Yudo Hot Runner India Pvt. Ltd., Ahmedabad V. The Dy.CIT, Circle-8, Ahmedabad

ITA 1172/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6077 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 21-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Assessee Lawyers: G C PIPARA
• Keywords: Opportunity of being heard

Judgement Text

, , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER !# I.T.A. NO. 1172/AHD/2014 ( / ASSESSMENT YEAR : 2006-07) YUDO HOT RUNNER INDIA PVT. LTD., FLAT NO.A/402, SHRINAND NAGAR II, VEJALPUR, AHMEDABAD # VS. THE DCIT, CIRCLE 8, 2 ND FLOOR, PRATYAKSH KAR BHAVAN, NR. POLYTECHNIC, AMBAWADI, AHMEDABAD 380 015 $ # % & # PAN/GIR NO. : AAACY 1303 R ( !$' / APPELLANT ) .. ( ($' # RESPONDENT ) !$') # APPELLANT BY : SHRI G. C. PIPARA A.R. ($'*) / RESPONDENT BY : SHRI RAJESH MEENA, SR. D.R. + ,*-. / DATE OF HEARING 09/02/2018 /012*-. / DATE OF PRONOUNCEMENT 19/02/2018 3# O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XIV, AHMEDABAD , VIDE APPEAL NO.CIT(A)-XIV/DC.CIR.8/242/2012-13 DATED 16/01/2013 FOR THE ASSESSMENT YEAR (AY) 2006-07. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE ALS: 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN CONFIRMING THE ADDITION OF RS.50,35,025/- MADE BY THE AO ON AC COUNT OF ITA NO.1172/AHD /2014 YUDO HOT RUNNER INDIA PVT. LTD. VS. DCIT ASST.YEAR 2006-07 - 2 - DISALLOWANCE OF COMMISSION EXPENSES WITHOUT PROPER APPRECIATION OF FACTS AND COMPREHENSIVE EVIDENCES A VAILABLE ON RECORD MERELY ON THE GROUND THAT THE APPELLANT HAD NOT PRODUCED THE PARTIES FOR EXAMINATION. IN VIEW OF FACTS AND S UBMISSIONS FILED AS WELL AS LEGAL POSITION, THE IMPUGNED ADDIT ION OF RS.50,35,025/- REQUIRES TO BE DELETED. 2. THE LD. CIT(A) FURTHER ERRED IN NOT APPRECI ATING THE FACT THAT THE APPELLANT HAD FURNISHED COMPREHENSIVE EVIDENCES IN FORM OF NAME, ADDRESS, AMOUNT, PAN AND SERVICES RENDERED BY THE PARTIES TO WHOM THE COMMISSION HAD BEEN PAID AND HE NCE MERELY BECAUSE THE SAID PARTIES DID NOT RESPOND TO NOTICE/ SUMMONS ISSUED, NO ADVERSE INFERENCE IS WARRANTED IN CASE O F THE APPELLANT. ACCORDINGLY, THE IMPUGNED ADDITION OF RS .50,35,025/- EVEN OTHERWISE REQUIRES TO BE DELETED. 3. THE LD. CIT(A) ALSO ERRED IN NOT APPRECIATIN G THE FACT THAT THE PARTIES IN QUESTION HAD DIRECTLY FILED VARIOUS EVID ENCES BEFORE THE AO, WHICH HAVE NEITHER BEEN CONTROVERTED NOR DISPRO VED BY THE AO OR THE LD.CIT(A). HENCE, THE IMPUGNED ADDITION O F RS.50,35,025/- EVEN OTHERWISE REQUIRES TO BE DELETE D. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, MO DIFY OR DELETE ANY OF THE ABOVE GROUNDS AS WELL AS TO SUBMIT ADDIT IONAL GROUNDS AT THE TIME OF HEARING OF THE APPEAL 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- IN THIS CASE, RETURN OF INCOME WAS FILED ON 27/02/2 007 DECLARING TOTAL INCOME AT RS.83,813,085/-. THE ASSESSMENT U/S .143(3) WAS FINALIZED ON 23/12/2008 DETERMINING TOTAL INCOME OF RS.1,43,1 7,338/-. IN THE ASSESSMENT ORDER AMONG OTHER ADDITIONS, ADDITION OF RS.50,35,025 WAS MADE ON ACCOUNT OF DISALLOWANCE OF COMMISSION EXPEN SES CLAIMED IN RESPECT OF THREE PARTIES. THE ASSESSEE CHALLENGED T HE DISALLOWANCE BEFORE THE LD. CIT(A) WHO DELETED THE DISALLOWANCE ON THIS ISSUE. ITA NO.1172/AHD /2014 YUDO HOT RUNNER INDIA PVT. LTD. VS. DCIT ASST.YEAR 2006-07 - 3 - 3.1 THEREAFTER, REVENUE PREFERRED APPEAL AGAINST TH E ORDER OF THE LD.CIT(A) BEFORE THE ITAT VIDE ORDER IN ITA NO.1893 /AHD/2009 DATED 10/03/2011 SET ASIDE THE ORDER OF THE CIT(A) AND RE STORED THE ISSUE BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION, WITH FOLLOWING DIRECTION: WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORI TIES BELOW AND RESTORE THE ISSUE TO THE FILE OF THE AO WITH DIRECT ION TO THE ASSESSEE TO FILE COMPLETE DETAILS OF SALES MADE THROUGH THE COM MISSION AGENTS. THE ASSESSEE SHALL ALSO PRODUCE CORRECT ADDRESSES OF TH E PARTIES SO THAT THE AO CAN ISSUE SUMMONS AGAINST THEM FOR PRODUCTION AN D VERIFICATION OF THE DETAILS AND THE GENUINENESS OF THE COMMISSION P AYMENT. THE AO ON FILING THE DETAILS AS NOTED ABOVE MAY PROCEED WITH THE MATTER IN ACCORDANCE WITH LAW AND SHALL PASS REASONED ORDER B Y GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3.2 IN VIEW OF THE AFORESAID DIRECTION A NOTICE WAS SERVED TO THE ASSESSEE FOR FURNISHING THE DETAILS AND EVIDENCE IN RESPECT OF ITS CLAIM ON THE ISSUE SET ASIDE BY THE HONBLE ITAT ON 17/06/20 11 AND FOLLOWING DOCUMENTS WERE ASKED FROM THE APPELLANT TO SUBMIT B EFORE THE LD. AO. (I) TO FILE COMPLETE DETAILS OF SALES MADE THROUGH THE COMMISSION AGENT. (II) TO PRODUCE CORRECT ADDRESS OF THE PARTIES SO THAT THE AO CAN ISSUE SUMMONS AGAINST THEM FOR PRODUCTION AND VERIF ICATION OF THE DETAILS AND GENUINENESS OF THE COMMISSION PA YMENT. 3.3 IN RESPECT OF TORAN TRADING, THE ASSESSEE FURNI SHED THE SAME ADDRESS AS FURNISHED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. SUMMON U/S.131 OF THE I.T. ACT WERE IS SUED TO BOTH THE ABOVE PARTIES REQUIRING THEM TO PERSONALLY ATTEND T HE OFFICE ON 22/11/2012 WITH VARIOUS DETAILS AS UNDER: (1) COPY OF LEDGE ACCOUNT OF M/S. YUDO HOT RUNNER (INDI A) PVT. LTD. IN YOUR BOOKS OF ACCOUNTS FOR F.Y. 2005-06. ITA NO.1172/AHD /2014 YUDO HOT RUNNER INDIA PVT. LTD. VS. DCIT ASST.YEAR 2006-07 - 4 - (2) AMOUNT OF COMMISSION RECEIVED BY YOU FROM M/S. YUDO HOT RUNNER (INDIA) PVT. LTD. DURING THE PERIOD 01/04/20 05 TO 31/03/2006. (3) NATURE OF SERVICES RENDERED BY YOU TO YUDO HOT RUNN ER (INDIA) FOR WHICH YOU RECEIVED COMMISSION DURING F.Y. 2005-06. (4) COPY OF YOUR BANK STATEMENT FOR F.Y.2005-06. (5) COPY OF YOUR RETURN OF INCOME FOR A.Y. 2006-07. 3.4 DESPITE OF THE NOTICE BOTH THE ABOVE SAID PERSO NS DID NOT APPEAR BEFORE THE AO. BUT ASSESSEE FURNISHED COPIES OF THE SOME COMPUTER GENERATED INVOICES OF YUDO CO. LTD., KOREA MENTIONI NG THE NAME OF TRADERS AT BOTTOM OF THE INVOICE THROUGH PRITHVI CO RPORATION OR THROUGH TORAN TRADERS TO WHOM COMMISSION WAS PAID. THE AO W AS OF THE OPINION THAT THERE IS NO AGREEMENT ENTERED INTO BET WEEN THE ASSESSEE AND THE SO-CALLED COMMISSION AGENTS OR THERE IS NO EVID ENCES SHOWING THE INVOLVEMENT OF SO-CALLED COMMISSION AGENTS IN PROCU RING ANY ORDER OF THE ASSESSEE. THEREFORE, HE DISALLOWED THE COMMISSI ON EXPENSES OF RS.50,35,025/-. 4. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) AND SAME WAS WITHOUT ANY SUCC ESS. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. THE APPELLANT COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF HOT RUNNER SYSTEM, TUBE HEATERS, TEMPERATURE CONTRO LLERS ETC; AND IS ALSO WORKING AS INDENTING AGENTS FOR INDIA IN RESPE CT OF PRODUCTS MANUFACTURED BY ITS PARENT COMPANY YUDO COMPANY LTD ., KOREA AND DURING THE YEAR UNDER CONSIDERATION, IT HAS RECEIVE D A COMMISSION OF ITA NO.1172/AHD /2014 YUDO HOT RUNNER INDIA PVT. LTD. VS. DCIT ASST.YEAR 2006-07 - 5 - RS.2,05,22,549/- ON ACCOUNT OF SALES MADE TO VARIOU S PARTIES. IN ORDER TO RENDER THE SAID SERVICES OF SALES TO LOCAL COMPANIE S IN INDIA, THE APPELLANT HAS APPOINTED M/S. TORAN TRADERS AND M/S. PRITHVI CORPN., AS COMMISSION AGENTS, FOR WHICH THEY HAVE BEEN PAID CO MMISSION OF RS.14,98,998/- AND RS.34,73,415/- RESPECTIVELY. 5.1 PURSUANT TO THE ITAT DIRECTION ONCE BOTH THE CO MMISSION AGENTS WENT TO THE OFFICE OF THE INCOME TAX OFFICER BUT ON SAID DATE LEARNED INCOME TAX OFFICER WAS NOT PRESENT IN HIS OFFICE AN D IN RESPECT OF THE SAME APPELLANT ALSO WROTE A LETTER, SAME IS PART OF PAPER BOOK AT PAGE NO.69 DATED 02/12/2013. BECAUSE LD. AO WAS ON LEAVE , THEREFORE, THEIR STATEMENT COULD NOT BE RECORDED. 5.2 THE APPELLANT SUBMITTED DOCUMENTARY EVIDENCE SU CH AS CONFIRMATION OF AGENT ALONG WITH PAN NO., COPY OF A CCOUNT DULY CONFIRMED, COPY OF PAN CARD, COPY OF ACKNOWLEDGEMEN T OF RETURN, COPY OF DEBIT NOTE, DETAILS OF ORDER PROCURED GIVIN G DESCRIPTION OF THE ITEM PROCURED, ORDER DATE AND THE AMOUNT IN US $ FO R WHICH ORDER HAS BEEN PROCURED BY THE COMMISSION AGENTS FOR THE COMP ANY AND ON EACH AND EVERY BILLS OF THE YUDO COMPANY LTD., KOREA. CO MPANY AGENTS NAME HAS ALSO BEEN MENTIONED. THEREFORE, IT IS CLEA R THAT AT THE GIVEN ADDRESS IN THE CONFIRMATION, THESE TWO PARTIES WERE IN EXISTENCE AND THERE IS NO DOUBT ABOUT THE SERVICES RENDERED BY THEM. IT WAS ALSO SUBMITTED THAT ON THE ENTIRE AMOUNT OF COMMISSION PAID BY THE COMPANY, TDS AT THE APPLICABLE RATE HAS ALSO BEEN DEDUCTED AND ONLY AFTER DEDUCTION OF TDS, THE BALANCE AMOUNT HAS BEEN PAID TO THE COMMIS SION AGENTS. THIS ITA NO.1172/AHD /2014 YUDO HOT RUNNER INDIA PVT. LTD. VS. DCIT ASST.YEAR 2006-07 - 6 - FACT IS ALSO CLEAR FROM THE COPIES OF ACCOUNT SUBMI TTED BY THE APPELLANT TO THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ALONGWITH THE CONFIRMATION. ALL THE ABOVE SAID DETAILS WERE DULY SIGNED BY THE COMMISSION AGENTS. 6. IN OUR CONSIDERED OPINION THAT EXPENDITURE HAS B EEN INCURRED BY THE COMPANY AND COMMISSION HAS BEEN PAID TO THE COM MISSION AGENTS FOR THE PURPOSE OF THE BUSINESS, WHICH IS IN NORMAL COU RSE OF BUSINESS AND LOWER AUTHORITIES HAS ERRED IN DISALLOWANCE OF RS.5 0,35,025/- CLAIMED BY THE APPELLANT. 7. IN THE RESULT, APPEAL FILED BY THE APPELLANT IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 19/02/2018 SD/- SD/- ( ) 4 5 ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 19/02/2018 PRITI YADAV, SR.PS ITA NO.1172/AHD /2014 YUDO HOT RUNNER INDIA PVT. LTD. VS. DCIT ASST.YEAR 2006-07 - 7 - !'# $#! # COPY OF THE ORDER FORWARDED TO : 1. !$' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 67- + 8- / CONCERNED CIT 4. + 8- 4!5 / THE CIT(A)-XIV, AHMEDABAD. 5. 9:;-67 !.!672 ! / DR, ITAT, AHMEDABAD 6. ;<=, # GUARD FILE. % & / BY ORDER, (9-- //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 15/02/2018 (DICTATION-PAD 6 PAG ES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16/02/2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER