ESBEE MACHINERY P. LTD, MUMBAI V. ITO 10(3)(4), MUMBAI

ITA 1253/MUM/2010

• Counselvise Citation: 125319914 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 29-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 16-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D SONGATE
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI P.M. JAGTAP (AM) AND SMT. ASHA VIJAYAR AGHAVAN (JM) I.T.A.NO.1253/MUM/2010 ASSESSMENT YEAR: 2006-07 M/S. ESBEE MACHINERY PVT. LTD., 2, AMRAPALI 90 FEET ROAD, MULUND (EAST), MUMBAI 400 081 PAN: AABCE 4406 E VS. THE INCOME-TAX OFFICER, WARD 10(3)(4), AAYAKAR BHAVAN MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI D. SONGATE O R D E R PER P.M. JAGTAP, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS)-22, MUMBAI, DAT ED 04.12.2009 FOR THE ASSESSMENT YEAR 2006-07 AND THE SOLITARY ISSUE ARIS ING OUT OF THE SAME RELATES TO THE ADDITION OF RS. 3,92,193/- MADE BY THE ASSESSIN G OFFICER AND CONFIRMED BY THE LEARNED CIT(A) ON ACCOUNT OF DISALLOWANCE OF COMMIS SION. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND DEALING OF MACHINERY. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 30.11.2 006 DECLARING TOTAL INCOME OF RS. 2,83,134/-. IN THE PROFIT & LOSS ACCOUNT FILED ALONG WITH THE SAID RETURN, A SUM OF RS.3,92,193/- WAS DEBITED BY THE ASSESSEE ON ACC OUNT OF COMMISSION ON SALES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS CALLED UPON BY THE ASSESSING OFFICER TO SUBSTANTIATE AND JUSTIFY I TS CLAIM ON ACCOUNT OF COMMISSION PAID ON SALES. THE ASSESSEE, HOWEVER, FAILED TO SUP PORT AND SUBSTANTIATE THE SAID CLAIM BY PRODUCING THE RELEVANT DETAILS AND DOCUMEN TS. THE ASSESSING OFFICER, THEREFORE, DISALLOWED THE COMMISSION EXPENDITURE CL AIMED BY THE ASSESSEE AND ADDED THE AMOUNT THEREOF TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 30.12.2008. ITA NO.1253/M/2010 M/S. ESBEE MACHINERY PVT. LTD. 2 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LEARNED CIT(A). THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE DURING T HE COURSE OF APPELLATE PROCEEDINGS IN ORDER TO JUSTIFY THE PAYMENT OF COMM ISSION ON SALES WAS NOT FOUND ACCEPTABLE BY THE LEARNED CIT(A), WHO PROCEEDED TO CONFIRM THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SALES C OMMISSION FOR THE FOLLOWING REASONS GIVEN IN PARA 2 .4 OF HIS IMPUGNED ORDER: I HAVE GONE THROUGH THE ASSESSMENT ORDER, PERUSED THE SUBMISSIONS MADE BY THE APPELLANT AND ALSO DISCUSSE D THE CASE WITH A/R OF THE APPELLANT. A.O. HAS DISALLOWED RS. 3,92,193/- COMMISSION PAID ON SALES ON THE GROUND THAT THE APP ELLANT FAILED TO SUBMIT THE DETAILS CALLED FOR. BEFORE ME IT WAS ST ATED THAT THE APPELLANT HAD FILED LEDGER ACCOUNT WHICH IS ALSO ME NTIONED IN ASSESSMENT ORDER. APPELLANT FURTHER CLAIMED THAT AL L THE PARTIES TO WHOM COMMISSION WAS PAID ARE ASSESSED TO TAX. HOWE VER, ON PERUSAL OF THE DETAILS FILED BEFORE ME, IT IS NOTIC ED THAT OUT OF TEN PARTIES PAN IS MENTIONED ONLY TWO. HENCE, THE CONT ENTION O THE APPELLANT THAT ALL PARTIES ARE BEING ASSESSED TO TA X IS NOT CORRECT. THE APPELLANT HAS ALSO NOT FILED ANY PROOF AS TO TH E EXPENDITURE WAS INCURRED FOR THE PURPOSE OF BUSINESS AND ACCORDINGL Y IN MY OPINION THE A.O. WAS JUSTIFIED IN DISALLOWING OF COMMISSION PAID WHICH IS UPHELD. 4. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), TH E ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. THE APPEAL FILED BY THE ASSESSEE IN THIS CASE WA S INITIALLY FIXED FOR HEARING ON 18.01.2011. THE ASSESSEE, HOWEVER, SOUGHT ADJOUR NMENT OF THE SAID HEARING WHICH WAS FIXED BY THE BENCH ON 29.03.2011. THE AS SESSEE AGAIN SOUGHT ADJOURNMENT OF THE HEARING FIXED ON 29.3.2011 ON TH E GROUND THAT ITS AUTHORIZED REPRESENTATIVE WAS NOT IN TOWN. THE HEARING FIXED ON 29.03.2011, THEREFORE, WAS ADJOURNED BY THE BENCH TO 31.3.2011 MAKING IT CLEAR THAT NO FURTHER ADJOURNMENT WOULD BE GRANTED. THE ASSESSEE, HOWEVER, STILL MOV ED AN APPLICATION SEEKING ADJOURNMENT OF THE HEARING FIXED ON 31.03.2011 ON T HE GROUND THAT ITS AUTHORIZED REPRESENTATIVE HAD NOT COME BACK YET. SINCE THE RE ASON GIVEN BY THE ASSESSEE FOR SEEKING ADJOURNMENT WAS NOT CONVINCING AND THE SAME WAS NOT SUPPORTED BY ANY ITA NO.1253/M/2010 M/S. ESBEE MACHINERY PVT. LTD. 3 DOCUMENTARY EVIDENCE, THE REQUEST OF THE ASSESSEE F OR ADJOURNMENT WAS NOT ACCEDED TO. EVEN, THERE WAS NO PERSON DULY AUTHORIZ ED BY THE ASSESSEE PRESENT IN THE COURT TO SEEK THE ADJOURNMENT FIXED ON 31.03.20 11. THIS APPEAL OF THE ASSESSEE IS, THEREFORE, BEING DISPOSED OF EX PARTE ON MERITS AFTER HEARING THE ARGUMENTS OF THE LEARNED DEPARTMENTAL REPRESENTATIV E AND PERUSING THE RELEVANT MATERIAL ON RECORD. 6. IT IS OBSERVED THAT NEITHER BEFORE THE ASSESSIN G OFFICER NOR BEFORE THE LEARNED CIT(A) THE REQUIRED DETAILS AND DOCUMENTS W ERE FURNISHED BY THE ASSESSEE TO SHOW THE EXACT NATURE OF THE SERVICES RENDERED B Y THE CONCERNED COMMISSION AGENTS TO JUSTIFY THE PAYMENT OF COMMISSION AMOUNTI NG TO RS. 3,92,193/-. THE ONUS IN THIS REGARD WAS ON THE ASSESSEE TO SUPPORT AND SUBSTANTIATE ITS CLAIM FOR EXPENDITURE ON SALES COMMISSION ON EVIDENCE AND HAV ING FAILED TO DISCHARGE THE SAME IN SPITE OF SUFFICIENT OPPORTUNITY HAVING BEEN AFFORDED TO IT, WE ARE OF THE VIEW THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION O N ACCOUNT OF EXPENDITURE ON SALES COMMISSION CANNOT BE ALLOWED AS RIGHTLY HELD BY THE AUTHORITIES BELOW. WE, THEREFORE, FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LEARNED CIT(A) CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SALES COMMISSION AND UPHOLDING THE SAME , WE DISMISS THIS APPEAL FILED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF APRIL, 2011. SD. SD. (ASHA VIJAYARAGHAVAN) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED THE 27 TH APRIL, 2011. KN ITA NO.1253/M/2010 M/S. ESBEE MACHINERY PVT. LTD. 4 COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT-10, MUMBAI. 4. THE CIT(A)-22, MUMBAI 5. THE DR E BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, MUMBAI