Shri Sandip K. Patel, Ahmedabad V. The Dy.CIT, Circle-7, Ahmedabad

CO 79/AHD/2014

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2680 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 12-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Section: 143(3); 11

Judgement Text

I.T.A. N O. 2 970 & 2944 /AHD/201 3 C.O. NO.79/AHD/2014 ASSESSMENT Y EAR S : 2010 - 11 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR , AM AND MAHAVIR PRASAD , JM ] I.T.A. NO. 2970 /AHD/201 3 ASSESSMENT Y EAR : 20 10 - 11 S ANDIP K. PATEL ....... ... .. APPELLANT PROP. MEET M ARKETING, F - 102, BALESHWER SQUARE, OPP. ISCON TEMPLE, S.G. HIGHWAY, AHMEDABAD 380 015 . [P AN: ABNPP 1812 F ] VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 7, AHMEDABAD. . . . RESPONDENT I.T.A. NO. 2944/AHD/ 2013 ASSESSMENT Y EAR : 2010 - 11 DY. COMMISSIONER OF INCOME TAX, CIRCLE - 7, AHMEDABAD. . . . APPELLANT VS. S ANDIP K. PATEL ....... ... .. RESPONDENT PROP . MEET MARKETING, F - 102, BALESHWER SQUARE, OPP. ISCON TEMPLE, S.G. HIGHWAY, AHMEDABAD 380 015 . [P AN: ABNPP 1812 F ] C.O. NO.79/AHD/2014 (IN I.T.A. NO. 2944/AHD/2013) ASSESSMENT Y EAR : 2010 - 11 S ANDIP K. PATEL ....... ... .. APPELLANT PROP. MEET MARKETING, F - 102, BALESHWER SQUARE, OPP. ISCON TEMPLE, S.G. HIGHWAY, AHMEDABAD 380 015 . [P AN: ABNPP 1812 F ] I.T.A. N O. 2 970 & 2944 /AHD/201 3 C.O. NO.79/AHD/2014 ASSESSMENT Y EAR S : 2010 - 11 PAGE 2 OF 4 VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 7, AHMEDABAD. . . . RESPONDENT APPEARANCES BY: S.N. DIVATIA FOR THE ASSESSEE K. MADHUSUDAN FOR THE REVENUE DATE OF CONCLUDING THE HEARING : 3 0. 01.2017 DATE OF PRONOUNC ING THE ORDER : 31 .01.2017 O R D E R PER PRAMOD KUMAR , AM : TH ESE CROSS APPEALS ARE D IRECTED AGAINST THE ORDE R DATED 13 TH SEPTEMBER, 2013, PASSED BY THE LD. CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME - TAX ACT, 1961 FOR THE ASSESSMENT YEAR 20 10 - 11 . ASSESSEE HAS ALSO FILED A CROSS OBJECTION. 2. GRIEVANCE S RAISED BY THE ASSESSEE ARE AS UN DER : - 1.1 THE ORDER PASSED U/S.250 ON 13 - 9 - 2013 FOR A.Y.2010 - 11 BY CIT(A) - XVI, ABAD UPHOLDING THE DISALLOWANCE OF COMMISSION EXPENSES U/S 40A(2)(B) TO THE EXTENT OF RS.4.40 LACS IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUS TICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGNED DISALLOWANCE. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THAT THE PROVISIONS OF SEC 40A(2)(B) WERE APPLICABLE TO THE COMMISSION PAYMENT OF RS.48,29,302 TO SHRI AMIT PATEL. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THAT THE PROVISIONS OF SEC 40A(2)(B) WERE APPLICABLE TO THE COMMISSION PAYMENT OF RS.48,29,302 TO SHRI AMIT PATEL. 3.1 THE LD.CIT(A) HAS ERRED IN UPHOLDING THAT THE COMMISSION PAID TO SHRI AMIT PATEL WAS EXCESSIVE OR UNREASONABLE AND THEREBY C ONFIRMING THE I.T.A. N O. 2 970 & 2944 /AHD/201 3 C.O. NO.79/AHD/2014 ASSESSMENT Y EAR S : 2010 - 11 PAGE 3 OF 4 DISALLOWANCE TO THE EXTENT OF RS.4.40 LACS OUT OF THE DISALLOWANCE OF RS.36,29,802 MADE BY AO. 3.2 THE LD CIT(A) HAS ERRED IN HOLDING THAT THE HON'BLE TRIBUNAL HAD IN PAST CONFIRMED THE PAYMENT OF 12% AS EXCESSIVE. CONSIDERING THE FACTS OF THE CASE SUCH AS VOLUME AND NATURE OF BUSINESS AS WELL AS OTHER FACTORS THE AD HOC DISALLOWANCE MADE IN THE PAST SHOULD NOT BE TAKEN AS THE YARDSTICK FOR THE SUCCEEDING YEARS. IT IS, THEREFORE, PRAYED THAT THE DISALLOWANCE OF RS.4.40 LACS UPHELD BY TH E CIT(A) MAY KINDLY BE DELETED. 3 . GRIEVANCE S RAISED BY THE ASSESSING OFFICER ARE AS UNDER : - I) THE LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.4,40,0007 - OUT OF RS.36,29,302/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE U/S.40(2)(B)OF THE ACT, OUT OF COMMISSION PAYMENT TO SHRI AMIT K. PATEL, BROTHER OF THE ASSESSEE. II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE UPHE LD THE ORDER OF THE ASSESSING OFFICER . III) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) MAY BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4 . GRIEVANCE S RAISED BY THE ASSESSEE IN HIS CROSS OBJECTI ON ARE AS UNDER : - 1. THE LD. CIT(A) HAS ERRED IN LAW AND OR ON FACTS IN UPHOLDING THE DISALLOWANCE U/S. 40A(2)(B) TO THE EXTENT OF RS.4,40,000/ - 2. T HAT IN THE FACTS AND CIRCUMSTANCE OF THE CASE AS WELL A S IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE UPHE LD THE DISALLOWANCE U/S. 40A(2)(B) TO THE EXTENT OF RS.4,40,000/ - . 5 . LD. REPRESENTATIVES FAIRLY AGREE THAT THE ISSUE IN THESE APPEALS IS PARTLY COVERED IN FAVOUR OF THE REVENUE AS THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASS ESSMENT YEAR S 2008 - 09 AND 2009 - 10 HAD PARTLY ALLOWED THE APPEALS FILED BY THE REVENUE AND AGGRIEVED BY THE SAME, UPON FURTHER REFERRING THE MATTER TO THE HON BLE HIGH C OURT OF GUJARAT , THE HON BLE GUJ A RAT HIGH C OURT HAS DISMISSED THE TAX A PPEAL FIL E D BY T H E ASSESSEE. COPIES I.T.A. N O. 2 970 & 2944 /AHD/201 3 C.O. NO.79/AHD/2014 ASSESSMENT Y EAR S : 2010 - 11 PAGE 4 OF 4 OF THE RELEVANT DECISION OF THE TRIBUNAL AND THE JUDGEMENT OF THE HON BLE GUJARAT HIGH COURT ARE FILED ON RECORD. THE LEARNED CIT(A) HAS MERELY FOLLOWED THESE BINDING JUDICIAL PRECEDENTS AND ACCORDINGLY RESTRICTED THE DISALLOWANCE TO RS .4,40,000/ - . WE SEE NO INFIRMITY IN THIS ACTION OF THE LEARNED CIT(A). 6 . IN VIEW OF THE ABOVE, AND RESPECTFULLY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH OF THIS T RIBUNAL AND THE ESTEEMED VIEWS OF THEIR LORDSHIPS , WE DISMISS THE APPEAL S FILED BY THE ASSESSEE AND THE REVENUE. THE ACTION OF THE LEARNED CIT(A) IS CONFIRMED. 7 . CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMISSED. 8 . IN THE RESULT, BOTH THE APPEALS AND THE CROSS OBJECTION ARE DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON 31 ST DAY OF JANUARY, 2017 . SD/ - SD/ - MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 31 ST DAY OF JANUARY, 2017. COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSI ONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD