Deba Prasad Mukherjee, Sonepat V. JCIT, Sonepat

ITA 1103/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5157 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANSHUL PRAKASH
• Assessee Lawyers: V RAJA KUMAR S
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.1103/DEL/2013 ASSESSMENT YEAR : 2009-10 DEBA PRASAD MUKHERJEE, C/O VIMLESH INDUSTRIES PVT. LTD., DELHI ROAD, SONEPAT. PAN: AENPM4281L VS. JCIT, SONEPAT RANGE, SONEPAT. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH & SHRI V. RAJA KUMAR, ADVOCATES DEPARTMENT BY : SHRI ANSHUL PRAKASH, SR. DR DATE OF HEARING : 17.08.2017 DATE OF PRONOUNCEMENT : 18.08.2017 ORDER PER R.S. SYAL, VP: THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF TH E ORDER PASSED BY THE CIT(A) ON 18.12.2012 IN RELATION TO THE ASSESSM ENT YEAR 2009-10. ITA NO.1103/DEL/2013 2 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF COMMISSION PAID BY THE ASSESSEE AMO UNTING TO RS.12,49,344/-. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE, AN EMPLOYEE IN M/S VIMLESH INDUSTRIES PVT. LTD., SONEP AT, FILED HIS RETURN DECLARING TOTAL INCOME OF RS.18,01,480. COMMISSIO N OF RS.32,48,606/- RECEIVED FROM SHANGHAI DERUI MACHINERY MANUFACTURIN G CO. LTD., 338, YUELUO ROAD, SHANGHAI WAS SHOWN AS GROSS INCOME. S UCH AMOUNT WAS RECEIVED ON MAKING SALE OF SIX DRAWING MACHINES DUR ING THE YEAR. THE ASSESSEE PAID COMMISSION @ 40% OF THE GROSS COMMISS ION RECEIVED TO FOUR PARTIES WHO ASSISTED THE ASSESSEE IN PROCURING THE ORDERS. IN ORDER TO VERIFY THE GENUINENESS OF THE COMMISSION PAYMENT , THE ASSESSING OFFICER ISSUED NOTICES U/S 133(6) TO ALL THE FOUR P ERSONS WHO ADMITTED TO HAVE RECEIVED COMMISSION @ 40% FROM THE ASSESSEE. THE ASSESSING OFFICER MADE DISALLOWANCE OF TOTAL COMMISSION AT RS .12.49 LAC ON THE GROUND THAT THE ASSESSEE FAILED TO GIVE ANY CORRESP ONDENCE BETWEEN THE ITA NO.1103/DEL/2013 3 SO-CALLED AGENTS AND THE INDIAN COMPANIES. THE LD. CIT(A) AFFIRMED THE ASSESSMENT ORDER ON THIS ISSUE. 4. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE REL EVANT MATERIAL ON RECORD. THERE IS NO DISPUTE ON THE FACT THAT THE A SSESSEE RECEIVED COMMISSION OF RS.32.49 LAC FROM M/S SHANGHAI DERUI MACHINERY MANUFACTURING CO. LTD., 338, YUELUO ROAD, SHANGHAI, FOR MAKING SALE OF SIX DRAWING MACHINES. SINCE THE CUSTOMERS WERE FOUND BY THE ASSESSEE WITH THE HELP OF FOUR PARTIES, THE ASSESSE E PARTED WITH 40% OF SUCH COMMISSION RECEIVED FROM M/S SHANGHAI DERUI MA CHINERY MANUFACTURING CO. LTD. TO THEM AS A QUID PRO QUO OF THEIR RESPECTIVE SERVICES. THE ASSESSING OFFICER ISSUED NOTICES U/S 133(6) TO THESE FOUR PARTIES WHO ACCEPTED TO HAVE RENDERED SERVICES AND OBTAINED COMMISSION FROM THE ASSESSEE. THE RELEVANT EXTRACTION FROM PA GE 4 OF THE ASSESSMENT ORDER IS AS UNDER:- AMT PARVEEN AHUJA 2,44,153/- COMMISSION HAS BEEN PAID B EING 40% OF THE COMMISSION RECEIVED BY MR. MUKHERJEE ON THE DEAL MENTIONED BELOW, I.E., 40% OF 6,10,381/- =2,44,153/-, TOTAL AMT. OF RS.16,36,982/- AS FROM CHINESE ITA NO.1103/DEL/2013 4 FIRM WHICH WAS NEGOTIATED THROUGH US OF RS.6,54,793/-. I HAVE RECEIVED COMMISSION FROM D.B. MUKHERJEE ON SUPPLY OF MACHINES IMPORTED FROM CHINA AND SOLD THROUGH ME TO CHANDRA METAL, ALLAHABAD. T.N. SALUJA -HUF 1,06,735/- MR. MUKHERJEE RECEIVED A COMMISSION OF RS.266837/- AND 40% OF THIS AMOUNT I.E., RS.1,06,735/- WAS PAID TO US. WE HAVE RECEIVED COMMISSION FROM MR. MUKHERJEE ON SUPPLY OF MACHINES IMPORTED FROM CHINA AND SOLD THROUGH US TO VIDYA METAL BHIWANI. WE HELPED MR. MUKHERJEE IN IDENTIFICATION OF CUSTOMER, PROCUREMENT OF ORDER AND ASSISTED HIM AND HIS TEAM IN FOLLOW UP. SURINDER KUMAR 2,43,663/- I RECEIVED A COMMISSION O F RS.2,43,663/- FROM D.P. MUKHERJI BEING 40% OF RS.6,09,156/- I.E. TOTAL COMMISSION RECEIVED FROM CHINA. I HAVE WORKED FOR D.B. MUKHERJI ON COMMISSION BASIS FOR PROCUREMENT OF ORDER FOR SUPPLY OF MACHINES IMPORTED FROM OUTSIDE INDIA AND SOLD TO DIFFERENT PARTIES. HINDALCO RUBBER 6,54,793/- WE HAVE BEEN PAID COMMIS SION OF RS.6,54,793/- BEING 40% OF THE TOTAL AMT. OF RS.16,36,982/- RECEIVED AS COMMISSION FROM CHINESE FIRM ON THE DEAL WHICH WAS NEGOTIATED THROUGH US. COMMISSION WAS PAID TO FIRM FOR REFERRING AND ASSISTING MUKHERJEE AND HIS STAFF IN PROCURING ORDER FOR CHINESE MACHINES IMPORTED INTO INDIA FOR SCR BANGALORE. 5. IT IS OBVIOUS THAT ALL THE FOUR PERSONS ACCEPTED TO HAVE RECEIVED COMMISSION FROM THE ASSESSEE FOR MAKING SALES WITH THEIR ASSISTANCE. ITA NO.1103/DEL/2013 5 THESE REPLIES WERE DIRECTLY RECEIVED BY THE ASSESSI NG OFFICER, WHICH HAVE NOT BEEN CONTROVERTED. WHEN THE POSITION IS SO CLEAR THAT THE ASSESSEE RECEIVED COMMISSION AND PARTED 40% OF THE SAME WITH OTHER PARTIES WHO ARRANGED FOR THE CUSTOMERS, WE FAIL TO APPRECIATE AS TO HOW ANY DISALLOWANCE CAN BE MADE, MORE SO WHEN RECIPIEN TS HAVE DULY ADMITTED TO HAVE RECEIVED THE COMMISSION AND THE AS SESSEE MADE PAYMENT TO THEM AFTER DUE DEDUCTION OF TAX AT SOURC E. THE MERE FACT THAT THERE WAS NO AGREEMENT ETC. WITH THESE PARTIES, CAN NOT COME IN THE WAY OF THE DEDUCTIBILITY, WHICH IS OTHERWISE A GENUINE EXPENSE INCURRED BY THE ASSESSEE IN DOING HIS BUSINESS. OVERTURNING TH E IMPUGNED ORDER ON THIS ISSUE, WE ORDER FOR THE DELETION OF ADDITION. 6. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.08.201 7. SD/- SD/- [K. NARASIMHA CHARY] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 18 TH AUGUST, 2017. DK ITA NO.1103/DEL/2013 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.