Rohit Nandlal Trust, Ahmedabad V. The ACIT.,Circle-3, Ahmedabad

ITA 1108/AHD/2012

• Counselvise Citation: 110820514 RSA 2012
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 21-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A TRIKEY

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , . ! ' ,#$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A. NO.1108/AHD/2012 ( ! ' ! ' ! ' ! ' / / / / ASSESSMENT YEAR : 2008-09) ROHIT NANDLAL TRUST PROP.MODERN TUBES 12, 2 ND FLOOR SHANTI SADAN ESTATE MIRZAPUR AHMEDABAD-380 001 ! ! ! ! / VS. THE ASST.CIT CIRCLE-3 AHMEDABAD-380 015 ( #$ ./)* ./ PAN/GIR NO. : AABTR 1227 R ( (+ / // / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . # / APPELLANT BY : MS.URVASHI SHODHAN ,-(+ / . # / RESPONDENT BY : SHRI A.TRIKEY, SR.D.R. !0 / 1$ / / / / DATE OF HEARING : 19/09/2012 2 ' / 1$ / DATE OF PRONOUNCEMENT : 19.10.12 #3 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FR OM THE ORDER OF THE LD.CIT(A)-6 AHMEDABAD PASSED FOR A.Y. 2008-09 AND THE SUBSTANTIVE GROUND IS AS FOLLOWS:- (1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) 6, AHMEDABAD HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN FRAMING APPELLATE ORDER U/S.250 OF THE I.T. ACT FOR A.Y. 2008-09 ON 23 RD DAY OF APRIL, 2012. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE IT ACT DATED 01.11.2010 WE RE THAT THE ASSESSEE IS A PRIVATE-TRUST AND IN THE BUSINESS OF TRADING OF GA LVANIZED PIPES, MS PIPES, ETC. ITA NO.1108/AHD/2012 ROHIT NANDLAL TRUST VS. ASST.CIT ASST.YEAR 2008-09 - 2 - IT WAS NOTED BY THE AO THAT THE ASSESSEE HAD PAID COMMISSION ON SALES. THE COMMISSION WAS PAID TO H.T.VORA-HUF, CHETNA B.VORA AND BIMAL ENTERPRISES RESPECTIVELY OF RS.1,0,000/-, RS.1,25,000/- AND R S.2,75,050/-. IT WAS EXPLAINED THAT THE BUSINESS IS COMPETITIVE, THEREFO RE COMMISSION PAID TO AGENTS FOR BRINGING ORDERS AND THE PAYMENT WAS MADE THROUG H ACCOUNT PAYEE CHEQUES OVER WHICH TDS WAS DEDUCTED. THE COMMISSION @ 1% WAS NEITHER UNREASONABLE NOR EXCESSIVE. HOWEVER, AO WAS NOT CO NVINCED AND HELD THAT THE COMMISSION WAS PAID TO THE BENEFICIARIES OF THE TRUST, HENCE PAYMENT MADE TO PERSONS SPECIFIED U/S.40A(2)(B) WAS DISALLOWED. 3. LD.CIT(A) HAS HELD THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS OF PLACING ON RECORD THE RENDERING OF SERVICES BY THOS E AGENTS. THE ADDITION WAS CONFIRMED. 4. WE HAVE HEARD BOTH THE SIDES. THE NAME, ADDRESS , PAN AND THE DETAILS OF THE COMMISSION PAID ALONG WITH THE TDS DETAIL IN RESPECT OF ALL THE THREE PARTIES HAVE BEEN PLACED ON RECORD. THE COMMISSION WAS PAID @ 1% OF THE AMOUNT OF SALES. THE COPIES OF RETURN OF INCOME FI LED BY THOSE PARTIES HAVE ALSO BEEN PLACED IN THE COMPILATION. BEFORE US, IT WAS ALSO CONTESTED THAT IN A.Y. 2006-07 THE ASSESSMENT WAS MADE U/S.143(3) VID E AN ORDER DATED 19.3.2008, WHEREIN THE PROFIT AS DISCLOSED BY ASSES SEE WAS NOT DISTURBED ON THE POINT OF PAYMENT OF COMMISSION AND THE FACTS OF THA T YEAR WERE IDENTICAL WITH THE FACTS UNDER CONSIDERATION. LD.AR HAS THEREFO RE PLEADED THAT A CONSISTENT VIEW ON IDENTICAL FACTS SHOULD HAVE BEEN TAKEN BY T HE REVENUE DEPARTMENT. THE ASSESSEE HAS FURNISHED THE DETAILS OF THE BROKE RAGE PAID ALONG WITH THE PARTY-WISE BILLS RAISED. THE EXPLANATION OF THE ASSESSEE WAS THAT THE COMPETITION IN MAHARASHTRA WAS INCREASING DAY-BY-DA Y, HENCE ADVERSELY EFFECTING THE BUSINESS, THEREFORE THE SAID THREE PA RTIES WERE ENGAGED TO PROMOTE THE SALES. IT WAS THEIR DUTY TO COLLECT THE ORDER AS ALSO TO FOLLOW UP THE TRANSACTION. THE ASSESSEE HAS PAID THE SAID AMOUNT ONLY TO INCREASE THE SALES ITA NO.1108/AHD/2012 ROHIT NANDLAL TRUST VS. ASST.CIT ASST.YEAR 2008-09 - 3 - AND TO ENSURE THE RECOVERY OF PAYMENT. SINCE THE E XPENDITURE WAS WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS, THEREF ORE IT WAS ARGUED THAT THE DISALLOWANCE WAS NOT IN ACCORDANCE WITH LAW. CASE LAWS RELIED UPON WERE; IN THE CASE OF CIT VS. SHREE SAJJAN MILLS LTD. 112 ITD 135 [ITAT INDORE ], IN THE CASE OF ALUMINIUM CORPORATION OF INDIA LTD. VS. CIT 86 ITR 11(SC) AND IN THE CASE OF CIT VS. INDO SAUDI SERVICES (TRAVEL) (P ) LTD. 310 ITR 306 (BOM.). RESPECTFULLY RELYING UPON THESE DECISIONS AND CONSI DERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HEREBY HOLD THAT THE TRUST HAS AVAILED THE SERVICES OF THESE PERSONS, THEREFORE THE COMMIS SION WAS LEGITIMATELY PAID ON THE BUSINESS BROUGHT BY THEM. RESULTANTLY GROU ND RAISED BY THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S ALLOWED. SD/- SD/- ( . ! ' ) ( ) #$ ( A. MOHAN ALANKAMONY ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIA L MEMBER AHMEDABAD; DATED 19/ 10 /2012 41..!, .!../ T.C. NAIR, SR. PS #3 / ,5 6#5' #3 / ,5 6#5' #3 / ,5 6#5' #3 / ,5 6#5'/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT 3. 7 / CONCERNED CIT 4. 7() / THE CIT(A)-6, AHMEDABAD 5. 5:; ,! , , / LEARNED DEPARTMENTAL REPRESENTATIVE, ITAT, AHMEDABAD 6. ;< =0 / GUARD FILE. #3! #3! #3! #3! / BY ORDER, -5 , //TRUE COPY// > >> >/ // / ) ) ) ) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD