M/s. Nutech Polymers Private Ltd., UDAIPUR V. ACIT, UDAIPUR

CO 23/JODH/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9076 (ITAT-JODHPUR)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-11-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-11-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 05-09-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Onus to prove
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.292/JODH/2013 (A.Y. 2006-07) ACIT, CIRCLE-2, VS. M/S. NUTECH POLYMERS UDAIPUR. PVT. LTD. 36, SAKAR,CHARAK MARG, AMBAMATA SCHEME, UDAIPUR. PAN NO. AAACN 4919L (APPELLANT) (RESPONDENT) C.O. NO.23/JODH/2013 (ITA NO.292/JODH/2013) (A.Y. 2006-07) M/S. NUTECH POLYMERS PVT. LTD. VS. ACIT, CIRCLE-2, 36, SAKAR,CHARAK MARG, UDAIPUR. AMBAMATA SCHEME, UDAIPUR. PAN NO. AAACN 4919L (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE. DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 13/11/2013. DATE OF PRONOUNCEMENT : 18/11/2013. O R D E R 2 PER N.K.SAINI, A.M APPEAL OF THE DEPARTMENT AND CROSS OBJECTION OF TH E ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 22/02/2013 OF LD. CIT (A), JODHPUR. NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE NEITHE R ANY ADJOURNMENT WAS SOUGHT. WE, THEREFORE, PROCEEDED EXPARTE QUA THE ASSESSEE AND THE CASE HAS BEEN DECIDED AFTER HEARING THE LEARNED D.R . ON MERIT. THE ONLY GROUND RAISED IN THIS APPEAL OF THE DEPARTMENT READ S AS UNDER:- ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF CO MMISSION EXPENSES AMOUNTING TO RS. 11,60,864/- MADE BY THE AO WITHOUT APPRECIATING THE FACT THAT IN THIS CASE THE ASSESSEE HAS FAILED TO PROVE THE VERACITY OF EXPENSES CLAIMED BY HIM WHEREAS THE BURDEN OF PROOF IS ON TH E ASSESSEE. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, D ELETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN MANUFACTURING OF HEPE/PP WOVEN S ACKS AND TRADING OF TEXTILE AUXILIARIES. THE ASSESSEE FILED ITS RETU RN OF INCOME ON 01/12/2006 DECLARING LOSS OF RS. 29,71,581/-. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAD DEBITED NET COMMISSION OF RS. 24,62,387/- UNDER THE HEAD SALES AND OTHER COMMISSION. IN ORDER TO VERIFY THE GENUINENES S OF CLAIM, THE ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS OF SAL E AND OTHER COMMISSION. 3 THE ASSESSEE FURNISHED THE DETAILS AS REQUIRED. FR OM THE SAID DETAILS, THE ASSESSING OFFICER NOTICED THAT THE COMMISSION PAID TO THE FOLLOWING PARTIES WAS WITH OUT AGREEMENT:- S.NO. NAME OF THE COMMISSION AGENT ADDRESS AMOUNT DEBITED AS COMMISSION 1 PRANAV MINERALS & CHEMICALS PROP. H.S. NENAWATI HUF N-142, BHUPALPURA, UDAIPUR 794471 2 DIYA ENTERPRISES 281, HIRAN MAGRI, SECTOR-3, UDAIPUR 117413 3 BALAJI SPARE PARTS (INDIA) 108, MM COMPLEX, UDAIPUR 77011 4 RAKESH MAHESHWARAI 63, SUBHASH MARG, UDAIPUR 48929 5 RACHNA MARBLE 56, NEW FATEHPURA, UDAIPUR 78738 PRATUSH ENTERPRISES, UDAIPUR 281, H.M. SECTOR-3, UDAIPUR 108537 6 ABHINAV MARKETING PROP. SARLA JAIN 52, GADIYA DEVARA, INSITE CHANDPOLE, UDAIPUR 51300 7 AARTI ENTERPRISES PROP. AARTI KARANPURIA 36, CHARAK MARG, AMBAMATA SCHEME, UDAIPUR 205320 8 SMT. PREETI TOSHNIWAL 63, SUBHASH MARG, UDAIPUR 54512 9 MOZI CHEMICALS PVT. LTD. DIRECTOR SAVITA NENAWATI N-60, BHUPALPURA, UDAIPUR 90109 10. GAJENDRA KUMAR GOVADIA 14, UPHADYA STADIUM, SAGWARA, DUNGARPUR 57121 11. KANCHAN ENTERPRISES 115, M.M. COMPLEX, NEAR MEWAR MOTORS, UDAIPUR 73394 12 DHAN SHREE TRADERS COMBINE PROP. P.S. NENAWATI HUF N-142, BHUPALPURA, UDAIPUR 119009 TOTAL 1160864 4 3. THE ASSESSING OFFICER ISSUED SUMMONS TO 06 COMMISS ION AGENTS, BUT NOBODY RESPONDED. HE, THEREFORE, DISALLOWED THE AF ORESAID COMMISSION BY STATING THAT SIMILAR DISALLOWANCE WAS MADE TO TH E SAME PARTIES DURING THE ASSESSMENT YEAR 2004-05. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND SUBMITTED THAT THE ASSESSING OFFICER HIM SELF ALLOWED THE COMMISSION FOR THE A.Y. 2004-05 IN HIS ORDER UNDER SECTION 143(3) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS ACT, F OR SHORT) DATED 31/12/2009 AFTER RECORDING THE STATEMENTS OF THE PE RSONS ON OATH AS DIRECTED BY THE ITAT VIDE ITS ORDER DATED 30/09/200 8 IN APPEAL NO. I.T.A. NO. 549/JU/2007. IT WAS FURTHER STATED THAT WHEN T HE ASSESSING OFFICER HAD TAKEN THE STATEMENTS OF THE FOLLOWING PERSONS, THEN IT WAS CLEAR THAT THOSE PARTY EXISTED AND COMMISSION PAID TO THEM WAS NOT BOGUS:- 1. SMT. SAVITA NENAVATI DIRECTOR OF MOZI CHEMICALS PVT. LTD. 2. SHRI P.S. NENAWATI KARTA OF P.S. NENAWATI HUF PR OP. OF DHANSHREE TRADERS COMBINE. 3. SHRI H.S. NENAWATI KARTA OF H.S. NENAWATI HUF PR OP. OF PRANAV MINERAL & CHEMICALS. 4. SMT. AARTI KARANPURIA PROP. OF AARTI ENTERPRISES . 5. SMT. SARLA JAIN PROP. OF ABHINAV MARKETING. THE ASSESSEE FILED THE FOLLOWING DOCUMENTS:- PAN OF THE COMMISSION AGENT. NAME OF THE PERSON IN BUYING COMPANY WITH WHOM SALE /ORDER/TRANSACTION COMPLETED. 5 NAME & ADDRESS OF THE BUYING COMPANY. NATURE OF SERVICE RENDERED (DETAILS OF GOODS) DETAIL SHOWING BILL NO. AND AMOUNT FOR WHICH COMMIS SION HAS BEEN DEBITED. RATE OF COMMISSION. COMMISSION AMOUNT. COPY OF BALANCE SHEET. COPY OF PROFIT AND LOSS ACCOUNT. COPY OF COMPUTATION OF TOTAL INCOME; AND COPY OF INCOME-TAX RETURN. 5. IT WAS FURTHER STATED THAT ALMOST ALL THE PARTIES HAD SHOWN THE COMMISSION IN THEIR INCOME, THEREFORE, BY DISALLOWI NG THE SAME AND DECLARING IT TO BE BOGUS WOULD LEAD TO DOUBLE TAXAT ION. 6. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSING OFFICER HAD HELD THE CO MMISSION PAID TO THE VARIOUS PARTIES AS BOGUS MAINLY ON THE GROUND THAT SIMILAR DISALLOWANCE WAS MADE IN THE A.Y. 2004-05. HE FURTHER OBSERVED T HAT THE ASSESSING OFFICER HAD NOT DISPUTED THIS FACT THAT THE ASSESSE E HAD SUBMITTED COMPLETE DETAILS OF COMMISSION AGENTS LIKE DEBIT AN D CREDIT NOTES, COMPUTATION OF INCOME, PROFIT & LOSS ACCOUNT, PAN, COPY OF TDS RETURNS AND TDS CERTIFICATES, COPY OF BANK STATEMENTS, COPY OF LEDGER ACCOUNTS ETC. AND THE ASSESSING OFFICER HAD NOT CONTROVERTED THOSE EVIDENCES. LEARNED CIT(A) ALSO OBSERVED THAT THE ADDITION MADE ON ACCOUNT OF BOGUS COMMISSION WAS DELETED BY HIS PREDECESSOR VIDE APPE LLATE ORDER DATED 6 30/04/2007 FOR THE A.Y. 2004-05. HE, ACCORDINGLY, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. NOW THE DEPARTMENT IS IN APPEAL. 7. LEARNED D.R. REITERATED THE OBSERVATIONS MADE BY T HE ASSESSING OFFICER AND STRONGLY SUPPORTED THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER. 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED CIT D.R. AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IT IS AN ADMITTED FACT THAT THE ASSESSING OFFICER DISALLOWED THE COMM ISSION ONLY ON THE BASIS THAT SIMILAR DISALLOWANCE WAS MADE FOR THE A. Y. 2004-05, HOWEVER, HE HAD NOT APPRECIATED THIS FACT THAT THE SAID DISA LLOWANCE MADE BY HIS PREDECESSOR WAS DELETED BY THE LEARNED CIT(A) VIDE ORDER DATED 30/04/2007 AND FURTHER WHEN THE MATTER WAS SET ASID E TO THE ASSESSING OFFICER BY THE ITAT VIDE ITS ORDER DATED 30/09/2008 , THE ASSESSING OFFICER HIMSELF ALLOWED THE COMMISSION TO THE 05 PARTIES WH ILE PASSING THE ASSESSMENT ORDER UNDER SECTION 143(3)/250/254 OF TH E ACT DATED 30/12/2009 AFTER TAKING THE STATEMENTS OF THE PERSO NS ON OATH UNDER SECTION 131 OF THE ACT AND IN RESPECT OF OTHER PART IES THE ASSESSEE FURNISHED ALL THE REQUISITE DETAILS WHICH HAD NOT B EEN CONTROVERTED BY THE ASSESSING OFFICER. WE, THEREFORE, ARE OF THE VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER WAS NOT JUSTIFIED AND THE LEARNED CIT(A) RIGHTLY 7 DELETED THE SAME. IN THAT VIEW OF THE MATTER, WE D O NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 9. AS REGARDS TO THE CROSS-OBJECTION OF THE ASSESSEE, IT IS NOTICED THAT NO SPECIFIC RELIEF HAS BEEN SOUGHT AND THE ASSESSE E MERELY SUPPORTED THE ORDER OF THE LEARNED CIT(A), WHICH WE HAVE UPHELD W HILE DECIDING THE APPEAL OF THE DEPARTMENT, THEREFORE, THE CROSS-OBJE CTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS. 10. IN THE RESULT, APPEAL OF THE DEPARTMENT AND THE CRO SS-OBJECTION OF THE ASSESSEE ARE DISMISSED. (ORDER PRONOUNCED IN THE COURT ON 18 TH NOVEMBER, 2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 TH NOVEMBER , 2013. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.