Ganga Prasad Goel, Delhi V. JCIT, New Delhi

ITA 1494/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7050 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 08-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 21-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: WAY OF ACCOUNT PAYEE CHEQUE. IT WAS
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 142(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-3, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 1494/DEL/2016 A.Y. : 2011-12 GANGA PRASAD GOEL, AB-36, SHALIMAR BAGH, DELHI 110 088 (PAN: AAHPG2811N) VS. JCIT, RANGE-19, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. V.K. TULSIYAN, CA DEPARTMENT BY : SH. ANIL KUMAR SHARMA, SR. DR ORDER ASSESSEE HAS FILED THIS APPEAL AGAINST THE IMPUGNE D ORDER DATED 30.12.2015 PASSED BY THE LD. CIT(A)-32, NEW DELH I RELEVANT TO ASSESSMENT YEAR 2011-12 ON THE FOLLOWIN G GROUNDS:- 1. FOR THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN DISALLOWING THE COMMI SSION PAID AMOUNTING TO RS. 12,32,000/- TO THE FOLLOWING PERSONS: 2 NAME AMOUNT PAID ASHIMA JAIN 3,00,000/- USHA 1,50,000/- RATNA 2,17,000/- KHUSHBU AGGARWAL 1,75,000/- SAURABH GOEL 2,00,000/- JYOTSNA 1,90,000/- 2. FOR THAT THE LD. CIT(A) IS NOT JUSTIFIED IN PARTL Y CONFIRMING THE ASSESSMENT ORDER OF JOINT COMMISSION ER OF INCOME TAX. 3. FOR THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONF IRMING A SUM OF RS. 25,000/- WHICH WAS A DEBIT NOT ISSUED TO M/S LAXMI FABRICS. 4. FOR THAT THE LD. CIT(A) IS NOT JUSTIFIED IN ADD ING A SUM OF RS. 2,00,000/-, WHICH WAS PAID TO SAURABH GOYAL . THE SAME WAS NOT THE MATTER OF APPEAL AND WAS ALREA DY ALLOWED BY THE JOINT COMMISSIONER OF INCOME TAX IN THE ORIGINAL ASSESSMENT ORDER. 3 5. FOR THAT THE COMMISSION PAID TO SAURABH GOYAL AMOUNTING TO RS. 2,00,000/- WAS DISALLOWED BY MISTAK E. HENCE IT SHOULD BE ALLOWED. 6. FOR THAT THE JOINT COMMISSIONER OF INCOME TAX IS NOT JUSTIFIED IN INITIATING PENALTY PROCEEDINGS U/S. 271 (1) OF THE INCOME TAX ACT, 1961. 7. FOR THAT ANY OTHER GROUNDS OF APPEAL MAY BE ALLO WED TO BE URGED AT THE TIME OF HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FI LED THE RETURN OF INCOME ON 29.7.2011 DECLARING INCOME OF RS. 5,58,670/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. NOTICE U/S. 143(2) OF THE INC OME TAX ACT, 1961 DATED 31.7.2012 WAS ISSUED. AFTER CHANGE OF JURISDICTION, NOTICE U/S. 142(1) OF THE I.T. ACT DATED 27.11.2013 ALONGWITH A QUESTIONNAIRE WAS ISSUED. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF CIVIL C ONSTRUCTION RELATED EQUIPMENTS UNDER THE NAME OF KAMAL ENTERPRI SES. AGAINST THE TURNOVER OF RS. 4,67,70,746/- THE ASSESSE E HAS DECLARED A GROSS PROFIT OF RS. 37,69,204/- GIVING A G P RATE OF 8.06%. FROM THE PERUSAL OF P&L ACCOUNT FURNISHED BY THE 4 ASSESSEE, IT WAS OBSERVED BY THE AO THAT THE ASSESS EE HAS DEBITED COMMISSION EXPENSES AT RS. 17,32,400/-. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF THE PA RTIES TO WHOM THESE COMMISSION EXPENSES WERE DEBITED AND IN RESPONSE THERETO THE ASSESSEE SUBMITTED THE DETAILS AS CALLED FOR. THEREAFTER, THE AO VIDE HIS ORDER DATED 24.2.201 4 PASSED U/S. 143(3) OF THE I.T. ACT, 1961 HAS ASSESSED THE IN COME OF THE ASSESSEE AT RS. 21,76,370/- AND MADE VARIOUS ADD ITIONS. 3. AGAINST THE ORDER OF THE LD. AO, ASSESSEE APPEAL ED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATE D 30.12.2015 HAS PARTLY ALLOWED THE APPEAL OF THE ASS ESSEE. 4. AGGRIEVED WITH THE IMPUGNED ORDER DATED 30.12.20 15 PASSED BY THE LD. CIT(A), ASSESSEE IS IN APPEAL BEF ORE THE TRIBUNAL. 5. WITH REGARD TO GROUND NO. 1 RELATING TO DISALLOWA NCE OF COMMISSION AMOUNTING TO RS. 12,32,000/- IS CONCERNED, LD. COUNSEL OF THE ASSSESSEE STATED THAT AO HAS BRUSH A SIDE / IGNORED THE PLETHORA OF EVIDENCE PRODUCED BEFORE HI M BY THE ASSESSEE. HE FURTHER STATED THAT THE PAYMENT HAS BE EN MADE BY THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUE. I T WAS 5 FURTHER STATED THAT THE EXPENSES INCURRED FOR BUSI NESS PURPOSE ARE ALLOWABLE DEDUCTIONS FROM THE INCOME OF THE ASS ESSEE. THEREFORE, THE COMMISSION PAID MAY BE ALLOWED AND AD DITION IN DISPUTE MAY BE DELETED. 5.1 WITH REGARD TO GROUND NO. 3 RELATING TO ADDITION OF RS. 25,000/-, LD. COUNSEL OF THE ASSESSEE STATED THAT TH E THIS AMOUNT WAS A DEBIT NOT ISSUED TO M/S LAXMI FABRICS AND IS A DIFFERENCE IN THE ACCOUNT OF M/S LAXMI FARBRICS, HE NCE, THE SAME IS LIABLE TO BE DELETED. 5.2 WITH REGARD TO GROUND NO. 4 RELATING TO ADDITIO N OF RS. 2 LACS WHICH WAS PAID TO SAURABH GOYAL. LD. COUNSEL O F THE ASSESSEE STATED THAT THIS ADDITION WAS NOT THE MA TTER OF APPEAL AND WAS ALREADY ALLOWED BY THE AO IN THE ASS ESSMENT ORDER, HENCE, THE SAME MAY BE DELETED. 5.3 LD. COUNSEL OF THE ASSESSEE FURTHER STATED THAT AS REGARDS GROUND NO. 5 RELATING TO ADDITION OF RS. 2 LACS ON A CCOUNT OF COMMISSION PAID TO SAURABH GOYAL WAS DISALLOWED BY MISTAKE, HENCE, THE SAME MAY BE DELETED. 6 6. ON THE OTHER HAND, LD. DR HAS HEAVILY RELIED UP ON THE ORDER OF THE AUTHORITIES BELOW. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. AS REGARDS GROUND NO. 1 IS CONCERNED, I FIND THAT T HE PAYMENT OF COMMISSION HAS BEEN MADE BY THE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUE AND EXPENSES INCURRED FOR BUS INESS PURPOSE, HENCE, THE SAME ARE GENUINE AND ACCORDINGLY ALLOWED. 7.1 WITH REGARD TO GROUND NO. 3 RELATING TO ADDITION OF RS. 25,000/-, I FIND THAT THIS AMOUNT WAS A DEBIT NOT IS SUED TO M/S LAXMI FABRICS AND IS A DIFFERENCE IN THE ACCOUNT OF M/S LAXMI FARBRICS. THEREFORE, THE SAME IS DELETED. 7.2 WITH REGARD TO GROUND NO. 4 & 5 RELATING TO ADD ITION OF RS. 2 LACS WHICH WAS PAID TO SAURABH GOYAL. I FIND CONSIDERABLE COGENCY IN THE ASSESSEES COUNSEL CON TENTION THAT THIS ADDITION WAS NOT THE MATTER OF APPEAL AND WAS ALREADY ALLOWED BY THE AO IN THE ASSESSMENT ORDER, I FIND TH AT THE SAME WAS ALLOWED BY AO VIDE PARA NO. 3. ACCORDING TO AO ORDER TOTAL COMMISSION EXPENSES WAS RS. 17,32,400/-, B UT AO DISALLOWED ONLY RS. 15,32,400/- AND HAS GIVEN THE RE LIEF TO 7 ASSESSEE FOR RS. 2 LACS ONLY. HOWEVER, LD. CIT(A) WRO NGLY ADDED THE SAME, HENCE, THE SAME IS DELETED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/01/2017. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 09/01/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 8