RATNAKAR DANI(HUF), Nagpur V. I.T.O. Ward 1(4), Nagpur

ITA 108/NAG/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2150 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE

Judgement Text

1 ITA NO. 108/NAG/2015 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 108/NAG/2015. ASSESSMENT YEAR : 2009 - 10. RATNAKAR DANI, HUF, THE INCOME - TAX OFFICER, NAGPUR. VS. WARD - 1(4), NAGPUR. PAN AAKHR9415C. APPELLANT. RESPONDENT. APPELLANT BY : NONE. . RESPONDENT BY : SHRI A.R. NINAWE. DATE OF HEARING : 19 - 07 - 2016 DATE OF PRONOUNCEMENT : 19 TH JULY, 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - I, NAGPUR DATED 16 - 01 - 2015 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10. 2. THE ISSUE RAISED IS THAT THE DISALLOWANCE OF RS.9,15,193/ - ON ACCOUNT OF COMMISSION AND BROKERAGE IS N OT JUSTIFIED. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SUB BROKING IN RESPECT OF SECURITIES SUCH AS UNITS OF MUTUAL FUND ETC. THE MAJOR SOURCE OF INCOME OF THE APPELLANT IS REFERRAL COMMISSION OF RS.13,95,000/ - RECEIVED FROM M/S THINK FINANCE AND INSURANCE CONSULTANTS PVT. LTD. THE MAJOR EXPENDITURE INCURRED BY THE APPELLANT IS THE BROKERAGE AND COMMISSION OF RS.11,47,690/ - . THE AO FOUND THAT AS AGAINST T HE COMMISSION INCOME OF RS.13,95,000/ - THE APPELLANT HAS CLAIMED COMMISSION EXPENSES OF RS.11,47,690/ - . THE AO FURTHER ASKED THE ASSESSEE TO SUBMIT THE DETAILS OF THE 2 ITA NO. 108/NAG/2015 PERSONS TO WHOM COMMISSION WAS PAID. THE SAME WAS DULY SUPPLIED. THE AO OBSERVED SOME DIF FERENCE IN THE RATE OF COMMISSION GIVEN. HE ASKED EXPLANATION FOR THE VARIATIONS. IN ABSENCE OF ANY EXPLANATION IN THIS REGARD THE AO ALLOWED THE MINIMUM BROKERAGE AND DISALLOWED THE EXCESSIVE BROKERAGE WHICH RESULTED INTO AN ADDITION OF RS.9,15,193/ - . UP ON ASSESSEES APPEAL, LEARNED CIT(APPEALS) CONFIRMED THE ADDITION. 4 . AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE THE ITAT. 5 . I HAVE HEARD THE LEARNED D.R. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, UPON CAREFUL CONSIDERATION I FIND THAT THE ISSUE CAN BE ADJUDICATED BY HEARING THE LEARNED D.R. AND PERUSING THE RECORDS. 6 . THE ONLY ISSUE IN THIS CASE IS COMPUTATION OF EXCESS COMMISSION. I N THE OPINION OF THE AO IT SHOULD BE AT THE MINIMUM RATE GIVEN TO ONE PERSON I.E. .0044% . IT IS NOT T HE CASE OF THE REVENUE THAT THE PERSONS TO WHOM COMMISSIONS WERE GIVEN ARE BOGUS OR THAT THE TRANSACTIONS WITH THEM ARE BOGUS. IT IS SETTLED LAW FROM T HE HONBLE APEX COURT THAT THE REVENUE SHOULD NOT SIT INTO THE SHOES OF THE BUSINESS MAN . IN THIS CASE THE REVENUE HAS SOUGHT TO DO PRECISELY THE SAME. HENCE THE AOS SURMISE THAT THE COMMISSION PAID BY THE ASSESSEE SHOULD BE ONLY .0044% IS NOT SUSTAINABLE DEHORSE ANY FINDING THAT THE COMMISSION PAID WAS BOGUS OR THAT NO FUNCTIONS WERE PERFORMED BY THE COMMIS SION AGENTS. HENCE I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION IN THIS REGARD. 7 . IN THE RESULT, THIS APPEAL BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF JULY,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 19 TH JULY, 2016. 3 ITA NO. 108/NAG/2015 COPY FORWARDED TO : 1. RATNAKAR DANI, PLOT NO. 61, CENTRAL EXCISE COLONY, KHAMLA, NAGPUR - 440025. 2. I.T.O., WARD - 1(4), NAGPUR. 3. C.I.T. - I, NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGIS TRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.