Gulf Oil Corporation Limited, Hyderabad V. Dy. Commissioner of income Tax, Circle-2(3), Hyderabad

ITA 1776/HYD/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7659 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 23-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICAL MEMBER ITA.NO.1776/HYD/2013 ASSESSMENT YEAR 2004-2005 GULF OIL CORPORATION LTD., HYDERABAD. VS. DCIT, CIRCLE 2 (3) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. Y. RATNAKAR FOR REVENUE : MR. D. SUDHAKAR RAO DATE OF HEARING : 22.09.2014 DATE OF PRONOUNCEMENT : 25.09.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-III, HYDERABAD DATED 29.10.2013. THE ISSUE I N THIS APPEAL IS WITH REFERENCE TO CLAIM OF COMMISSION PAID OF RS.61 ,00,000 WITH RESPECT TO SALE OF LAND BUT DISALLOWED BY THE ASSES SING OFFICER. 2. THE FACTS ARE THAT DURING THE FINANCIAL YEAR RE LEVANT TO THE CURRENT ASSESSMENT YEAR, ASSESSEE HAD SOLD LAND ADMEASURING 14407.885 SQ. METERS AT BANGALORE TO ONE M/S. ABHIS HEK DEVELOPERS VIDE AGREEMENT DATED 28.06.2003. ASSESSE E CLAIMED THAT AMOUNT OF RS.61,00,000 HAD BEEN PAID AS COMMIS SION TO M/S. ASIA MANAGEMENT AND CONSULTANCY LTD., MUMBAI F OR THIS TRANSACTION. HOWEVER, A.O. NOTICED THAT AGREEMENT O F SALE WAS PRIOR TO THE AGREEMENT OF PAYMENT OF COMMISSION AND THEREFORE, HE ASKED ASSESSEE TO EXPLAIN WHY THE COMMISSION SHOULD NOT BE DISALLOWED AS NO SERVICES ARE RENDERED AFTER AGREEM ENT OF SALE. 2 ITA.NO.1776/HYD/2013 GULF OIL CORPORATION LTD., HYDERABAD A.O. DISALLOWED THE AMOUNT ON THE REASON THAT COMMI SSION AGREEMENT WAS AN AFTERTHOUGHT AND WAS MEANT ONLY FO R REDUCING THE TAX LIABILITY. THIS DECISION WAS UPHELD BY THE ITAT VIDE ITS ORDER DATED 18.12.2009 AND ON A M.A. MOVED BY ASSES SEE WITH REFERENCE TO NON-CONSIDERATION OF ADDITIONAL EVIDEN CE FILED, ITAT MODIFIED ITS ORDER AND SET ASIDE THE ISSUE TO THE F ILE OF A.O. FOR FRESH CONSIDERATION AND FOR CONSIDERING THE ADDITIO NAL EVIDENCE STATED ABOVE. IT ALSO DIRECTED THAT MR. V.G. GURNAN I, MANAGING DIRECTOR OF THE ABOVE SAID COMPANY SHOULD BE EXAMIN ED BEFORE FINALISING THE ASSESSMENT. IN THE RE-ASSESSMENT PRO CEEDINGS, A.O. ISSUED SUMMONS TO MR. V.G. GURNANI BUT BECAUSE OF H IS OLD AGE AND ALSO ON THE FACT THAT HE WAS NO LONGER IN THE M ANAGEMENT OF THE COMPANY SUBMITTED WRITTEN CONFIRMATIONS AND DID NOT APPEAR BEFORE THE A.O. ON THAT REASON A.O. DID NOT BELIEVE THE TRANSACTION AND DISALLOWED THE AMOUNT AND ASSESSED AS PER THE O RIGINAL ORDER. THE SAME WAS UPHELD BY THE LD. CIT(A). HENCE THE PR ESENT APPEAL BY ASSESSEE. 3. IN THE COURSE OF ARGUMENTS, IT WAS THE SUBMISSI ON OF THE LD. COUNSEL THAT MR. V.G. GURNANI COULD NOT APP EAR AS THE RE- ASSESSMENT PROCEEDINGS WERE TAKEN-UP JUST BEFORE TH E TIME BARRING DATE AND SUFFICIENT OPPORTUNITY WAS NOT GIV EN. FURTHER, IT WAS SUBMITTED THAT MR. V.G. GURNANI COULD NOT APPEA R DUE TO HIS OLD AGE BUT FILED WRITTEN SUBMISSIONS AND CONFIRMAT IONS WHICH WERE ALSO NOT CONSIDERED BY THE A.O. REFERRING TO T HE AGREEMENT OF SALE BETWEEN ASSESSEE AND M/S. ABHISHEK DEVELOPERS, PARTICULARLY CLAUSE-5, IT WAS THE SUBMISSION THAT THE SAID AGREE MENT SPECIFICALLY MENTIONS ABOUT MR. V.G. GURNANI WHO FO R ADMINISTRATIVE CONVENIENCE WILL REPRESENT THE OWNER I.E., ASSESSEE AND MR. SUSHEEL MANTRI FOR THE DEVELOPER. IT WAS FU RTHER SUBMITTED THAT CLAUSE-5 SPECIFICALLY MENTIONS THAT PROPOSALS PREPARED AND 3 ITA.NO.1776/HYD/2013 GULF OIL CORPORATION LTD., HYDERABAD SENT BY THE DEVELOPER TO THE OWNER WILL BE CLEARED BY MR. V.G. GURNANI ON BEHALF OF OWNER WITHIN 15 DAYS OF RECEIP T OF THE SAME AND SHALL BE BINDING ON THE OWNER. IT WAS SUBMITTED THAT MR. V.G. GURNANI WHO WAS MANAGING DIRECTOR OF THE SAID COMPA NY HAS ASSISTED ASSESSEE-COMPANY IN THE DEVELOPMENT OF ITS PROPERTY AND HENCE, COMMISSION WAS PAID FOR SERVICES. THIS PART OF THE AGREEMENT WAS NOT CONSIDERED BY THE AUTHORITIES. IT WAS THE SUBMISSION THAT ONE MORE OPPORTUNITY MAY BE GIVEN I N ORDER TO SUPPORT ASSESSEES CONTENTIONS BEFORE THE AUTHORITI ES. 4. LEARNED D.R. HOWEVER, SUBMITTED THAT ASSESSEE F AILED IN JUSTIFYING THE CLAIM OF COMMISSION. HENCE, THE O RDERS OF AUTHORITIES ARE TO BE UPHELD. 5. HAVING CONSIDERED THE RIVAL CONTENTIONS AND PER USING THE DOCUMENTS PLACED ON RECORD, IT IS NOTICED THAT A.O. HAS NOT EXAMINED THE ISSUE IN ITS CORRECT PERSPECTIVE. EVEN THOUGH ITAT DIRECTED THE A.O. TO EXAMINE MR. V.G. GURNANI AT TH AT TIME, IT WAS NOT KNOWN THAT MR. V.G. GURNANI WAS NOT IN THE MANA GEMENT OF THE SAID COMPANY AND HE IS IN ADVANCED AGE. KEEPING THESE MATTERS, A.O. COULD HAVE ISSUE COMMISSION UNDER CPC TO OTHER AUTHORITIES AT BANGALORE IN ORDER TO EXAMINE MR. V. G. GURNANI IF REQUIRED. MR. V.G. GURNANI HAS SUBMITTED WRITTEN CO NFIRMATIONS WHICH WERE NOT AT ALL CONSIDERED BY THE A.O. NOT ON LY THAT AS SEEN FROM THE ASSESSMENT ORDER, THE RE-ASSESSMENT WAS TA KEN-UP IN THE MONTH OF DECEMBER, 2012 AND ASSESSEE WAS ASKED TO P RODUCE MR. V.G. GURNANI FOR EXAMINATION ON 25.03.2013 AND 26.0 3.2013 ASSESSEE SUBMITTED THAT MR. V.G. GURNANI WAS UNABLE TO ATTEND BECAUSE OF OLD AGE AND SUBMITTED LETTER FROM HIM RE QUESTING TO TREAT THE SAME AS SUBMISSION OF MR. V.G. GURNANI. T HIS INDICATES THAT THE A.O. ASKED ASSESSEE TO PRODUCE JUST THREE DAYS BEFORE THE DATE OF ORDER AND IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION 4 ITA.NO.1776/HYD/2013 GULF OIL CORPORATION LTD., HYDERABAD THAT ASSESSEE WAS NOT GIVEN SUFFICIENT OPPORTUNITY IN ORDER TO COMPLY WITH THE DIRECTIONS OF THE A.O. NOW THAT ASS ESSEE SOUGHT ONE MORE OPPORTUNITY TO BE GIVEN TO ESTABLISH ITS C LAIM, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES AND RESTORE THE ISSUE TO THE FILE OF A.O. FOR FRESH CON SIDERATION. NEEDLESS TO SAY THAT A.O. IF REQUIRED, SHOULD EXAMI NE MR. V.G. GURNANI AT BANGALORE OR AT PLACE OF HIS STAY BY ISS UING NECESSARY COMMISSION UNDER CPC, IN CASE HE IS NOT IN A POSITI ON TO ATTEND BEFORE THE A.O. ASSESSING OFFICER IS ALSO DIRECTED TO CONSIDER THE WRITTEN CONFIRMATIONS FILED AND OTHER SUBMISSIONS M ADE BY ASSESSEE AND ALSO ANY EVIDENCE THAT MAY BE PRODUCED WITH REFERENCE TO CLAIM OF COMMISSION PAID TO MR. V.G. G URNANI/ SAID COMPANY. WITH THESE OBSERVATIONS, ASSESSEES GROUND S ARE CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25.09.2014. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 25 TH SEPTEMBER, 2014 VBP/- COPY TO 1. GULF OIL CORPORATION LTD., P.B. NO.1, SANATNAGAR (I.E) KUKATPALLI, HYDERABAD 500 018. 2. DCIT, CIRCLE 2 (3), HYDERABAD 3. CIT(A)-III, HYDERABAD 4. CIT-II, HYDERABAD 5. D.R. B BENCH, ITAT, HYDERABAD.