T HE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW WAS THE LD. CIT(A) JUSTIFIED IN DELETING THE AD DITION OF RS.17 91 690/- MADE ON ACCOUNT OF NON-DEDUCTION OF TA X(U/SEC. 194I) ON RENT PAID ON THE BASIS OF ADDITIONAL EVIDENCES SUB MITTED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS NOR REMAN D PROCEEDINGS AND HENCE SHOULD NOT HAVE BEEN ADMITTED AS PER RULE 46A OF THE I T RULES 1962. 2.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW WAS THE LD. CIT(A) JUSTIFIED IN DELETING THE A DDITION MADE ON ACCOUNT OF NON-RECONCILIATION OF ENTRIES IN 26AS WITHO UT APPRECIATING THAT THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE D URING THE APPELLATE PROCEEDINGS WERE NEITHER FILED DURING ASSE SSMENT PROCEEDINGS NOR REMAND PROCEEDINGS AND HENCE SHOULD NOT HAVE BEE N ADMITTED AS PER RULE 46A OF THE I T RULES 1962. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW WAS THE LD. CIT(A) JUSTIFIED IN NOT APPRECIATING THE RATIO LAID DOWN BY THE 4. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O. BE RESTORED . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF PROVIDING SERVICES RELATING TO TOURS A ND TRAVEL. IT WAS OBSERVED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDIN GS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT THAT THE ASSESSEE HAS MAD E SHORT DEDUCTION OF TAX DEDUCTED AT SOURCE ON RENT TO THE TUNE OF RS.1 79 1 69/- AS UNDER: S.NO. NAME OF THE PARTY TOTAL RENT PAID DURING THE YEAR(IN RS.) TDS TO BE DEDUCTED @10% (IN RS.) TDS ACTUALLY DEDUCTED (IN RS.) DIFFERENCE (IN RS.) ITA 7774/MUM/2014 3 1 ORION PROJECTS 26 44 152 2 64 415 2 39 724 24 691 2. NITRAS EXPORTS PRIVATE LIMITED 14 44 930 1 44 493 18 177 1 26 316 3. CRYSTAL COMPLEX PRIVATE LIMITED 26 30 258 2 63 026 2 38 464 24 562 4. SEEMA C. JAIN 2 88 000 28 800 25 200 3 600 TOTAL 7 00 734 5 21 565 1 79 169 THE ASSESSEE DID NOT FURNISHED ANY EXPLANATION AS TO WHY TAX HAS NOT BEEN DEDUCTED AS PER RATES PRESCRIBED IN THE ACT. THUS THE AO ADDED CORRESPONDING EXPENDITURE OF RS.17 91 690/- TO THE INCOME OF THE ASSESSEE VIDE ASSESSMENT ORDER DATED 20-02-2014 PASSED BY TH E AO U/S. 143(3) OF THE ACT. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 20.02.20 14 PASSED BY THE AO U/S. 143(3) OF THE ACT THE ASSESSEE FILED FIRST A PPEAL WITH LEARNED CIT(A) AND CONTENDED THAT THE AO CALCULATED TDS ON SERVICE TAX COMPONENT INCLUDED IN THE RENT AND THE DETAILS WERE FURNISHED BEFORE THE LEARNED CIT(A). FURTHER IT WAS SUBMITTED THAT W.R.T. NITRAS EXPORTS PRIVATE LI MITED THE PARTY HAS GIVEN LOW DEDUCTION OF TAX AT SOURCE CERTIFICATE AUTHORIZ ING TO DEDUCT TAX AT SOURCE @2% INSTEAD OF 10%. THE ASSESSEE RELIED ON CBDT CIR CULAR NO 4 DATED 28-04- 2008 WHEREIN THE CBDT CLARIFIED THAT THE SERVICE TA X AMOUNT SHOULD BE EXCLUDED WHILE CALCULATING TDS ON RENT AS THE SERVI CE TAX IS COLLECTED TO BE PAID TO GOVERNMENT. IN REMAND REPORT ALSO THE AO SU BMITTED THAT THERE IS SHORT DEDUCTION OF TDS ON RENTAL PAYMENTS. THE LEAR NED CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE ON THIS GROUND RELYING ON CB DT CIRCULAR NO 4 DATED 28-04-2008 THAT TAX IS NOT TO BE DEDUCTED AT SOURCE UNDER SECTION 194I OF THE ACT ON SERVICE TAX COMPONENT AND SHALL BE DEDUC TED ON RENTAL COMPONENT ONLY VIDE APPELLATE ORDER DATED 22-10-2014 PASSED B Y LEARNED CIT(A). ITA 7774/MUM/2014 4 5. AGGRIEVED BY THE APPELLATE ORDER DATED 22-10-201 4 PASSED BY THE LEARNED CIT(A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUN AL WHEREIN LEARNED DR CONTENDED THAT ADDITIONAL EVIDENCES WERE FILED BY T HE ASSESSEE BEFORE THE LEARNED CIT(A) WHICH WERE NOT FILED BEFORE THE AO I N ASSESSMENT PROCEEDINGS NOR IN REMAND PROCEEDINGS AND HENCE LEARNED CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCES WITHOUT FORWARDING THE SAME TO THE AO IN VIOLATION OF RULE 46A OF INCOME TAX RULES 1962 WHILE THE LEARN ED AR RELIED ON THE ORDERS OF LEARNED CIT(A) AND SUBMITTED THAT THE TAX CANNOT BE DEDUCTED AT SOURCE U/S 194I OF THE ACT ON SERVICE TAX COMPONENT WHILE IT CAN BE ONLY DEDUCTED AT RENT COMPONENT AS PER CBDT CIRCULAR NO 4 DATED 28-04-2008. FURTHER THE LEARNED COUNSEL SUBMITTED THAT WITH RES PECT TO NITRAS EXPORTS PRIVATE LIMITED THE SAID PARTY HAS SUBMITTED LOWE R DEDUCTION TDS CERTIFICATE ISSUED BY THE REVENUE TO DEDUCT TDS@ 2%INSTEAD OF 1 0%. ON BEING ASKED TO PRODUCE THE SAID CERTIFICATE OF LOWER DEDUCTION OF TDS FURNISHED BY NITRAS EXPORTS PRIVATE LIMITED THE LEARNED COUNSEL FOR TH E ASSESSEE STATED THAT THE SAME SHALL BE PRODUCED WITH COPY TO LEARNED DR. IT IS THE SAY OF LEARNED COUNSEL FOR THE ASSESSEE THAT THE POWERS OF THE LEA RNED CIT(A) IS CO-TERMINUS WITH POWERS OF THE AO. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE HAS PAID RENTALS ON WHICH TAX WAS DEDUCTED AT SOURCE AS PER CHART PRODUCED IN PRECEDI NG PARAS. THE ASSESSEE DID NOT DEDUCTED TAX AT SOURCE U/S 194I OF THE ACT ON SERVICE TAX COMPONENT AS PER CBDT CIRCULAR NO 4 DATED 28-04-2008 FOR WHIC H WE ARE IN AGREEMENT WITH THE CONTENTIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE WHICH HAS ALSO BEEN UPHELD BY THE LEARNED CIT(A). THE REVENUE IS AGGRIEVED IN THE INSTANT APPEAL THAT THE ADDITIONAL EVIDENCES BEING ADMITTED BY THE LEARNED CIT(A) IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES 1962 AS THE SAME WERE NOT FORWARDED BY THE LEARNED CIT(A) TO THE AO FOR VERIF ICATION AND HENCE THESE ADDITIONAL EVIDENCES WERE NOT EVALUATED BY THE LEAR NED AO IN THE ASSESSMENT ITA 7774/MUM/2014 5 PROCEEDINGS NOR IN THE REMAND PROCEEDINGS. THUS FO R LIMITED PURPOSES OF VERIFICATION OF THE CLAIM OF THE ASSESSEE THAT THE SERVICE TAX COMPONENT WAS SEPARATELY CHARGED FROM THE RENT PAID BY THE ASSES SEE AND THE ASSESSEE DULY DEDUCTED TAX AT SOURCE ON RENT PAID U/S 194I OF THE ACT AND IT IS ONLY ON SERVICE TAX COMPONENT NO TAX WAS DEDUCTED AT SOUR CE U/S 194I OF THE ACT WE ARE REMANDING THE MATTER BACK TO THE FILE OF THE AO FOR LIMITED VERIFICATION AS STIPULATED BY US AS ABOVE. SECONDLY WITH RESPECT T O RENT PAID TO NITRAS EXPORTS PRIVATE LIMITED THE ASSESSEE DEDUCTED TDS @2% INSTEAD OF 10% AS MANDATED U/S 194I OF THE ACT. THE ASSESSEE DID NOT PRODUCE THE LOWER DEDUCTION OF TAX AT SOURCE CERTIFICATE ISSUED BY TH E REVENUE AUTHORIZING DEDUCTION OF TDS @2% INSTEAD OF 10% U/S. 194I OF TH E ACT BEFORE THE TRIBUNAL AS STATED DURING THE COURSE OF HEARING BEF ORE THE BENCH BY LEARNED COUNSEL FOR THE ASSESSEE AND HENCE WE ARE REMANDING THE MATTER BACK TO THE AO WHEREBY THE ASSESSEE SHALL PRODUCE THE SAID CERT IFICATE OF LOWER DEDUCTION OF TAX AT SOURCE BEFORE THE AO FOR NECESSARY VERIFI CATIONS AND EXAMINATION. WITH THE ABOVE STATED DIRECTIONS THE GROUND NO 1 I S DISPOSED OFF. WE ORDER ACCORDINGLY. 7. THE NEXT EFFECTIVE GROUND RAISED BY THE REVENUE IS WITH RESPECT TO DELETION BY THE LEARNED CIT(A) OF ADDITION MADE BY THE AO WI TH RESPECT TO DIFFERENCE IN THE INCOME AS REPORTED IN 26AS VIS-A-VIS WITH INCOM E AS REPORTED IN THE RETURN OF INCOME FILED WITH REVENUE BY ADMITTING AD DITIONAL EVIDENCES WITHOUT COMPLYING WITH THE REQUIREMENTS OF RULE 46A OF INCO ME TAX RULES 1962 WHERE IN THE SAID ADDITIONAL EVIDENCES WERE NOT FIL ED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS AS WELL DURING THE REMAND PR OCEEDINGS. IT WAS OBSERVED BY THE AO THAT THERE IS A MISMATCH OF THE INCOME REPORTED IN AS 26 VIS--VIS INCOME AS RECORDED IN BOOKS OF ACCO UNTS. THE ASSESSEE DID NOT GIVE RECONCILIATION DETAILS TO RECONCILE THE TWO FI GURES OF THE RECEIPTS BASED ON AS26 AND BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESS EE . THUS THE AO MADE ITA 7774/MUM/2014 6 AN ADDITION OF RS.1 74 09 425/- BASED ON DIFFERENCE BETWEEN THE RECEIPTS DECLARED IN THE PROFIT AND LOSS ACCOUNT VIS--VIS R ECEIPTS APPEARING IN 26AS DATABASE AS UNDER :- A) INTEREST INCOME U/S. 194A : S.NO. NAME OF THE PARTY INCOME AS PER 26AS INCOME AS PER P & L ACCOUNT DIFFERANCE 1. ICICI BANK LIMITED RS.7 533/- NIL RS.7 533/- 2. KOTAK MAHINDRA BANK LIMITED RS.89 265/- NIL RS.89 265/- TOTAL RS.96 798/- NIL RS.89 265/- B) COMMISSION INCOME U/S. 194H: S.NO. INCOME AS PER 26AS INCOME AS PER P & L ACCOUNT DIFFERENCE 1. RS.4 99 45 153/- RS.3 26 44 993/- RS.1 73 00 160/- C) RENT INCOME U/S 194I: S.NO. NAME OF THE PARTY INCOME AS PER 26AS INCOME AS PER P & L ACCOUNT DIFFERANCE 1. TATA AIG GENERAL INSURANCE RS.20 000/- NIL RS.20 000/- TOTAL RS.20 000/- NIL RS.20 000/- ITA 7774/MUM/2014 7 THUS THE AO MADE AN ADDITION OF RS.1 74 09 425/- B ASED ON DIFFERENCE BETWEEN THE RECEIPTS DECLARED IN THE PROFIT AND LOS S ACCOUNT VIS--VIS RECEIPTS APPEARING IN 26AS DATABASE VIDE ASSESSMENT ORDER DA TED 20-02-2014 PASSED BY THE AO U/S 143(3) OF THE ACT. 8.AGGRIEVED BY THE ASSESSMENT ORDER DATED 20-02-201 4 PASSED BY THE AO U/S 143(3) OF THE ACT THE ASSESSEE FILED FIRST APPEAL WITH THE LEARNED CIT(A) AND CONTENDED THAT IF ONE GOES THROUGH THE SCHEDULE 13 ANNEXED TO AND FORMING PART OF THE ACCOUNTS IT IS CLEARLY STATED THAT :- BUSINESS AUXILIARY SERVICES RS. 30 17 339/- COMMISSION INCOME(NET) RS.3 26 44 993/- INTEREST/BANKS RS. 2 63 281/- AS PER BOOKS OF ACCOUNTS DETAILS OF COMMISSION ARE AS FOLLOWS: COMMISSION RECEIVED RS.4 63 48 908.11 LESS: DISCOUNT ALLOWED RS.(1 36 03 915.10) -------------------------- NET COMMISSION INCOME CREDITED TO P & L A/C RS.3 26 44 993.01 --------------------------- HENCE AS PER BOOKS OF ACCOUNTS GROSS INCOME IS BIF URCATED AS FOLLOWS: GROSS INCOME RS.4 62 48 180.35 BUSINESS AUXILIARY RS. 30 00 000.00 ------------------------ TOUR INCOME RS.5 01 52 113.17 ------------------------- I IT WAS SUBMITTED BY THE ASSESSEE BEFORE LEARNED CIT (A) THAT INCOME AS PER FORM 26AS IS RS. 4 99 45 153.00 WHILE INCOME AS PER INCOME AND EXPENDITURE ACCOUNT IS RS 5 01 52 113.17. IT WAS AL SO SUBMITTED THAT THE INTEREST INCOME OF RS.2 63 281/- WAS CLEARLY REFLEC TED IN THE SCHEDULE 14 IN ITA 7774/MUM/2014 8 WHICH TAX DEDUCTED AT SOURCE WAS AN AMOUNT OF RS.96 798/- WHICH IS REFLECTED IN FORM NO. 26AS IT WAS SUBMITTED BY THE ASSESSEE BEFORE LEARNED CIT(A) THAT INCOME SHOWN IN BOOKS OF ACCOUNTS IS MO RE THAN INCOME SHOWN IN FORM NO. 26AS.IT WAS SUBMITTED THAT IN SCHEDULE 13 OTHER SERVICES INCOME OF RS.1 41 12 922/- INCLUDES TATA AIG GENERAL INSURANC E CO. LTD COMMISSION OF RS.20 000.00 . IT WAS SUBMITTED THAT THE INCOME AS DISCLOSED IN PROFIT AND LOSS ACCOUNT AS PER SCHEDULE 13 UNDER THE HEADING I NCOME FROM SERVICES SUB-HEADING COMMISSION INCOME(NET) RS.3 26 44 993/- WHICH IS THE OUTCOME OF GROSS AMOUNT OF COMMISSION RECEIVED OF RS. 4 62 48 908/- LESS DISCOUNT GIVEN RS.1 36 03 915/- .IT WAS SUBMITTED THAT NET C OMMISSION IS DISCLOSED IN PROFIT AND LOSS ACCOUNT WHICH IS NORMAL ACCOUNTING PRACTICE FOLLOWED BY THE ASSESSEE YEAR AFTER YEAR AND CERTIFIED BY THE AUDIT ORS. THUS IT WAS SUBMITTED THAT THE NET AMOUNT DISCLOSED AS PER PROFIT AND LOS S ACCOUNT TALLIES WITH INCOME AS PER FORM NO 26AS. THE LEARNED CIT(A) OBSERVED THAT THE AO ASKED THE A SSESSEE TO RECONCILE THE INCOME BETWEEN AS DECLARED IN BOOKS OF ACCOUNTS AND AS REFLECTED IN FORM NO 26AS BUT THE ASSESSEE RECONCILED ONLY THE TDS FIGUR ES AS INDICATED IN FORM NO 26AS WITH TDS AS REFLECTED IN BOOKS OF ACCOUNTS. TH E LEARNED CIT(A) OBSERVED THAT THE ASSESSEE HAS SUBMITTED THAT THE DIFFERENCE IS ON ACCOUNT OF ACCOUNTING FOR NET COMMISSION IN BOOKS OF ACCOUNTS DUE TO ADJUSTMENT OF DISCOUNT GIVEN OF RS.1 36 03 915/- FROM THE GROSS C OMMISSION OF RS.4 62 48 908/- TO REFLECT NET COMMISSION INCOME OF RS.3 26 44 993/- IN THE BOOKS OF ACCOUNTS WHILE THE FORM NO 26AS REFLEC TED GROSS COMMISSION INCOME WHICH WAS SUBMITTED TO BE NORMAL ACCOUNTIN G PRACTICE FOLLOWED BY THE FIRM IN THE EARLIER YEARS. THE NET AMOUNT OF CO MMISSION AMOUNTS WERE CERTIFIED BY THE AUDITORS AS DISCLOSED IN THE PROFI T AND LOSS ACCOUNT. IT WAS ALSO OBSERVED BY THE LEARNED CIT(A) THAT THE ASSESS EE SUBMITTED THAT THERE WAS NO RENTAL INCOME FROM TATA AIG GENERAL INSURANC E CO. LTD BUT THE SAID INCOME WAS FROM PROFESSIONAL SOURCES AND CREDITED T O TOUR INCOME. IT WAS ITA 7774/MUM/2014 9 OBSERVED BY THE LEARNED CIT(A) THAT THERE WAS NO DI SCREPANCY AS POINTED BY THE AO. THE LEARNED CIT(A) CALLED FOR REMAND REPORT FROM THE AO WHEREBY THE AO SUBMITTED THAT THE ASSESSEE ONLY RECONCILED THE TDS AMOUNT AND DID NOT RECONCILED THE DIFFERENCE IN THE RECEIPTS AS REFLEC TED IN THE PROFIT AND LOSS ACCOUNT WITH FORM NO AS 26 AND IT WAS SUBMITTED BY THE AO THAT DIFFERENCE TO THE TUNE OF RS.1 74 09 425/- WAS THUS ADDED BY T HE AO TO THE TOTAL INCOME OF THE ASSESSEE . THE LEARNED CIT(A) DELETED THE ADDITIONS MADE BY TH E AO AND ALLOWED THE APPEAL OF THE ASSESSEE ON THIS GROUND AS THE ASSESS EE HAS SHOWN TOTAL RECEIPT OF RS.5 01 52 113/- IN THE BOOKS OF ACCOUNTS AGAINS T ENTRIES OF RS.4 99 45 153/- SHOWN IN FORM NO 26AS WHICH MEANS THAT THE ASSESSEE HAS ITSELF SHOWN RECEIPTS MORE THAN GIVEN IN THE FORM N O 26AS AND IT WAS MAINLY DUE TO THE METHOD OF ACCOUNTING WHEREBY NET COMMISS ION AFTER DEDUCTING DISCOUNT FROM GROSS COMMISSION IS REFLECTED IN PROF IT AND LOSS ACCOUNT WHILE FORM NO 26AS REFLECTED GROSS COMMISSION WHICH LED TO RECONCILIATION OF COMMISSION INCOME AFTER ADJUSTING DISCOUNT OF RS.1 36 03 915/- ALLOWED. THUS AS PER BOOKS GROSS COMMISSION INCOME AS PER B OOKS CAME TO RS.4 62 48 180/- (BEFORE ADJUSTING DISCOUNT) BUSIN ESS AUXILIARY INCOME OF RS. 30 17 339/- AND TOUR INCOME OF RS.9 03 932/- TO TALING TO RS.5 01 52 113/- AGAINST INCOME AS DECLARED IN FORM NO AS26 OF RS.4 99 45 153/-. THUS THE INCOME AS PER PROFIT AN D LOSS ACCOUNT (BEFORE ADJUSTING DISCOUNT ON COMMISSION) WAS HIGHER THAN I NCOME AS PERFORM NO 26AS AND HENCE ADDITION TO THE INCOME OF RS.1 74 09 425/- WAS DELETED BY LEARNED CIT(A) VIDE APPELLATE ORDERS DATED 22.10.20 14. 9. AGGRIEVED BY THE APPELLATE ORDER DATED 22-10-201 4 PASSED BY LEARNED CIT(A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUN AL AND IT IS THE SAY OF THE LEARNED DR THAT THE LEARNED CIT(A)HAS ADMITTED ADDI TIONAL EVIDENCES FILED BY THE ASSESSEE IN APPELLATE PROCEEDINGS WITHOUT SENDI NG THE SAME TO THE AO FOR ITA 7774/MUM/2014 10 HIS COMMENTS AS MANDATED UNDER RULE 46A OF INCOME T AX RULES 1962 AND HENCE THE ORDER OF LEARNED CIT(A) IS NOT SUSTAINABL E IN LAW. IT WAS SUBMITTED BY LEARNED DR THAT DESPITE SEVERAL REMINDERS THE ASSESSEE DID NOT COME FORWARD TO GIVE DETAILS BEFORE THE AO TO RECONCILE THE DIFFERENCE BETWEEN THE AMOUNT REFLECTED AS COMMISSION INCOME IN PROFIT AND LOSS ACCOUNT AS PER BOOKS OF ACCOUNTS VIS--VIS THE AMOUNT OF INCOME AS REFLECTED IN AS 26. THE LEARNED DR SUBMITTED THAT THE MATTER BE REMANDED TO THE AO FOR NECESSARY VERIFICATIONS AND EXAMINATION. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDERS OF THE LEARNED CIT(A). THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTIONS TO THE PAPER BOOK FILED AND SUB MITTED THAT REPLY WAS GIVEN WHEREBY DETAILS OF TDS AS PER FORM 26AS AND B IFURCATION OF TDS WAS FURNISHED BEFORE THE AO VIDE REPLY DATED 14-02-2014 (PB/PAGE58). IT WAS SUBMITTED THAT ON 10-3-2014 I.E. AFTER PASSING OF A N ASSESSMENT ORDER DATED 20-02-2014 BY THE AO U/S. 143(3) OF THE ACT AN RE CTIFICATION APPLICATION WAS MOVED WITH THE AO U/S 154 OF THE ACT ON 12-03-2014 WHICH IS PLACED AT PAPER BOOK / PAGE 59-61 66-75 . THE REPLIES SUBMITT ED BEFORE LEARNED CIT(A) IN APPELLATE PROCEEDINGS IS ALSO PLACED IN PAPER BO OK PAGE 62-65. THE REMAND REPORT SENT BY THE AO IS PLACED IN PAPER BOOK 76-78 . THE REPLIES SUBMITTED BY THE ASSESSEE BEFORE LEARNED CIT(A) IN RESPONSE TO T HE REMAND REPORT OF THE AO IS PLACED IN PAPER BOOK PAGE 79-81. WE HAVE GONE THROUGH ALL THE RELEVANT DOCUMENTS AS MENTIONED ABOVE AND PLACED IN PAPER BOOK AND THE SUBMISSIONS OF BOTH TH E RIVAL PARTIES INCLUDING ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE DID N OT FILED COMPLETE DETAILS OF GROSS COMMISSION INCOME AND DISCOUNT ALLOWED SEPARA TELY BEFORE THE AO IN ASSESSMENT PROCEEDINGS WHILE ONLY NET FIGURES OF CO MMISSION INCOME WERE PLACED BEFORE THE AO WHICH WERE REFLECTED IN THE BO OKS OF ACCOUNTS AS NET COMMISSION INCOME EARNED BY THE ASSESSEE WHILE THE FORM NO 26AS REFLECTED THE GROSS COMMISSION INCOME AND HENCE MISMATCH OF R S.1 36 03 915/- BEING DISCOUNT ALLOWED BY THE ASSESSEE OUT OF COMMISSION INCOME. THIS CLAIM OF ITA 7774/MUM/2014 11 DISCOUNT OF RS.1 36 03 915/- WAS NEVER VERIFIED AND EXAMINED BY THE AO DURING THE ASSESSMENT PROCEEDINGS AS ONLY THE NET C OMMISSION INCOME FIGURES WERE THERE BEFORE THE AO AS WERE REFLECTED IN PROFIT AND LOSS ACCOUNT OF THE ASSESSEE AS PER BOOKS OF ACCOUNTS AND THE GROSS COMMISSION INCOME FIGURES WERE THERE BEFORE THE AO DURING ASSESSMENT PROCEEDINGS AS WERE REFLECTED IN AS 26 WHICH DIFFERENCE OF RS.1 36 03 915/- WAS THEREBY ADDED TO THE INCOME OF THE ASSESSEE BY THE AO AS SIMPLICI TOR DIFFERENCE IN THE INCOME AS PER BOOKS OF ACCOUNTS VIS--VIS INCOME AS REFLECTED IN FORM NO AS 26 WITHOUT EXAMINING AND VERIFYING THE CLAIM OF D EDUCTION CLAIMED BY THE ASSESSEE OF DISCOUNT ALLOWED OF RS.1 36 03 915/- OU T OF GROSS COMMISSION INCOME AS THE SAID FACTS OF HAVING ALLOWED DISCOUNT OUT OF GROSS COMMISSION WERE NEVER BEFORE THE AO. THE ASSESSEE RAISED THIS ISSUE IN PROCEEDINGS U/S 154 OF THE ACT FILED ON 12-03-2014 ANTERIOR TO FRAM ING OF IMPUGNED ASSESSMENT ORDER DATED 20-02-2014 U/S 143(3) OF T HE ACT WHICH DISCLOSURE OF DETAILS IN PROCEEDINGS U/S 154 OF THE ACT IS IRR ELEVANT TO THE APPELLATE PROCEEDINGS ARISING FROM THE ASSESSMENT ORDER U/S 1 43(3) OF THE ACT. THE ASSESSEE SUBMITTED REPLIES BEFORE THE LEARNED CIT(A ) IN APPELLATE PROCEEDINGS WHEREBY IT EXPLAINED THE DIFFERENCE BETWEEN THE GRO SS COMMISSION INCOME AND NET COMMISSION INCOME AND THAT BEING DISCOUNT ALLOW ED BY THE ASSESSEE OF RS.136 03 915/- OUT OF GROSS COMMISSION INCOME. IT IS THE SAY OF THE LEARNED DR THAT ADDITIONAL EVIDENCES SUBMITTED BY THE ASSES SEE WERE NEVER FORWARDED BY THE LEARNED CIT(A) TO THE AO WHICH IS IN VIOLATI ON OF RULE 46A OF THE INCOME TAX RULES 1962 AND THE ASSESSEE DID NOT SUBMIT DE TAILS TO RECONCILE THE DIFFERENCE OF RECEIPTS IN BOOKS OF ACCOUNT VIS--VI S WITH RECEIPTS AS REFLECTED IN FORM NO 26AS. WE ARE OF CONSIDERED VIEW THAT THE IN TEREST OF JUSTICE WILL BE BEST SERVED IF THE ISSUE IS SET ASIDE AND RESTORED TO THE FILE OF THE AO FOR DE- NOVO ADJUDICATION OF THE MATTER ON MERITS WITH RESP ECT TO THE ADDITION OF RS.1 74 09 425 MADE BY THE AO ON ACCOUNT OF DIFFERE NCE IN THE RECEIPTS AS REPORTED IN BOOKS OF ACCOUNTS VIS--VIS RECEIPTS AS REPORTED IN FORM NO 26AS INTER-ALIA INCLUDING THE EXAMINATION AND VERIFICAT ION OF THE CLAIM OF DISCOUNT ITA 7774/MUM/2014 12 GIVEN BY THE ASSESSEE OF RS.1 36 03 915/- OUT OF GR OSS COMMISSION INCOME. NEEDLESS TO SAY PROPER AND SUFFICIENT OPPORTUNITY O F BEING HEARD SHALL BE PROVIDED BY THE AO TO THE ASSESSEE IN ACCORDANCE WI TH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW. THE ASSESSEE WILL B E ALLOWED BY THE AO TO PRODUCE ALL NECESSARY AND RELEVANT EVIDENCES AND EX PLANATIONS TO SUPPORT ITS CONTENTIONS . THE ASSESSEE IS DIRECTED TO CO-OPERAT E WITH REVENUE IN SET ASIDE PROCEEDINGS. WE ORDER ACCORDINGLY. 10. IN THE RESULT APPEAL FILED BY THE ASSESSEE IN ITA NO. 7774/MUM/2014 FOR THE ASSESSMENT YEAR 2011-12 IS ALLOWED AS INDIC ATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH OCTOBER 2016. # $% &' 07-10-2016 ( ) SD/- SD/- (C.N. PRASAD) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 07- 10-2016 [ .9../ R.K. R.K. R.K. R.K. EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED MUMBAI 4. : / CIT- CONCERNED MUMBAI 5. =>( 99?@ ?@ $ / DR ITAT MUMBAI E BENCH 6. (BC D / GUARD FILE. / BY ORDER = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) $ / ITAT MUMBAI