The ACIT, Circle-6, Surat V. Shri Jitendra B.Surti, Surat

ITA 1540/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9282 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 12-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: S N DIVETIA
• Keywords: Search and seizure
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE S/SHRI S. S. GODARA, JM, & MANISH BORAD, AM. ITA NO.1540/AHD/2012 ASST. YEAR: 2009-10 ACIT, CIRCLE-6, SURAT. VS. SHRI JITENDRA B. SURTI, 133, JALARAM STREET , RAJGARI, TA. CHORYASI, SURAT. APPELLANT RESPONDENT PAN BBRPS 1648R APPELLANT BY SHRI NARENDRA SINGH, SR.DR RESPONDENT BY SHRI S. N. DIVETIA, AR DATE OF HEARING: 12/1/2016 DATE OF PRONOUNCEMENT: 8/03/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL OF REVENUE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(A) DATED 30.3.3012 IN APPEAL NO.CAS-IV/274/11-1 2. ASSESSMENT WAS FRAMED U/S 143(3) OF THE IT ACT, 1961 (IN SHORT THE ACT) ON 30.12.2011 FOR ASST. YEAR 2009-10 BY DCIT, CIRCLE-6 , SURAT. THE REVENUE HAS FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 90,00,000/-- MADE IN RESPECT OF COMMISSION PAID BY THE ASSESSEE TO THE FARMERS. ITA NO. 1540/AHD/2012 ASST. YEAR 2009-10 2 2. THE CIT(A) HAS NOT APPRECIATED THE FACT FI NDINGS AND INVESTIGATIONS DONE BY THE A.O. FOR DISALLOWANCE OF COMMISSION EXP ENSES OF RS.90,00,000/-. 3.. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A), SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD.CIT(A)-IV, SURAT MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER'S OR DER MAY BE RESTORED. 2. BRIEFLY STATED FACTS OF THE CASE AS CULLED FROM THE RECORD ARE THAT THE ASSESSEE IS AN INDIVIDUAL CARRYING ON THE BUSINESS OF BROKERAGE, COMMISSION AGENT, LAND PURCHASING AND SE LLING UNDER THE SOLE PROPRIETARY CONCERN M/S KHUSHBOO CONSULTANCY AND FILED HIS RETURN OF INCOME FOR ASST. YEAR 2009-10 DECLARING T OTAL INCOME AT RS.56,39,580/-. CASE WAS SELECTED FOR SCRUTINY ASSE SSMENT THROUGH CASS. NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 14 .9.2010 AND SUBSEQUENTLY NOTICE U/S 142(1) OF THE ACT WAS ISSUE D ALONG WITH QUESTIONNAIRE ON 31.01.2011. DURING THE COURSE OF A SSESSMENT PROCEEDINGS ON PERUSAL OF PROFIT AND LOSS ACCOUNT O F THE ASSESSEE LD. ASSESSING OFFICER NOTICED THAT ASSESSEE HAS EARNED CONSULTANCY FEES OF RS.1,50,00,000/- AND HAS CLAIMED COMMISSION EXPE NSES OF RS.90,00,000/-. ON ENQUIRY ABOUT THE DETAILS OF CLA IM TOWARDS COMMISSION PAID, PAN AND SERVICE RENDERED BY THE PE RSONS TO WHOM THE ASSESSEE HAS PAID COMMISSION OF RS.90,00,000/- ASSESSEE FURNISHED FOLLOWING DETAILS- 'DURING THE ASSESSMENT YEAR M/S. ESSAR LIMITED AND FARMER HAS DISPUTE ABOUT LAND ACQUISITION AND LAND PRICE. DURI NG THE COURSE OF DISPUTES ALL FARMER HAS APPOINTED MR. JITENDRABHA I SURF/ FOR REPRESENTING THEMSELVES AGAINST ESSAR LIMITED FOR PRICES NEGOTIATION. FOR THAT MR. JITENDRABHAI SURF./ WAS UNABLE TO AFFORD THE COST OF ITA NO. 1540/AHD/2012 ASST. YEAR 2009-10 3 DEFENDING THE CASE. HENCE, HE HAS TAKEN FEES FROM T HE FARMER AMOUNTING TO RS.30,000/- EACH. TOTAL AMOUNT COMES TO RS.9,00,000/- WITH AGREEMENT. ASSESSEE HAS NEGOTIATED LAND PRICE WITH ESSAR LIMITED AND HE WON THE REPRESENTATION AND GOT 1.5 CRORE FRO M ESSAR LIMITED AS NEGOTIATED LAND PRICE AND ASSESSEE PASS ON SAID MON EY TO ALL 30 FARMER AS AGREEMENT MADE BY THE ASSESSEE WITH FARMER THAT AMOUNT WAS RS.3,00,000/- EACH TOTAL COMES TO RS.90 LAC. THE AMOUNT RECEIVED BY THE ASSESSEE IS NOT INCOME OF THE ASSESSEE BUT PART AMOUNT WOULD HAVE TO PASS TO THE FARMERS AS AGREED BY THEM.' THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE RE PLY OF THE ASSESSEE AND WAS OF THE VIEW THAT NO SUCH SERVICES WERE RENDERED BY THE FARMERS TO WHOM COMMISSION HAVE BEEN PAID AN D THE TRANSACTION OF PAYMENT OF RS.90,00,000/- HAS BEEN M ADE JUST FOR THE PURPOSE OF TAX EVASION AS ALL THE 30 FARMERS HAVE F ILED THEIR RETURN OF INCOME SHOWING AN AMOUNT RECEIVED FROM ASSESSEE AND CLAIMING EXPENDITURE AGAINST THE COMMISSION INCOME AND PAID A MEAGER AMOUNT OF TAX AND THEREFORE, DISALLOWED THE EXPENDI TURE OF COMMISSION OF RS.90,00,000/- AND ADDED BACK TO THE INCOME OF THE ASSESSEE AND ASSESSED INCOME RS.1,46,39,580/-. 3. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. CI T(A) WHO HAS ALLOWED THE APPEAL OF ASSESSEE BY OBSERVING AS UNDE R :- 7. I HAVE GONE THROUGH THE FACTS OF THE CASE. LOOKING TO THE TOTAL ITY OF THE FACTS & CIRCUMSTANCES OF THIS CASE, I AM OF THE OPINION T HAT THE A.O. HAS PROCEEDED ON WRONG ASSUMPTIONS. AT THE SAME TIME, IT IS ALSO TO BE SAID THAT THE ASSESSEE HAS NOT PRESENTED HIS ACCOUNTS IN THE MANNER IT SHO ULD HAVE BEEN, LEADING TO THESE ASSUMPTIONS AND CONSEQUENT MISINTERPRETATIONS . THE PURPOSE OF THE ASSESSMENT IS TO DETERMINE THE CORRECT INCOME OF TH E APPELLANT. THE APPELLANT HAD RECEIVED RS. 1,50,00,000/- ON BEHALF OF THE FAR MERS WHOM HE REPRESENTED IN THE DISPUTE AND NEGOTIATIONS WITH M/S ESSAR STEELS LTD. THIS MONEY WAS PAID TOWARDS LEGAL COSTS INCURRED BY THE FARMERS IN THEI R FIGHT AGAINST M/S ESSAR STEELS LTD. AND OTHER AGENCIES, HI AND OUTSIDE THE COURTS. THE MONEY THEREFORE ITA NO. 1540/AHD/2012 ASST. YEAR 2009-10 4 BELONGED TO THE FARMERS. THIS FACT HAS BEEN RECOGNI ZED BY THE A.O. ALSO IN PARA- 5.4 (III) OF THE ASSESSMENT ORDER. IF THIS FACT IS ACCEPTED THEN THERE IS NO QUESTION OF ANY DISALLOWANCE AS ONLY THE NET AMOUNT WHICH RE MAINED WITH THE ASSESSEE WAS HIS INCOME LEFT TO HIM FOR HIS SERVICES BY THE FANNERS WHO HAD ENGAGED HIM TO REPRESENT THEM IN THE LEGAL CASES IN THE LAND AC QUISITION DISPUTE AND PRICE DISPUTE. THIS SIMPLE FACT HAS BEEN MIS-REPRESENTED IN THE ACCOUNTS PREPARED AND SUBMITTED BY THE APPELLANT, MAY BE ON THE ADVICE OF CONSULTANTS, BY TREATING THE FULL AMOUNT OF RS. 1,50,00,000/- AS CONSULTATION FE ES AND PAYMENT TO FARMERS AS COMMISSION. THE A.O. ON HIS PART HAS GONE STRICTLY BY THE NOMENCLATURE USED IN THE ACCOUNTS, ALTHOUGH HE HAS HIMSELF QUESTIONED TH E RIGHT OF THE ASSESSEE TO THE OWNERSHIP OF THESE FUNDS RECEIVED ON BEHALF OF THE FARMERS AS LEGAL COSTS, AND DISALLOWED THE PAYMENTS TO FARMERS. THE MISREPRESEN TATION AND CONSEQUENT MISINTERPRETATION ARE A RESULT OF THE FUNDS BEING R ECEIVED IN THE ACCOUNTS OF THE ASSESSEE AS A REPRESENTATIVE OF THE LITIGANTS AND I TS SUBSEQUENT DISTRIBUTION RATHER THAN THE OTHER WAY ROUND, I.E. FUNDS BEING R ECEIVED BY THE FARMERS AND THEN COMING TO THE APPELLANT. THE REAL INCOME OF TH E APPELLANT IS WHAT REMAINED WITH HIM OUT OF THE LEGAL COSTS RECEIVED, I.E. NET AMOUNT AFTER PAYMENT TO FARMERS. THEREFORE NO ADDITION ON ACCOUNT OF DISALLOWANCE OF PAYMENTS MADE TO FARMERS AND REPRESENTED AS 'COMMISSION' IN THE ACCO UNTS WAS REQUIRED. THE ADDITION MADE IS DELETED. 7.1 THERE ARE CERTAIN FACTUAL ERRORS IN THE ASSESSMENT ORDER WHICH MAY HA VE INFLUENCED THE CONCLUSIONS OF THE A.O. THE A.O. WAS GUIDED BY THE FACT THAT THE AGREEMENT BETWEEN THE FARMERS AND THE ASSESSEE HI A UGUST, 2008 WAS ENTERED INTO WHEN THE MATTER BETWEEN THE FARMERS AND THE ACQUIRI NG COMPANY WAS NEARLY SETTLED AS THE FINAL ORDERS CAME ON 30.01.2009. THI S IS FACTUALLY INCORRECT AS THE ORDER OF THE HON'BLE SUPREME COURT DATED 30.01.2009 WAS FOR THE LITIGATING PARTIES TO SETTLE THE DISPUTE WITH THE HELP OF THE GUJARAT HIGH COURT MEDIATION CENTRE, THE SETTLEMENT WAS REACHED WITH THE HELP OF MEDIATION C ENTRE AFTER SEVERAL NEGOTIATIONS ON 19.03.2009. THIS SETTLEMENT WAS LAT ER CONFIRMED BY THE HON'BLE SUPREME COURT ON 27.03.2009 AS AN OUT OF COURT SETT LEMENT. AGAIN, THE FACT OF LETTER DATED 09.12.2011 REQUIRING PRESENCE OF THE F ARMERS ON 16.12.2011 BEING RECEIVED LATE WAS BROUGHT TO THE NOTICE OF THE A.O. VIDE LETTER DATED 20.12.2011 BUT DOES NOT FIND MENTION IN THE ASSESSMENT ORDER. VIDE THE SAID LETTER THE A.O. WAS INFORMED THAT ONE OF THE PERSONS SUMMONED, MR. DAHY ABHAI GOVINDBHAI PATEL, HAD EXPIRED AND THAT THE OTHER PERSON, SHRI CHAMPAK BHAI NARSIBHAI PATEL, HAD RECEIVED THE SUMMONS AFTER THE DATE MENTIONED IN TH E SUMMONS. FURTHER, THE A.O. HAS RELIED HEAVILY ON THE FACT THAT ALL THE FARMERS HAD OBTAINED PAN AND FILED THEIR RETURNS, WHICH WERE SIMILAR IN NATURE TO ONE ANOTHE R, ALMOST AT THE SAME TIME AND THAT MONEY WAS WITHDRAWN BY THE FANNERS IN CASH AND BY TRANSFER HI SIMILAR FASHION ON THE SAME DAY AS IT WAS TRANSFERRED TO TH EIR ACCOUNTS, TO HOLD THAT THE TRANSACTION WAS NOT GENUINE. THE SAID CONCLUSION IS BASED ONLY ON ASSUMPTION ON ITA NO. 1540/AHD/2012 ASST. YEAR 2009-10 5 THE PART OF THE A.O. THE RECEIPT OF PAYMENT FROM TH E ASSESSEE HAS BEEN CONFIRMED BY THE FARMERS AND HAS BEEN OFFERED IN THEIR RETURN S. FARMERS WHO HAVE BEEN INVOLVED IN LITIGATION AS A GROUP WOULD NORMALLY AC T TOGETHER AND THEREFORE NO ADVERSE INFERENCE AGAINST THE APPELLANT CAN BE DRAW N SIMPLY FROM THE FACT THAT THE FARMERS HAVE ACTED IN A SIMILAR MANNER. THE A.O. OU GHT TO HAVE INVESTIGATED, AT LEAST, THE DESTINATION OF THE DEBIT IN THE BANK ACC OUNT BY WAY OF TRANSFER BEFORE CONCLUDING THAT THE PAYMENTS WERE NOT GENUINE. SIMI LARLY, TAXABILITY IN THE HANDS OF THE FARMERS OF ANY EXCESS OF LEGAL COSTS RECEIVE D BY THEM WILL NOT AFFECT THE INCOME IN THE HANDS OF THE ASSESSEE. IF AT ALL ANY ACTION WAS REQUIRED, REGARDING EXCESS COMPENSATION RECEIVED OR CLAIM OF EXPENSES A GAINST SUCH INCOME, IT WAS IN THE HANDS OF THE FARMERS. I AM AFRAID, THE REASONS GIVEN BY THE A.O. TO ARRIVE AT THE CONCLUSION THAT COMMISSION PAYMENTS WERE NOT GENUIN E ARE NOT SUPPORTED BY ANY EVIDENCE. I HAVE FOR THE REASONS GIVEN IN THE EARLI ER PART OF MY DECISION HELD THAT THERE WAS NO REQUIREMENT FOR ANY DISALLOWANCE ON TH E PART OF THE A.O. AS THERE IS NO REASON TO CONCLUDE THAT THE TRANSACTION OF PAYME NT TO FARMERS WAS NOT GENUINE, NO DISALLOWANCE CAN BE MADE ON GROUNDS OF GENUINENE SS. THE ADDITION MADE IS DELETED. 4. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE THE T RIBUNAL. 5. LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSEE HAS RECEIVED A SUM OF RS.1.5 CROR ES FROM ESSAR STEEL LTD. FOR FILING LEGAL SUIT ON BEHALF OF THE F ARMERS BUT IN FACT HE HAS NOT APPEARED FOR ANY HEARING RATHER MR. SHARVIL MAJUMDAR, ADVOCATE ATTENDED THE HEARING OF THE LAND OWNERS AN D NO SUCH AGREEMENT WAS ENTERED INTO BETWEEN THE ASSESSEE AND THE FARMERS FOR PROVIDING ANY SERVICES IN RELATION TO COMMISSIO N AND, THEREFORE, LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF COMMISSION EXPENSES OF RS.90,00,000 /-. 6. ON THE OTHER HAND, LD. AR RELIED ON THE ORDER OF LD. CIT(A) AND ALSO SUBMITTED THAT ASSESSEE HAS BEEN ABLE TO EARN GROSS RECEIPT OF RS.1.5 CRORES ONLY WITH THE HELP OF 30 FARMERS WHO HAVE CONTRIBUTED RS.30,000/- EACH AGGREGATING RS.9,00,000/- AND PAID THE SAME TO ITA NO. 1540/AHD/2012 ASST. YEAR 2009-10 6 ASSESSEE WITH THE HELP OF WHICH HE WAS ABLE TO CARR Y ON LEGAL SUIT TO ITS FINALITY AND WAS ABLE TO RECOVER MAXIMUM COST I N RELATION TO DISPUTES FOR ACQUISITION OF LAND IN BETWEEN ESSAR S TEEL LTD. AND FARMERS AND THEREFORE, LD. CIT(A) HAS RIGHTLY DELET ED THE ADDITION. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. REVENUE HAS RAISED FOUR GROUNDS OF APPEA L OUT OF WHICH GROUND NO.3 & 4 ARE OF GENERAL NATURE AND GROUND NO .1 & 2 ARE ON A COMMON ISSUE AGAINST THE ACTION OF LD. CIT(A) IN DE LETING THE ADDITION OF RS.90 LACS CLAIMED BY THE ASSESSEE AS COMMISSION EXPENSES SHOWN IN HIS PROFIT AND LOSS ACCOUNT. FROM GOING TH ROUGH THE SUBMISSIONS OF ASSESSEE AS WELL AS THE OBSERVATIONS MADE BY LD. ASSESSING OFFICER, WE FIND THAT ESSAR STEEL LTD. AC QUIRED LAND SITUATED AT VILLAGE HAZIRA, TAL. CHAURASI, DIST. SURAT FROM THE FARMERS OF THAT VILLAGE FOR ITS EXTENSION PURPOSES. THE DISPUTE ARO SE BETWEEN THE FARMERS AND ESSAR STEEL LTD. THE ABOVE DISPUTE WENT UPTO THE HON. SUPREME COURT AND THE HON. SUPREME COURT REFERRED THE MATTER TO THE GUJARAT HIGH COURT MEDIATION CENTRE WHICH PASSE D ITS ORDER ON 30.1.2009 DIRECTING THE COMPANY TO PAY A LUMP SUM A MOUNT OF RS.1.5 CRORES TOWARDS COST OF THE CASE OF LAND OWNERS JOIN TLY IN THE NAME OF ASSESSEE I.S SHRI JITENDRABHAI BALUBHAI SURTI. THE REASON OF PAYMENT MADE ONLY TO JITENDRABHAI BALUBHAI SURTI BY ESSAR S TEEL LTD. WAS THAT THIRTY FARMERS JOINTLY APPOINTED THE ASSESSEE TO FI GHT THE LEGAL CASE WITH ESSAR STEEL LTD. IN SUPPORT OF ITS CLAIM, ASS ESSEE SUBMITTED BARMOD GRAMPANCHAYET COPY STATING THAT THIRTY FARME RS HAS APPOINTED HIM ON THEIR BEHALF TO FIGHT THE LEGAL SU IT ON 15.8.2008 AND FOR THIS PURPOSE THIRTY FARMERS GAVE RS.30,000/- EA CH AS FINANCIAL ITA NO. 1540/AHD/2012 ASST. YEAR 2009-10 7 SUPPORT TO THE ASSESSEE AGGREGATING TO RS.9,00,000/ - AS ADVANCE TO FIGHT THE LEGAL SUIT. 8. ON THE DIRECTION OF HON. JURISDICATIONAL HIGH CO URT MEDIATION CENTRE ESSAR STEEL LTD. PAID AN AMOUNT OF RS.1.5 CR ORES TO THE ASSESSEE TOWARDS COST OF LITIGATION WHICH WAS MEANT FOR THIRTY FARMERS. ASSESSEE PAID RS.90 LACS BY DIVIDING THE S AME IN BETWEEN 30 FARMERS BY WAY OF GIVING A CHEQUE OF RS.3 LACS T O EACH OF THEM AND CLAIMED THE SAME AS COMMISSION EXPENDITURE AND DECLARED THE REMAINING AMOUNT AFTER CLAIMING CERTAIN OTHER EXPEN DITURE AS HIS INCOME AND FILED RETURN OF INCOME SHOWING INCOME O F RS.56,39,580/- 9. FURTHER FROM GOING THROUGH THE DISCUSSION MADE A BOVE, WE FIND THAT THE AMOUNT PAID BY ESSAR STEEL LTD. TO ASSESSE E WAS COMPOSITE AMOUNT WHICH INCLUDED SOME PORTION TOWARDS THE WORK DONE BY ASSESSEE AND SOME PORTION TOWARDS THE COST INCURRED BY THE FARMERS. FROM THE REVENUE POINT OF VIEW WE OBSERVE THAT OUT OF RS.1.5 CRORES RS.60 LACS HAVE REMAINED WITH THE ASSESSEE AS NET S URPLUS (RS.1.5 CRORES RS.90 LACS) AND THE REMAINING AMOUNT HAVE GONE TO THE FARMERS BY WAY OF ACCOUNT PAYEE CHEQUES OUT OF WHIC H MOST OF THEM HAVE FILED THEIR RETURNS OF INCOME WITH PAN. AT THI S JUNCTURE, WE OBSERVE THAT FARMERS WHO HAVE RECEIVED RS.3 LACS EA CH FROM THE ASSESSEE HAVE SHOWN THE INCOME FROM COMMISSION AT R S.2.70 LACS AND THE REMAINING RS.30,000/- THEY HAVE ADJUSTED AG AINST THE ADVANCE GIVEN BY THEM TO THE ASSESSEE FOR FIGHTING THE LEGAL SUIT WITH ESSAR STEEL LTD. AT THE TIME OF GIVING AUTHORITY TO THE ASSESSEE ON 15.8.2008. THIS MEANS THAT ON ONE HAND ASSESSEE IS SHOWING ITA NO. 1540/AHD/2012 ASST. YEAR 2009-10 8 EXPENSES AT RS.3 LACS EACH AS COMMISSION TO THE FAR MERS WHEREAS IN THE RETURN OF INCOME SUBMITTED BY THE FARMERS THE I NCOME FROM COMMISSION HAS BEEN SHOWN AR RS.2.70 LACS WHICH MEA NS THAT RS.30 THOUSAND EACH WHICH AGGREGATES TO RS.9,00,000/- WHI CH HAS BEEN CLAIMED AS AN EXPENDITURE BY THE ASSESSEE WHICH OUG HT TO HAVE BEEN SHOWN AS INCOME BY THE FARMERS HAVE NOT BEEN SHOWN BY THEM WHICH IS VERIFIABLE FROM THE COPIES OF INCOME-TAX RETURNS IN THE CASE OF 10 TO 12 FARMERS AS MADE AVAILABLE BY THE ASSESSEE DURING THE COURSE OF PROCEEDINGS. THIS FACT HAS NOT BEEN CONTROVERTED BY LD. AR. 10. FROM GOING THROUGH THE ORDER OF LD. CIT(A) WE OBSERVE THAT THE VIEW TAKEN BY HIM IN ALLOWING THE APPEAL OF ASSESSE E IS BY TAKING A BASIS THAT FUNDS OF RS.1.5 CRORES RECEIVED IN THE A CCOUNT OF ASSESSEE WAS IN A CAPACITY OF A REPRESENTATIVE OF THE LITIGA NTS AND AFTER SUBSEQUENT DISTRIBUTION TO THIRTY FARMERS RS.90,00, 000/- LACS THE REMAINING AMOUNT OF RS.60,00,000/- WAS THE REAL INC OME OF THE ASSESSEE FOR TAKING CARE OF LITIGATION PROCEEDING A GAINST ESSAR STEEL LTD. I.E. NET AMOUNT AFTER PAYMENT TO FARMERS AND A S PER OBSERVATIONS OF LD. CIT(A) RS.90,00,000/- WAS NOT COMMISSION BUT THE ASSESSEE HAS RECEIVED ON BEHALF OF THE FARMERS AND THE SAME WAS RETURNED TO THE FARMERS UNDER THE NOMENCLATURE OF COMMISSION. H OWEVER, IN OUR VIEW THE ISSUE NEEDS TO BE ADJUDICATED ON THE BASIS OF ITS DISCLOSURE IN THE INCOME-TAX RETURN AND THE FINANCIAL STATEMEN T OF THE ASSESSEE AND WE UNDERSTAND THAT ASSESSEE HAS SHOWN GROSS REC EIPTS OF RS.1 5 CRORES AND HAS SHOWN COMMISSION EXPENDITURE OF RS.9 0,00,000/-. IN OUR VIEW THE CRUCIAL ASPECT TO EXAMINE HERE IS HOW MUCH AMOUNT HAS BEEN OFFERED TO BE TAXED BEFORE THE REVENUE AUTHORI TIES. WE FIND THAT ITA NO. 1540/AHD/2012 ASST. YEAR 2009-10 9 ASSESSEE HAS SHOWN RS.1.5 CRORES AS RECEIPT OUT OF WHICH AFTER CLAIMING EXPENDITURE OF RS.90,00,000/- REMAINING AM OUNT I.E. RS.60,00,000/- HAS BEEN OFFERED FOR TAXATION BY THE ASSESSEE (ASSESSEE HAS SHOWN INCOME AT RS.56,39,580/- IN THE RETURN OF INCOME AFTER CLAIMING SOME OTHER INCIDENTAL EXPENDI TURE) AND AS REGARDS COMMISSION PAYMENT OF RS.90,00,000/-, A SUM OF RS.81,00,000/- HAS BEEN OFFERED TO TAX BY FARMERS I N THEIR RESPECTIVE INCOME-TAX RETURN AS ACCEPTED BY BOTH THE ASSESSEE AND THE DEPARTMENT AND THE REMAINING AMOUNT OF RS.9,00,000/ - WHICH ASSESSEE HAS CLAIMED AS COMMISSION EXPENDITURE BUT FACTUALLY THE FARMERS OUT OF RS.3,00,000/- RECEIVED BY EACH HAVE CLAIMED RS.30,000/-AS REFUND OF THEIR AMOUNT GIVEN BY THEM TO THE ASSESSEE TOWARDS ADVANCE FOR EXPENSES IN LIEU OF LEGAL SUIT WHICH ASSESSEE HAD TO FIGHT ON BEHALF OF THE FARMERS AGAINST ESSAR STEEL LTD. 11. SUMMARISING THE ISSUE WE FIND THAT ON THE PART OF ASSESSEE THE ONLY CONTROVERSY LEFT IS IN RELATION TO RS.9 LACS O F COMMISSION EXPENSES WHICH HAS NOT BEEN SHOWN AS INCOME BY THE FARMERS AND APART FROM THAT TOTAL RECEIPT FROM ESSAR STEEL LTD. HAS BEEN OFFERED TO TAX EITHER BY THE ASSESSEE OR BY THE FARMERS AND TO THIS EXTENT LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. HOWEVER, O N THE BASIS OF OUR FINDING WE ARE OF THE VIEW THAT ONLY RS.81 LACS SHO ULD HAVE BEEN ALLOWED AS COMMISSION EXPENSES AND RS.9 LACS NEEDS TO BE ADDED BACK TO THE INCOME OF ASSESSEE. ACCORDINGLY WE PART LY ALLOW THE REVENUES APPEAL BY CONFIRMING ADDITION OF RS.9,00, 000/- AS AGAINST RS.90,00,000/- MADE BY LD. ASSESSING OFFICER. ITA NO. 1540/AHD/2012 ASST. YEAR 2009-10 10 11. IN THE RESULT, APPEAL FILED BY THE REVENUE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MARCH, 2016 SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 8/03/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 2/03/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 04/03/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 8/3/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: