Andritz Hydro Pvt. Ltd. V. Commissioner of Income Tax

ITA/265/2010

AI Insights

The case involves M/s Andritz Hydro Pvt. Ltd., the appellant, contesting an order by the Income Tax Appellate Tribunal, which remanded the issue of commission expenses back to the Assessing Officer. The Tribunal's decision followed the assessee's appeal against the disallowance of commission expenses claimed for the assessment year 2003-04, which the Assessing Officer had initially disallowed due to insufficient evidence of services rendered by commission agents. The Commissioner of Income Tax (Appeals) had accepted additional evidence from the assessee, which the Tribunal later remanded for further examination due to the voluminous nature of the documents and the need for a thorough review. The High Court's dismissal of the appeal was based on the absence of substantial questions of law arising from the Tribunal's order.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 796787 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 30-07-2010
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: ASHWANI TANEJA; JYOTI
• Keywords: Additional evidence; Assessment; Commission expenses; Income tax appellate tribunal; Remand
• Section: 251; 260A

Judgement Text

"ITA No. 265 of 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 265 of 2010 Date of Decision: 30.7.2010 M/s Andritz Hydro Pvt. Ltd. ....Appellant. Versus Commissioner of Income Tax ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Ashwani Taneja, Advocate and Ms. Jyoti, Advocate for the appellant. ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 20.11.2009 passed by the Income Tax Appellate Tribunal, Bench 'I', New Delhi (hereinafter referred to as “the Tribunal”) in ITA No. 316/Del/2009 for the assessment year 2003-04, proposing to raise the following substantial questions of law:- (a) Whether Tribunal erred in law in restoring the issue of commission to Ld. CIT (A) by recording incorrect finding that additional evidences were not confronted to Ld. A.O.? (b) Whether the order of Tribunal is perverse in as much as it ignores the findings recorded by Ld. ITA No. 265 of 2010 -2- CIT (A) that additional evidences were confronted to Ld. A.O.? (c) Whether Tribunal erred in law in holding that additional evidences were not confronted to Ld. A.O., or Ld. CIT (A) admitted additional evidences in violation of rule 46A when there was no such ground of appeal nor any such argument was advanced by Ld. DR? (d) Whether Tribunal decided the issue without giving opportunity of being heard?” 2. The assessee is engaged in manufacture and sale of turbine and other equipments. In the course of assessment, it claimed deduction of Rs.6,45,53,688/- towards commission expenses. The Assessing Officer disallowed the same as he was not satisfied about the services allegedly rendered by the commission agents. The assessee failed to furnish documentary evidence in support of its case. On appeal, the Commissioner of Income Tax (Appeals) [in short “CIT (A)”] considered additional evidence led by the assessee and held that the assessee was able to establish the expenditure incurred as well as its expediency for its business. On further appeal to the Tribunal by the revenue, it was noticed that the CIT (A) was dealing with several issues and on some of the issues the matter was remanded while on this issue there was no remand and the documents being voluminous which were produced for the first time before the CIT (A), the remand would have been a better course. Accordingly, the matter was directed to be remanded to the Assessing Officer to examine the additional evidence ITA No. 265 of 2010 -3- relied upon by the assessee after giving due opportunity to it. 3. We have heard learned counsel for the assessee. 4. Learned counsel for the appellant submits that observation of the Tribunal that there was remand in respect of some issues and no remand on the issue in question is erroneous as the CIT (A) had obtained the remand report and took decision after considering the said report. He also submits that the CIT (A) has no power to remand after amendment to Section 251 by Finance Act, 2001. 5. We are unable to accept the submission. Even if it is assumed that if remand report was considered by the CIT (A), it cannot be held that any substantial question of law arises from the order of the Tribunal. 6. The matter has only been remanded to the Assessing Officer and the assessee will get full opportunity to put forward its points. 7. As regards the submission that there was no power of remand neither any question has been proposed in the memo of appeal nor such a plea can be sustained under Section 251 of the Act. The power of CIT (A) is to confirm, reduce, enhance or annul the assessment. Under clause (c), the said authority can pass such orders as it thinks fit. The words “or he may set aside and refer the case back for fresh assessment” were deleted. We might have considered this submission but for the fact that it is not the order of the CIT (A) under which the matter has been remanded but by the Tribunal and it is not the case of the appellant that the Tribunal does not have any power to remand the matter to the Assessing Officer. ITA No. 265 of 2010 -4- 8. No substantial question of law arises in the appeal. 9. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE July 30, 2010 (AJAY KUMAR MITTAL) gbs JUDGE "