M/s. VTR Marketing, Kolkata V. ACIT, Circle - 39, Kolkata, Kolkata

ITA 1005/KOL/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8079 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 14-05-2010
• Court: TRIBUNAL
• Assessee Lawyers: M TIWARY
• Keywords: Assessment record
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , ! /AND ' #!' , ) [BEFORE SHRI PRAMOD KUMAR, AM & SHRI MAHAVIR SINGH, JM] !$ !$ !$ !$ / I.T.A NO. 1005/KOL/2010 #%& '( #%& '( #%& '( #%& '(/ // / ASSESSMENT YEAR: 2003-04 M/S. V. T. R. MARKETING VS. ASSISTANT COMMISSIO NER OF INCOME-TAX, (PAN: AADFV7514M) CIRCLE-39, KOLKATA. (*+ /APPELLANT ) (,*+/ RESPONDENT ) DATE OF HEARING: 17.10.2012 DATE OF PRONOUNCEMENT: 19.10.2012 FOR THE APPELLANT: SHRI M. TIWARY FOR THE RESPONDENT: SHRI A. K. SINGH - / ORDER PER MAHAVIR SINGH, JM ( ' #!' ' #!' ' #!' ' #!', , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF REVISION ORDER PASSED U/S. 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) BY CIT-XIII, KOLKATA IN M. NO. CIT- XIII/263/2/09-10/5160-62 DATED 18.03.2010. ASSESSME NT WAS FRAMED BY ACIT, CIRCLE-39, KOLKATA U/S.143(3)/147 OF THE ACT FOR ASSESSMENT YE AR 2003-04 VIDE HIS ORDER DATED 31.12.2007. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE REVISION ORDER OF CIT-XIII, KOLKATA ON THE BASIS THAT THE AO FAILED TO VERIFY T HE GENUINENESS OF TRANSACTION QUA THE SERVICES RENDERED BY KASTURILAL HARLAL LTD. (IN SHORT KHL). FOR THIS, ASSESSEE HAS RAISED FOLLOWING FOUR GROUNDS: 1. THAT THE OBSERVATIONS OF LD. CIT, KOLKATA-XIII THAT THE ASSESSING OFFICER HAS FAILED TO VERIFY THE GENUINENESS OF TRANSACTION WIT H M/S. KASTURILAL HARLAL LTD. ARE WRONG AND CONTRARY TO FACTS ON RECORD. 2. THAT THE OBSERVATIONS OF LD. CIT, KOLKATA-XIII T HAT THE ASSESSING OFFICER HAS FAILED TO VERIFY THE NATURE OF SERVICES RENDERED BY M/S. K ASTURILAL HARLAL LTD. ARE CONTRARY TO FACTS ON RECORD. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT, KOLKATA-XIII IS WRONG AND UNJUSTIFIED IN HOLDING THAT THE ASSESSING OFFICER HAS FAILED TO EXAMINE THE TERMS AND CONDITIONS REGARDING COMMISSION PAYMENT T O M/S. KASTURILAL HARIAL LTD. 2 ITA 1005/K/2010 VTR MARKETING A.Y.03-04 4. THAT ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT, KOLKATA-XIII IS WRONG AND UNJUSTIFIED IN SETTING ASIDE THE ORDER U/ S 143(3)/147 DATED 31.12.2007 FOR FRESH ADJUDICATION. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE CIT WHILE REVISING THE ASSESSMENT U/S. 263 OF THE ACT NOTED FROM THE ASSESSMENT RECORDS THAT ASSESSMENT WAS REOPENED BY AO TO EXAMINE AND VERIFY GENUINENESS OF TRANSACTIONS REGARDING COMMISSION PAYMENT. ACCORDI NG TO CIT, THE AO DID NOT EXAMINE THE DETAILS OF COMMISSION PAYMENT VIS. A VIS. SERVICES RENDERED BY THE PARTY. FACTS OF THE CASE ARE THAT THE AO ALLOWED THE CLAIM OF THE ASSESSEE OF CO MMISSION PAYMENT OF RS.23,84,390/- PAID TO KHL. THE CIT WAS OF THE VIEW THAT HE ALLOWED COMMI SSION WITHOUT ANY ENQUIRY/VERIFICATION OR EXAMINATION. THE CIT RECORDED HIS FINDING AS UNDER : 3. THE SUBMISSIONS THUS MADE BY THE ASSESSEE HAVE BEEN CAREFULLY CONSIDERED. IT IS NOT DENIED BY THE ASSESSEE THAT A SIMILAR ADDITION RELA TING TO COMMISSION PAYMENT MADE TO M/S. IGNITE STEEL PVT. LTD., JAMSHEDPUR WAS DISALLO WED AND ADDED BACK ON THE GROUND THAT THE DETAILS FURNISHED REGARDING THE ROLE AND F UNCTION, THE NATURE OF SERVICES RENDERED ETC. WERE VAGUE AND CONFUSING. FURTHER, THE ASSESSE E ALSO FAILED TO FURNISH THE COMPLETE INFORMATION IN RESPECT OF THE COMMISSION AGENT. HOW EVER, WHILE COMPLETING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04 U/S. 143 (3) R.W.S. 147 THE A.O. MADE ONLY A BRIEF MENTION REGARDING THE COMMISSION OF RS. 23,84 ,390/- PAID TO M/S. KASTURILAL HARILAL LTD., KOLKATA AS UNDER :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, INSPEC TOR OF INCOME-TAX, ATTACHED WITH THIS CIRCLE, WAS DEPUTED TO VERIFY THE PAYMENT OF COMMIS SION BY THE FIRM TO ABOVE NAMED PARTY. INSPECTORS REPORT IS PLACED ON RECORD. IT I S ALSO FOUND THAT THE LIMITED COMPANY RECEIVING THE COMMISSION HAS DISCLOSED THE INCOME I N ITS I. T. RETURN FILED ON 01. 12.2003 BEFORE JCIT, RANGE-8, KOLKATA. WHILE MAKING THE PAY MENT OF COMMISSION M/S. VTR MARKETING HAS DULY DEDUCTED TAX AT SOURCE. THUS THE A.O. FAILED TO VERIFY THE GENUINENESS OF T HE TRANSACTION AND ALSO THE ACTUAL NATURE OF SERVICES RENDERED BY M/S. KASTURILAL HARI LAL LTD. IN ENSURING SMOOTH SUPPLY OF BEER AND WINES, MORE SO. CONSIDERING THE FACT THAT M/S. KASTURILAL HARILAL LTD., WAS DEALING IN COAL AND IS A LOSS MAKING CONCERN. THERE FORE, IT IS CLEAR THAT THE A.O. HAS NOT EXAMINED THE ASPECT OF COMMISSION PAYMENT AND DID N OT OBTAIN THE COMPLETE DETAILS SUCH AS THE TERMS AND CONDITIONS, THE AGREEMENT FOR PAYM ENT OF COMMISSION AND NECESSITY FOR PAYMENT OF COMMISSION FOR THE GOODS PURCHASED FROM M/S. N. C. SHAW & CO., WHO WAS AN OLD SUPPLIER OF THE ASSESSEE. 4. IN VIEW OF THE ABOVE DISCUSSION THE ORDER U/S. 1 43(3) R.W.S. 147 DATED 31/12/2007 PASSED BY THE ACIT, CIRCLE-39, KOLKATA IS SET ASIDE WITH A DIRECTION TO EXAMINE AFRESH THE ISSUE OF PAYMENT OF COMMISSION TO M/S. KASTURILAL H ARILAL LTD., AND THE ACTUAL SERVICES RENDERED BY M/S. KASTURLAL HARILAL LTD., TO CONSID ER THE ALLOWABILITY OR OTHERWISE OF SUCH COMMISSION PAYMENT AS PER THE PROVISIONS OF INCOME TAX ACT. 1961. . WE FIND THAT THE ASSESSEE COULD NOT SHOW US THAT KH L HAS RENDERED ANY SERVICE FOR WHICH PAYMENT OF COMMISSION WAS MADE. AS THE ASSESSEE CO ULD NOT PROVE THE SERVICES RENDERED OR COULD NOT FILE DETAILS AND AO FAILED TO MAKE ANY EN QUIRY, REVISION MADE BY CIT U/S. 263 OF THE ACT IS PERMISSIBLE. THERE IS NO WHISPER ABOUT ANY ENQUIRY QUA THE SERVICES RENDERED MAKES THE 3 ITA 1005/K/2010 VTR MARKETING A.Y.03-04 ASSESSMENT ORDER ERRONEOUS AND THEREBY PREJUDICIAL TO THE INTEREST OF REVENUE. ONCE ASSESSMENT IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE, REVISION HAS TO BE UPHELD. ACCORDINGLY, WE UPHOLD THE REVISION ORDER PASSED BY CIT. MOREOVER, CIT-XIII, KOLKATA HAS ONLY DIRECTED THE AO TO EXAMINE AFRESH THE ISSUE OF PAYMENT OF COMMISSION TO KHL WHETHER ACTUAL SERVICES WERE RENDERED BY THAT PARTY OR NOT. THERE IS NO HARM IN VERIFYING THE FACT WHETHER SERVICES WERE RENDERED BY KHL OR NOT. APPE AL OF ASSESSEE IS DISMISSED. 4. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISS ED. 5. ORDER PRONOUNCED IN OPEN COURT ON 19 TH OCT., 2012. SD/- SD/- , ' #!' ' #!' ' #!' ' #!' , (PRAMOD KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( . . . .) )) ) DATED : 19TH OCTOBER, 2012 /0 #%12 #3 JD.(SR.P.S.) 4 ITA 1005/K/2010 VTR MARKETING A.Y.03-04 - 4 ##5 65'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT M/S. V. T. R. MARKETING, 29A, WESTON ST REET, KOLKATA-700 016 2 ,*+ / RESPONDENT ACIT, CIR-39, KOLKATA 3 . #-% ( )/ THE CIT(A), KOLKATA 4. #-% / CIT, KOLKATA 5 . >#? #% / DR, KOLKATA BENCHES, KOLKATA ,5 #/ TRUE COPY, -%/ BY ORDER, ' !2 /ASSTT. REGISTRAR .