BTL EPC Ltd., Kolkata V. DCIT, CIR-1(1), KOLKATA, Kolkata

ITA 1243/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1651 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 02-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARYA
• Assessee Lawyers: AMITAVA BOSE
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA D BENCH, KOLKATA [BEFORE SRI M. BALAGANESH , HONBLE ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI , HONBLE JUDICIAL M EMBER ] I.T .A. NO. 1 243 /KOL/201 6 ASSESSMENT YEAR: 20 10 - 11 BTL EPC LTD. .. .. ... APPELLANT (FORMERLY: BENGAL TOOLS LTD.) 2, JESSORE ROAD KOLKATA 700 028 [AADCS 7466 G] DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), KOLKATA. RESPONDENT AAYAKAR BHAWAN P - 7, CHOWRINGHEE SQUARE 7 TH FLOOR KOLKATA 700 069 APPEARANCES BY: SHRI AMITAVA BOSE, ADVOCATE , APPEAR ED ON BEHALF OF THE ASSESSEE. SHRI ARINDAM BHATTACHARYA , ADDL. CIT , DR APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JANUARY 1 1 TH , 201 8 DATE OF PRONOUNCING THE ORDER : FEBRUARY 02 ND , 201 8 O R D E R PER M. BALAGANESH, AM : - THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(APPEALS) - 5, KOLKATA, (HEREINAFTER REFERRED TO AS THE LD. CIT(A)), DT. 28.03.2016, PASSED U/S 250 OF THE INCOME TAX ACT, 1961(HEREINAFTER THE ACT) RELATING TO ASSESSMENT YEAR 2010 - 11. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED , IN RESTRICTING THE DISALLOWANCE OF COMMISSION PAID, TO 10% AS AGAINST THE ESTIMATED DISALLOWANCE MADE BY THE LD. ASSESSING OFFICER , AT 20% THEREON, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE FACTS OF THIS ISSUE THAT THE ASSESSEE DEALS IN POWER TILLERS, WHICH ARE SOLD TO FIRMS THROUGH DEALERS AND SALESMEN AND HAS PAID COMMISSION TO THE DEALERS AND SALESMEN. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 - 11 ON 12/10/2010, DECLARING TOTAL INCOME AT RS. 2 I.T.A. NO. 1243/KOL/2016 ASSESSMENT YEAR: 2010 - 11 BTL EPC LTD (FORMERLY: BENGAL TOOLS LTD.) 7,62,14,508/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. ASSESSING OFFICER ASKE D THE ASSESSEE TO SUBMIT DETAILS OF TOTAL COMMISSION EXPENSES CLAIMED AS DEDUCTION IN THE RETURN OF INCOME. THE ASSESSEE FILED A WRITTEN SUBMISSION STATING THAT THE PAYMENT OF COMMISSION VARIES FROM MODEL TO MODEL AND AS SUCH THERE IS NO FIXED RATE OF COMM ISSION AND IT ALSO VARIES BASED ON THE VOLUME OF TAKE , TAKEN BY THE CONCERNED PARTIES. THE ASSESSEE ALSO REPLIED THAT SUCH OTHER FACTORS LIKE COMPETITION AND MAINTAINING THE MARKET SHARE IN THE DISTRICTS, IN WHICH THE PRODUCTS ARE SOLD ETC. ALSO PLAY A CRU CIAL ROLE IN DETERMINING THE PAYMENT OF COMMISSION TO THE SAID PARTIES. THE LD. ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FAILED TO PRODUCE LEDGER COPIES OF THE DEALERS BEFORE IT AND DETAILS OF COMMISSION PAID TO SALESMEN WERE ALSO NOT FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ACCORDINGLY, HE SOUGHT TO DISALLOW THE COMMISSION ON AN ESTIMATED BASIS AT 20 PER CENT OF THE TOTAL COMMISSION OF RS.1,70,26 ,835/ - AND MADE A DISALLOWANCE OF RS.34,05,367/ - , IN THE ASSESSMENT. 4. THE LD. CIT(A) BROUGH T DOWN THIS DISALLOWANCE TO 10 PER CENT, IN THE FIRST APPEAL. 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: - 1. FOR THAT AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WRONG IN RESTRICTING THE DISALLOWANCE TO 10 % OF THE COMMISSION PAID. ON A PROPER CONSIDERATION OF THE FACTS OF THE CASE HE SHOULD HAVE FOUND THAT ENTIRE DISALLOWANCE OF RS.34,05,367/ - IS WRONG AND IS TO BE DELETED. 2. FOR THAT THE APPELLANT CRAVES LEAVE TO ADDUCE AND/OR ALTER FURTHER GROUND/S ON OR BEF ORE HEARING OF THE APPEAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE LD. A/R PLACED A DETAIL ED PAPER BOOK CONTAINING THE ENTIRE DETAILS OF COMMISSION OF BROKERAGE PAID UNDER EACH HEAD TOGETHER WITH THE NAME AND ADDRESS OF THE PARTIES TO WHOM IT WAS PAID, DETAILS OF THEIR RESPECTIVE PAN AND DETAILS OF THE TAX DEDUCTED AT SOURCE ON THE PAYMENTS MAD E THEREON AND DETAILS OF DIRECT DISCOUNT PAID TO VARIOUS DEALERS TOGETHER WITH THE RESPECTIVE INVOICE NUMBERS AND THE NAMES AND ADDRESSES OF THE DEALERS, FROM PAGES 4 TO 10. WE FIND THAT THESE PAPERS THOUGH STATED TO HAVE BEEN FILED BY THE LD. A/R, BEFORE THE LOWER AUTHORITIES, NEITHER THE LD. ASSESSING OFFICER 3 I.T.A. NO. 1243/KOL/2016 ASSESSMENT YEAR: 2010 - 11 BTL EPC LTD (FORMERLY: BENGAL TOOLS LTD.) NOR THE LD. CIT(A) HAS GIVEN ANY FINDING IN THEIR RESPECTIVE ORDERS WITH REGARD TO THE SAME. HENCE WE DEEM IT FIT AND PROPER, IN THE INTEREST OF NATURAL JUSTICE AND FAIRPLAY TO REMAND THIS ISSUE TO T HE FILE OF THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION, UNINFLUENCED BY THE DECISION OF TAKEN EARLIER IN THIS REGARD AND PASS AN ORDER, IN ACCORDANCE WITH LAW IN RESPECT OF THIS ISSUE. ACCORDINGLY , THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATIS TICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. KOLKATA, THE 2 N D DAY OF F E B R U ARY , 201 8 . S D / - S D / - [ S.S. VISWANETHRA RAVI ] [ M. BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 0 2 . 0 2 .201 8 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. BTL EPC LTD (FORMERLY: BENGAL TOOLS LTD.) 2, JESSORE ROAD KOLKATA 700 028 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), KOLKATA AAYAKAR BHAWAN P - 7, CHOWRINGHEE SQUARE 7 TH FLOOR KOLKATA 700 069 3. CIT(A) - 4. CIT - , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES