ACIT 10(1), MUMBAI V. ANATEK SERVICES P LTD, MUMBAI

ITA 1345/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3785 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 18-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOMANATH S UKKALI
• Keywords: Business expenditure; Additional evidence
• Section: 142(1); 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , !' , # , $ BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER / I .T.A. NO.1345/MUM/2013 ( # % &% / ASSESSMENT YEAR: 2009-10) DY. COMMISSIONER OF INCOME TAX 10(1) 455, AAYAKAR BHAVAN, 4 TH FLOOR, M. K. MARG, MUMBAI - 400020 / VS. M/S. ANATEK SERVICES PVT. LTD. 8, VALMIKI APARTMENTS, CST ROAD, KALINA, SANTACRUZ (E), MUMBAI - 400098 ./ ./ PAN/GIR NO. : AAACA9079Q ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI HARIDAS BHAT DEPARTMENT BY: SHRI SOMANATH S. UKKALI / DATE OF HEARING: 14.01.2016 /DATE OF PRONOUNCEMENT: 11.05.2016 ! / O R D E R PER AMARJIT SINGH, JM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 07.11.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-21, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RE LEVANT TO THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE FILED THE RETURN OF INCOME ON 23.09 .2009 DECLARING TOTAL INCOME TO THE TUNE OF RS.1,96,43,420/-. THE RETURN WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). THE CASE ITA NO.1345/MUM/2013 ASSESSMENT YEAR: 2009-10 2 WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 24.08.2010, WHICH WAS DULY SERVED UPON TH E ASSESSEE. SUBSEQUENTLY, NOTICES U/S. 142(1) OF THE ACT ALONG WITH A QUESTIONNAIRE WAS ISSUED AND SERVED UPON THE ASSESSEE. THE ASSES SEE PAID CERTAIN COMMISSION TO THE DIFFERENT PARTIES. THE CONFIRMAT ION OF THE COMMISSION PAID TO THE TUNE OF RS.30,06,856/- WAS N OT RECEIVED THEREFORE THE ASSESSING OFFICER DISALLOWED THE SAID COMMISSION AND ADDED TO THE INCOME OF THE ASSESSEE. SUBSEQUENTLY THE ASSESSEE FILED AN APPEAL BEFORE THE LEARNED CIT(A) AND THE LEARNED CI T(A) ALLOWED THE APPEAL OF THE ASSESSEE AND ALLOWED THE SAID COMMISS ION THEREFORE THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE RECORD CAREFULLY. THE SOLE POINT WHICH HAS BEEN ARGUED BEFORE US IS T HAT THE LEARNED CIT(A) HAS WRONGLY ALLOWED THE COMMISSION WHICH IS BASED ON NON- ESTABLISHING EXIGENCY / NEXUS WITH BUSINESS. THE A SSESSEE COMPANY IS A PRIVATE LIMITED COMPANY DEALING IN SALE AND SERVICE OF ANALYTICAL INSTRUMENTS AND APPARATUS. THE COMPANY HAD INCURRE D VARIOUS BUSINESS EXPENSES DURING THE YEAR. THE ASSESSING OFFICER SO UGHT THE CONFIRMATION REGARDING COMMISSION EXPENDITURE INCUR RED BY THE APPELLANT DURING THE YEAR. CERTAIN CONFIRMATIONS W ERE ALSO RECEIVED U/S.133(6) OF THE ACT BUT THE ASSESSING OFFICER FAI LED TO RECEIVED THE CONFIRMATION WITH REGARD TO THE SOME CONTENTIONS. THE NAME OF THE PARTIES ARE HEREBY MENTIONED BELOW:- ITA NO.1345/MUM/2013 ASSESSMENT YEAR: 2009-10 3 NAME OF THE PARTY AMOUNT IN RS. CONFIRMATION GIVEN OR NOT M/S. DEEKSHA INSTRUMENTS 33,52,385 YES SHRI CHINMAY MALWE 2,22,964 NO MS. BHUVANESHWARI 1,11,483 NO MS. S. LAKSHMI 1,22,660 YES MS. BHAGVATI 3,00,000 NO SHRI T. RAMESH 81,625 YES SHRI NEMADE 55,741 NO M/S. AIC TECHNOLOGIES 25,00,000 YES HOWEVER, THE ASSESSEE FAILED TO GIVE THE RATE OF CO MMISSION. TO VERIFY THE DETAILS GIVEN BY THE ASSESSEE NOTICE U/S.133(6) WAS SENT TO M/S. DEEKSHA INSTRUMENTS CORPORATION WAS RECEIVED CONFIR MING THE PAYMENT. HOWEVER, THE REPLY OF M/S. AIC TECHNOLOGIES WAS NOT RECEIVED. THEREFORE, IT IS ESTABLISHED THAT THE ASSESSEE HAS SHOWN CERTAIN BOGUS PAYMENTS ON ACCOUNT OF COMMISSION EXPENSES. OUT OF THE TOTAL COMMISSION EXPENSE OF RS.58,52,385/- FOR WHICH NOTI CE U/S.133(6) WAS SENT THE COMMISSION EXPENSES OF RS.25,00,000/- WERE FOUND TO BE BOGUS. THEREFORE, OUT OF TOTAL COMMISSION EXPENSES OF RS.70,38,912/- AN AMOUNT OF RS.30,06,856/- IS DISALLOWED. THEREA FTER, APPEAL WAS FILED AND DURING THE APPELLATE PROCEEDINGS THE ASSESSEE F URNISHED THE CONFIRMATION OF M/S. AIC TECHNOLOGIES TO THE ASSESS ING OFFICER AND ALSO SUBMITTED THE LETTER OF POSTAL AUTHORITIES, TD S CERTIFICATED OF M/S. AIC TECHNOLOGIES, RETURN OF INCOME OF M/S. AIC TECH NOLOGIES AND STATEMENT OF ACCOUNT IN HIS ACCOUNTS FOR M/S. AIC T ECHNOLOGIES. THE LEARNED CIT(A) SOUGHT THE REMAND REPORT IN VIEW OF THE ADDITIONAL EVIDENCE FURNISHED BY THE APPELLANT. HOWEVER, THE ASSESSING OFFICER ITA NO.1345/MUM/2013 ASSESSMENT YEAR: 2009-10 4 WAS OF THE VIEW THAT THE ADDITIONAL EVIDENCE WAS NO T LIABLE TO BE CONSIDERED. IN VIEW OF THE ADDITIONAL EVIDENCE ADD UCED BY THE ASSESSEE THE LEARNED CIT(A) ALLOWED THE COMMISSION AND DELET ED THE DEMAND. THE FINDING OF THE LEARNED CIT(A) IS HEREBY MENTION ED BELOW FOR READY REFERENCE:- I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF T HE CASE. THE APPELLANT HAS INCURRED AND PAID THE COMMISSION PAYM ENT DURING THE YEAR. THE A.O. DISALLOWED CERTAIN PART OF THE COMMISSION EXPENSES AS CONFIRMATION WAS NOT RECEIVED. IN THE INTEREST OF JUSTICE AND IT IS ALSO MAIN EVIDENCE REQUIRED FOR T HE APPELLATE PROCEEDINGS FOR DECIDING THE APPEAL, I ADMIT THE AD DITIONAL EVIDENCE OF THE APPELLANT THOUGH THESE ARE ALL IN T HE NATURE OF PUBLIC RECORDS. THE EVIDENCES FILED I.E. TDS PAYME NTS, RETURN OF INCOME, POSTAL LETTER OF M/S. AIC TECHNOLOGIES ARE PUBLIC RECORDS, SO I AM ACCEPTING THE EVIDENCE OF THE APPELLANT. A FTER EXAMINATION OF THE APPELLANTS EVIDENCE IT IS UNDIS PUTED FACT THAT TDS WAS DEDUCTED FROM M/S. AIC TECHNOLOGIES AND SAM E WAS PAID TO THE GOVERNMENT ACCOUNT WHICH CAN BE CLEARLY VERIFIED FROM THE INCOME-TAX DEPARTMENTS COMPUTER NET WORK. SIMILARLY IN THE CASE OF SHRI CHINMAY MALWE, MS. BHUVANESHWAR I, MS. BHAGVATI, SHRI NEMADE THE APPELLANT HAD FILED THE T DS CERTIFICATES, THE PAYMENT ON WHICH ARE AVAILABLE IN THE INCOME TAX DEPARTMENTS COMPUTER NET WORK. AFTER CONSIDER ING ALL THE ABOVE EVIDENCES, IT IS CLEAR THAT APPELLANT HAS DED UCTED TAX FOR THE COMMISSION PAYMENTS AND ESPECIALLY IN THE CASE OF M /S. AIC ITA NO.1345/MUM/2013 ASSESSMENT YEAR: 2009-10 5 TECHNOLOGIES THEY HAVE FILED THE RETURN OF INCOME A ND ALSO SUBMITTED THE POSTAL AUTHORITY LETTER. POSTAL AUTH ORITIES WHICH IS A GOVERNMENT DEPARTMENT LETTER ON M/S. AIC TECHNOLOGI ES LETTER CANNOT BE IGNORED. TDS CERTIFICATE ISSUED TO M/S. AIC TECHNOLOGIES, ON THE COMMISSION PAYMENT TDS IS DEDU CTED AND PAID, PROOF AVAILABLE IN THE INCOME TAX COMPUTER RE CORD CANNOT BE IGNORED. SIMILARLY RETURN FILED BY M/S. AIC TECHNO LOGIES SHOWS THAT ON THE COMMISSION RECEIVED BY M/S. AIC TECHNOL OGIES AS INCOME, TDS DEDUCTED. THIS INCOME IS ACCOUNTED AT I NCOME TAX DEPARTMENT BY FILLING THE RETURN OF INCOME BY M/S. AIC TECHNOLOGIES. HENCE COMMISSION FOR WHICH TDS CERTI FICATE WERE FURNISHED CANNOT BE TREATED AS BOGUS. IN VIEW OF T HE ABOVE RECORDED EVIDENCES AVAILABLE IN THE PUBLIC RECORDS, THE A.O.S ADDITION FOR DISALLOWANCE OF COMMISSION IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 3.2 HOWEVER, THE ASSESSEE ALSO FURNISHED THE ABOVE SAID EVIDENCE BEFORE US SUCH AS REMAND REPORT, CONFIRMATION OF MS / AIC TECHNOLOGIES, TDS CERTIFICATED OF M/S. AIC TECHNOL OGIES, REPLY TO THE NOTICE U/S. 133(6) OF THE ACT, THE CONFIRMATION AND COPY OF DELIVERY SHEET FROM THE POST OFFICE DEPARTMENT. THERE ARE TH E DOCUMENTS ON THE BASIS OF WHICH THE CLAIM OF ASSESSEE WAS ALLOWED. WHY THESE DOCUMENTS SHOULD NOT BE RELIED UPON IS NOT ON RECOR D. THERE IS NOTHING ON RECORD THAT THESE DOCUMENTS ARE FALSE AND FARIVO LOUS NOTHING CAME INTO THE NOTICE AS TO WHY THE CLAIM OF THE ASSESSEE SHOULD NOT BE ADMITTED. NO MATERIAL HAS BEEN PRODUCED BEFORE US TO FALSIFY THE CASE OF ITA NO.1345/MUM/2013 ASSESSMENT YEAR: 2009-10 6 THE ASSESSEE. THEREFORE IN VIEW OF THE SAID CIRCUM STANCES THAT THE LEARNED CIT(A) HAS DECIDED THE MATTER OF CONTROVERS Y JUDICIOUSLY AND CORRECTLY WHICH DOES NOT REQUIRE TO BE INTERFERENCE AT THIS APPELLATE STAGE. 6. IN RESULT THE APPEAL OF THE REVENUE IS HEREBY DI SMISSED ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MAY, 2016 SD/- SD/- (B.R.BASKARAN) (AMARJIT SINGH) / ACCOUNTANT MEMBER #$ /JUDICIAL MEMBER % & MUMBAI; ' DATED : 11 TH MAY, 2016 MP MP MP MP ' ( )# !* +*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ( ) / THE CIT(A)- 4. ( / CIT 5. )*+ $$,- , ,- , % & / DR, ITAT, MUMBAI 6. +./ 0 / GUARD FILE. ' / BY ORDER, ) $ //TRUE COPY// , / ' (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI