The DCIT, Central Circle, Vijayawada V. Sri Satri Kambagiri Swamy, Vijayawada

ITA 188/VIZ/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56794 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TH L PETER
• Assessee Lawyers: N O N E
• Keywords: Search and seizure
• Section: 40A(3); 132

Judgement Text

ITA NO188/V/2011 SATRI KAMBAGIRI SWAMY, VJA. 1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 188 /VIZAG/ 20 11 ASSESSMENT YEAR : 2007 - 08 DCIT CENTRAL CIRCL E VIJAYAWADA VS. SATRI KAMBAGIRI SWAMY VIJAYAWADA (APPELLANT) (RESPONDENT) PAN NO.AVVPS 6803M APPELLANT BY: SHRI TH.L. PETER, CIT(DR) RESPONDENT BY: N O N E D ATE OF HEARING: 0 4. 0 8.2011 D ATE OF PRONOUNCEMENT: 0 9. 0 8.2011 ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) ON A SOLITARY GROUND THAT THE CIT(A) IS NOT JUSTIFIED IN DELETING THE DISALLOWANCE OF SUB COMMISSION PAID TO SUB AGENTS I N VIEW OF PROVISIONS OF SECTION 40A(3) OF THE INCOME-TAX ACT (HEREINAFTER C ALLED AS AN ACT ). 2. THIS APPEAL WAS TAKEN UP FOR CONSIDERATION ON 4. 8.2011 AND THE ASSESSEE MOVED AN APPLICATION FOR THE ADJOURNMENT. BUT FROM CAREFUL PERUSAL OF THE RECORD, WE FIND THAT ON EARLIER OCCASIONS, T HE HEARING WAS ADJOURNED FOR ONE REASON OR THE OTHER AND MORE OVER FROM CARE FUL PERUSAL OF RECORD, WE FIND THAT ISSUES INVOLVED THEREIN CAN BE DISPOSED O F EVEN IN THE ABSENCE OF THE ASSESSEE. ACCORDINGLY, WE REJECT THE ADJOURNME NT APPLICATION OF THE ASSESSEE AND HEARD THE REVENUE. 3. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE WAS DERIVING INCOME FROM COMMISSION IN REAL ESTATE BUSI NESS AND OTHER SOURCES. A SEARCH AND SEIZURE OPERATION U/S 132 WERE CONDUCT ED IN THE CASE OF M/S. ROWFIN REAL ESTATE PVT. LTD., WHEREIN THE ASSESSEE IS A COMMISSION AGENT. SUBSEQUENTLY, AFTER ISSUE OF NOTICE U/S 153A, THE A SSESSEE FILED HIS RETURN OF ITA NO188/V/2011 SATRI KAMBAGIRI SWAMY, VJA. 2 INCOME ON 29.10.2009, DECLARING TOTAL INCOME AT ` 11,39,370/-. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER HA S DISALLOWED THE ENTIRE COMMISSION SAID TO HAVE BEEN PAID TO SUB-AGENTS AMO UNTING TO ` 38,70,650/- ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PRODU CE SUFFICIENT EVIDENCE IN SUPPORT OF HIS CLAIM. 4. AGGRIEVED, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE CIT(A) WITH THE SUBMISSION THAT THE ASSESSEE HAS FURNISHED THE COMPLETE DETAILS SUCH AS NAMES, ADDRESSES, PAN NUMBERS AND CHEQUE NU MBERS FOR THE PAYMENTS MADE TOWARDS SUB-AGENTS COMMISSIONS. IN R ESPONSE TO THE DIRECTIONS FOR PRODUCTION OF THESE PERSONS BEFORE T HE A.O., THE ASSESSEE HAS STATED BEFORE HIM THAT HE COULD NOT PRODUCE THE PER SONS DUE TO ONGOING AGITATION AND CONSEQUENT DISTURBANCES RECENTLY IN U NITED ANDHRA PRADESH MOVEMENT AND ALSO REQUESTED THE ASSESSING OFFICER T O GRANT SOME MORE TIME TO PRODUCE THE AGENTS AS THE TRANSPORT SYSTEM AND R TC BUSES WERE SUSPENDED AND THERE WAS NO TRANSPORT FACILITY. BUT THE A.O. HAS DISALLOWED THE COMMISSION PAYMENT TO ITS SUB-AGENTS WITHOUT CO NDUCTING ANY VERIFICATION OF THE FACTS OR ENQUIRY. ON THIS WRITTEN SUBMISSIO NS, THE CIT(A) ASKED THE A.O. TO VERIFY THE PAYMENT OF COMMISSION TO THE SUB AGENTS AND SUBMIT A REMAND REPORT. THE ASSESSING OFFICER DEPUTED THE I NSPECTOR FOR VERIFICATION AS PER THE DETAILS FURNISHED AND THE INSPECTOR CONTACT ED THE MAJORITY OF PERSONS AND SUBMITTED THE REPORT TO THE A.O., WHO ONWARDS F ILED THE REMAND REPORT BEFORE THE CIT(A). THE CIT(A) RELYING UPON THE REM AND REPORT ALLOWED THE PAYMENT OF COMMISSION TO THE EXTENT OF ` 33,70,650/- AND DISALLOWED THE BALANCE AMOUNT OF ` 5 LAKHS FOR THE REASONS THAT PERSONS RELATING TO TH ESE SUB-AGENTS WERE NOT AVAILABLE. 5. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL. DURING THE COURSE OF HEARING OF THE APPEAL, REMAND REPORT ALONG WITH THE ENQUIRY REPORT OF THE INSPECTOR WAS PLACED BEFORE US AND ON ITS PERUSAL, WE FIND THAT THE INSPECTOR HAD VERIFIED THE IDENTITY BY WAY OF PAN OR RATION C ARD AND HE ALSO INQUIRED REGARDING THE PAYMENT TO SUB-AGENTS. MAJORITY OF T HE SUB-AGENTS HAVE CONFIRMED THE RECEIPT OF COMMISSION AND ON THE BASI S OF THIS REMAND REPORT, THE CIT(A) HAS ALLOWED THE PAYMENT OF COMMISSION TO THE EXTENT OF ITA NO188/V/2011 SATRI KAMBAGIRI SWAMY, VJA. 3 ` 33,70,650/- AND THE BALANCE OF ` 5 LAKHS WAS DISALLOWED. ON CAREFUL PERUSAL OF THE ORDER OF THE CIT(A) IN THE LIGHT OF THE REMAND REPORT, WE FIND THAT THE CIT(A) HAS PROPERLY ADJUDICATED THE ISSUE AND NO INFIRMITY IS POINTED OUT THERE IN. WE THEREFORE, CONFIRM THE ORDER OF T HE CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 9.8.2011 SD/- SD/- ( BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 9 TH AUGUST, 2011 COPY TO 1 DCIT, CENTRAL CIRCLE, VIJAYAWADA 2 SRI SATRI KAMBAGIRI SWAMY, T - 1, VAIBHAV TOWERS, MUNICIPAL EMPLOYEES COLONY, NEAR BENZ CIRCLE, VIJAYAWADA 3 THE CI T, GUNTUR 4 THE CIT (A) , GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM