Carbon Steel (India) Agency, Kolkata V. ITO, Ward - 34(3), Kolkata, Kolkata

ITA 176/KOL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91894 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 31-01-2011
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRABORTY SR DR
• Assessee Lawyers: L P SHARMA
• Keywords: Business expenditure; Opportunity of being heard; Opportunity of cross examination
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM ] I.T.A NO. 176 /KOL/201 1 ASSESSMENT YEAR : 200 5 - 06 CARBON STEEL (INDIA) AGENCY VS. INCOME - TAX OFFICER, WD - 34 (3), KOLKATA (PAN: A A D FC6914E ) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 1 0 .0 4 .2015 DATE OF PRONOUNCEMENT: 1 0 . 04 . 2015 FOR THE APPELLANT: SHRI L. P. SHARMA, ADVOCATE FOR THE RESPONDENT: S HRI P. K. CHAKRABORTY , SR. DR , JCIT ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT (A) - XX , KOLKATA IN APPEAL NO. 444 /CIT(A) - XX/WD. - 34 (3) /07 - 08/KOL DATED 1 6 . 11 .201 0 . ASSESSMENT WAS FRAMED BY ITO, WARD - 34 ( 3 ) , KOLKATA U/S. 14 3(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR ASSESSMENT YEAR 200 5 - 06 VIDE HIS ORDER DATED 28 .12.20 07 . 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE OF COMMISSION OF RS.6,25,359/ - ON SALE OF IRON AND STEEL MATERI AL. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE CLAIMED COMMISSION PAID AT RS.7,07,718/ - TO TEN COMMISSION AGENTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO REQUIRED THE ASSESSEE TO FILE THE DETAIL S OF COMMISSION PAID AND DOCUMENTARY EVIDENCE S THAT ACTUAL SERVICES WERE RENDERED BY THE COMMISSION AGENTS. THE ASSESSEE PRODUCED THREE COMMISSION AGENTS. IN COMPLIANCE TO SUMMONS U/S. 131 OF THE ACT, SIX COMMISSI ON AGENTS APPEARED AND THEIR STATEMENTS WERE ALSO RECORDED. EIGHT COMMISSION AGENTS ADMITTED THAT THEY HAVE NOT RENDERED ANY SERVICE OR BILL RAISED BY THEM W AS NOT GENUINE. ONE COMMISSION AGENT BEAUTIFUL HOMES & APARTMENTS PVT. LTD. DID NOT APPEAR AS THE SUMMON U/S. 131 OF THE ACT COULD NOT BE SERVED AT THE GIVEN ADDRESS. THE AO CONCLUDED NO SERVICES WERE RENDERED BY THE COMMISSION AGENT TO JUSTIFY THE CLAIM OF COMMISSION AND ACCORDINGLY, DISALLOWED THE COMMISSION IN RESPECT TO NINE COMMISSION AGENTS AT RS.6,25,359/ - . AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO CONFIRMED THE ACTION OF AO BY OBSERVING AS UNDER: 2 ITA NO. 176 /K/201 1 CARBON STEEL (INDIA) AGENCY AY 200 5 - 06 I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND FROM THE ASSESSMENT ORDER THAT THE COMMISSION AGENTS HAVE CATEGORICALLY ADMITTED BE FORE THE AO THAT NO SERVICES WERE RENDERED BY THEM, AND, THAT BILLS WERE RAISED ONLY AT THE INSTANCE OF THE APPELLANT. THERE IS NO SUBSTANCE IN THE ARGUMENT THAT BILLS WERE RAISED BY THE COMMISSION AGENTS OR THAT PAYMENTS WERE MADE THROUGH BANKING CHANNEL . ONCE IT IS ESTABLISHED THAT NO SERVICES WERE RENDERED, CLAIM OF COMMISSION IS NOT ALLOWABLE AS BUSINESS EXPENDITURE. THE AO HAS CLEARLY MENTIONED IN THE ASSESSMENT ORDER THAT COPY OF STATEMENTS RECORDED U/S. 131 WAS CONFRONTED TO THE APPELLANT. THE ST ATEMENTS WERE RECORDED IN THE PRESENCE OF APPELLANT S AR WHO WAS ALSO ALLOWED OPPORTUNITY FOR CROSS - EXAMINATION BUT THE SAME WAS DECLINED. IN VIEW OF THE ABOVE, THERE IS NO MERIT IN THE CONTENTIONS THAT THE MATERIAL GATHERED WAS NOT CONFRONTED OR THAT REA SONABLE OPPORTUNITY WAS NOT ALLOWED. THE ADDITION OF R S.6,25,359/ - IS CONFIRMED. THE GROUNDS RAISED IN THIS APPEAL ARE DISMISSED. 4 . WE FIND THAT NOW THE ASSESSEE S COUNSEL STATED THAT NO OPPORTUNITY WAS ALLOWED TO CROSS EXAMINE THE PARTIES I.E. COMMISSION AGENTS AND CIT(A) CONFIRMED THE ACTION OF AO THAT NO SERVICE WAS RENDERED BY RECIPIENT OF THE COMMISSION MADE HURRIEDLY WITHOUT FURN ISHING COPIES OF DEPOSITIONS. HENCE, HE REQUIRES THAT THE ISSUE NEEDS RECONSIDERATION AFTER ALLOWING OPPORTUNITY OF BEING HEARD AND AFTER ALLOWING OPPORTUNITY OF CROSS EXAMINATION TO THE COMMISSION AGENTS. ON THIS, LD. SR. DR HAS NOT OBJECTED TO THE SETT ING ASIDE OF THIS ISSUE TO THE FILE OF THE AO. IN TERM OF THE ABOVE, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION. AO WILL ALLOW ADEQUATE OPPORTUNITY TO CROSS EXAMINE THE PARTIES TO THE ASSESSEE AND THEN DECIDE THE ISSUE. APPEAL O F ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6 . ORDER IS PRONOUNCED IN THE OPEN COURT . S D / - S D / - ( P. K. BANSAL ) (MAHAVIR SINGH) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED : 10 TH APRIL , 201 5 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . A PPELLANT CARBON STEEL (INDIA) AGENCY, 23A, NETAJI SUBHAS ROAD, KOLKATA - 700001 . 2 RESPONDENT ITO, WARD - 34 (3), KOLKATA . 3 . THE CIT (A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .