ACIT-1(2), RAIPUR (CG) V. M/S ASA OMPEX PVT. LTD, RAIPUR (CG)

ITA 207/BIL/2011

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8977 (ITAT-RAIPUR)
• Duration Of Justice: 6 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 08-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEETAL VERMA
• Assessee Lawyers: Y K MISHRA
• Keywords: Gross profit estimation
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 ASST. COMMISSIONER OF INCOME TAX 1(2), RAIPUR. VS. M/S. A.S.A IMPEX PVT LTD., ARIHANT COMPLEX, STATION ROAD, RAIPUR PAN/GIR NO.AAECA 9213 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI Y.K.MISHRA, AR REVENUE BY : SMT SHEETAL VERMA, DR DATE OF HEARING : 08/01/ 2018 DATE OF PRONOUNCEMENT : 15/01/ 2018 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE O RDER OF THE CIT(A)- RAIPUR, DATED 12.8.2011 FOR THE ASSESSMENT YEAR 2008- 2009. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL: 1. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.74,53 ,612/- ON ACCOUNT OF LOW GP. 2. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.17,92 ,,800/- WHICH WAS MADE ON ACCOUNT OF PAYMENT OF RELATIVES U/S.40A(2)(B) OF THE I.T.ACT, OUT OIF FREIGHT AND TRA NSPORTATION EXPENSES. 2 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 3. WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED IN DISALLOWING RS.12,13,271/- MADE OU T OF COMMISSION EXPENSES PAID TO RELATED PARTIES. 3. APROPOS GROUND NO.1 OF APPEAL, THE RELEVANT FACTS ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAS SHOWN TURNOVER OF RS.44.09 CRORES ON WHICH GROSS PROFIT WAS SHOWN AT 1.46 CRORES WHICH IS 3.31% AS COMPARED TO PRECEDING YEAR, WHERE, THE G.P. WAS SHOWN AT 6.07% IN AN ALMOST IDENTICAL TURNOVER. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SUBSTANTIATE WITH COGENT REASON REGARDING FALL IN GROSS PROFIT AND NET PROFIT A S COMPARED TO PRECEDING ASSESSMENT YEARS. THE ASSESSEE FAILED TO FURNISH ANY EXPLANA TION. THEREFORE, THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCO UNT U/S.145(3) OF THE ACT AND ENHANCED THE G.P. TO 5% AS AGAINST 3.31% SH OWN BY THE ASSESSEE. 4. BEFORE THE CIT(A), THE ASSESSEE FILED THE BOOKS OF ACCO UNT AND OTHER DOCUMENTS. IT WAS SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT AS THE ASSESSEE HAD PRODUCED BOOKS OF ACCOUNT, SUCH AS CASH BOOK, BANK BOOK, JOURNAL, LEDGER, PU RCHASE/SALE BILLS FILES AND FILE CONTAINING VOUCHERS TO SUBSTANTIATE THE EX PENSES INCURRED TROUGH THE BOOKS AND THE ASSESSING OFFICER HAS NOT POINTE D OUT ANY SPECIFIC DISCREPANCY IN THE PURCHASES AND SALES. THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE AUDITED U/S.44AB OF THE ACT. WITHOUT GIVING ANY PROPER 3 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 FINDINGS, THE REJECTION OF ACCOUNT BY THE ASSESSING OFFICE R IS BAD IN LAW. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNTS AUDITED U/S.44AB OF THE ACT AND THE QUANTITATI VE DETAILS AS REQUIRED BY CLAUSE 28B OF FORM NO.3CD REGARDING FINISH ED GOODS I.E. OPENING STOCK OF FINISHED GOODS, FINISHED GOODS PURCHASED DURING THE YEAR, FINISHED GOODS SOLD AND CLOSING STOCK OF FINISHED GOODS WER E PREPARED AND AUDITED BY A QUALIFIED CHARTERED ACCOUNTANT S WERE E NCLOSED WITH FORM NO.3CD, WHICH HAVE BEEN FORMING PART OF AUDIT REPORT AND PRODUCED BEFORE THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE ASSESSEE H AS ADOPTED A CONSISTENT AND REGULAR METHOD OF ACCOUNTING AND VALUATIO N OF STOCK DURING THE YEAR IN QUESTION. THE ASSESSEE HAS RELIED ON VARIOUS JUDICIAL PRONOUNCEMENTS TO CONTEND THAT ONCE THE ASSESSEE HAS MAINTAI NED STOCK REGISTER IN PROPER FORM AND AUDITED, THE ASSESSING OFFICE R CANNOT REJECT THE BOOKS OF ACCOUNT U/S.145(3) OF THE ACT. 5. THE CIT(A) ON CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALSO THE JUDGEMENTS CITED BEFORE HIM, HAS HELD THAT THE RE JECTION OF BOOKS OF ACCOUNT BY THE ASSESSING OFFICER IS NOT JUSTIFIED AND CONSEQU ENTLY, DELETED THE ESTIMATION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: I HAVE CAREFULLY CONSIDERED THE STATED FACTS WITH REFE RENCE TO THE FACTS OBTAINING FROM THE CORD AND GONE THROUGH THE ASSESSMENT ORDER, I HAVE ALSO GONE THROUGH THE BOOKS OF ACCOUNT, STOCK REGIST ER AND OTHER 4 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 EVIDENCES PRODUCED AND FURNISHED BEFORE ME. I FIND THA T THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE APPELLANT H AS MAINTAINED QUANTITATIVE DETAILS IN-THE FORM OF REGISTER OF FIN ISHED GOODS. IN THE CASE OF CIT VS. SMT POONAM RANI 326 ITR 223 (DELHI) IT WAS HELD THAT WHERE AN' ADDITION WAS MADE BECAUSE OF MERE FALL HI GR OSS PROFIT WITHOUT ANY DEFECT IN THE ACCOUNTS EXCEPT FOR THE ABSENCE OF STOCK REGISTER. DELETION OF ADDITION WAS UPHELD BY THE HIGH COURT IN ASHOK REFRACTORIES PVT LTD. VS. CIT (2005) 148 TAXMAN 635 ( CAL.) IT WAS HELD THAT THE REJECTION OF THE 1 BOOKS OF ACCOUNT ONLY IN THE ABSENCE OF STOCK REGISTER HAVING REGARD TO THE AVAILABILITY OF TH E OTHER' MATERIALS FROM WHICH THE INCOME COULD BE DEDUCED, WAS CONTRARY TO THE PROVISO TO SECTION 145 UNLESS' THERE WAS A FINDING OR OPINION EI THER THAT THE RECORDS WERE INCORRECT AND INCOMPLETE OR THAT THE' METHO D OF ACCOUNTING APPLIED WAS SUCH THAT THE INCOME COULD NOT BE D EDUCED FROM THE ACCOUNTS SO MAINTAINED BY THE-APPELLANT. THE GROUND THAT THE ITEM WISE STOCK REGISTER WAS NOT MAINTAINED, AND, THERE FORE, THE- ACCOUNTS WERE SOUGHT TO BE REJECTED, WAS ABSOLUTELY PERVER SE AND COULD NOT BE SUSTAINED IN THE ABSENCE OF ANY OPINION EXP RESSED OR ANY FINDING ARRIVED AT TO THE EFFECT THAT THE ACCOUNTS MAI NTAINED WERE INCORRECT OR INCOMPLETE OR THAT THE METHOD OF ACCOUNTING APPLIED WAS SUCH THAT THE INCOME COULD NOT BE DEDUCED. IN THE, ABSENCE ANY SUCH FINDING, THE ACCOUNT BOOKS COULD NOT REJECTED MERELY ON THE GROUND THAT ITEM WISE STOCK WAS NOT MAINTAINED IN THE STOCK REGISTER. THUS REJECTION OF ACCOUNT BOOKS WAS NOT JUSTIFIED. IN ITO V . BOTHRA INTERNATIONAL [2008] 117 TTJ (JD.) 672 IT WAS HELD T HAT WHERE THE A.O LAID NO MATERIAL ON RECORD TO SUGGEST THAT THERE HAD B EEN ANY SUPPRESSION OF INCOME NOR THAT THE APPELLANT CARRIED AN Y ACTIVITY OUTSIDE THE BOOKS, MERELY BECAUSE OF DECLINE IN GP RATE, BOOKS OF ACCOUNT COULD NOT BE REJECTED. IN DELHI SECURITIES PRINTE RS V. DY. CIT [2007] 15 SOT 353 (DELHI) IT WAS HELD THAT REJECTION OF BOOKS O F ACCOUNT MERELY BECAUSE APPELLANT HAS NOT MAINTAINED STO CK REGISTER, WITHOUT POINTING OUT ANY SPECIFIC DEFECTS IN BOOKS OF ACCO UNT OF ANY NATURE WHATSOEVER, COULD NOT BE SAID TO BE JUSTIFIED. IN S.N. NAMASIVAYAM CHETTIER V. CIT (1960) 38 ITR 579 (S.C.) , THE HON'BLE SUPREME COURT HELD THAT NON-PRODUCTION OF STOCK REGISTE R AND MANUFACTURING ACCOUNTS WHEN THE APPELLANT MAINTAINED REGULAR ACCOUNTS WOULD NOT FORM THE BASIS FOR REJECTING THE ACCOUNT S, PARTICULARLY, WHEN THERE WERE OTHER MATERIAL FROM WH ICH THE INCOME COULD BE DEDUCED. IT IS ONLY IF, AFTER TAKING INTO ACCO UNT ALL THE MATERIALS INCLUDING THE ONE OF STOCK REGISTER, IT WAS FO UND THAT FROM THE METHOD OF ACCOUNTING FOLLOWED, THE CORRECT PROFIT O F THE BUSINESS WERE NOT DEDUCTIBLE, THE OPERATION OF THE PROVISO TO SECTION 13 OF THE 5 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 1922 ACT WOULD BE ATTRACTED. THE REJECTION OF THE BOOK S OF ACCOUNT WAS NOT JUSTIFIED HAVING REGARD TO PROVISO TO SECTION 1 45 AS IT STOOD PRIOR TO ITS AMENDMENT APPLICABLE TO THE RELEVANT ASSESSM ENT YEAR. THE ABSENCE OF STOCK REGISTER ITSELF WOULD NOT JUSTIFY THE REJECTION OF BOOKS OF ACCOUNT UNLESS COUPLED WITH CERTAIN OTHER FACTORS. THERE WAS MATERIAL FROM WHICH EVEN WITHOUT THE STOCK REGISTER THE ACCOUNTS COULD BE VERIFIED. CONSIDERING ALL THE ABOVE FACTS AND CIRCUM STANCES OF THE CASE, DECISION RELIED UPON AND AFTER, VERIFICATION OF BO OKS OF ACCOUNT, I AM OF THE VIEW THAT THERE WAS NO FINDING TO THE EXTE NT THAT THE. ACCOUNTS WERE NOT CORRECT AND COMPLETE OR THAT THE AO WA S OF THE OPINION THAT THE INCOME COULD NOT BE DEDUCED FROM THE ACCOUNTS MAINTAINED BY THE APPELLANT. IN THE ABSENCE OF SUCH CO NCLUSION, THE BOOKS OF ACCOUNT COULD NOT BE REJECTED. HENCE, THE IMPUG NED ESTIMATED ADDITION ON GP. BEING WITHOUT ANY EVIDENCE IS UNSUSTAINABLE ON FACTS AND IN LAW AND HENCE, THE SAME IS DELETED. 6. LD D.R. VEHEMENTLY OPPOSED THE DECISION OF THE CIT( A) AND SUBMITTED THAT THE GROSS PROFIT SHOWN BY THE ASSESSEE IS DECREASED AS CO MPARED TO PRECEDING ASSESSMENT YEARS. THE ASSESSEE HAD NOT PRODUCED Q UANTITATIVE DETAILS OF THE FINISHED GOODS AND, THEREFORE, THE ASSESSIN G OFFICER IS JUSTIFIED IN REJECTING BOOKS OF ACCOUNT U/S.145(3) OF THE ACT AND ESTIMATING THE GROSS PROFIT AT 5%. 7. CONTRA, LD A.R. OF THE ASSESSEE SUPPORTED THE ORDER O F THE CIT(A). LD A.R. SUBMITTED THAT IN THE PRECEDING ASSESSMENT YEAR AS AG AINST THE GROSS PROFIT SHOWN AT 6.07%, THE NET PROFIT WAS SHOWN AT 0.1 5%. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AS AGAINST GROSS PROFIT A T 3.31%, THE NET PROFIT WAS SHOWN AT 0.19% WHICH IS COMPARABLE INCRE ASED. HE ALSO SUBMITTED FOR THE SUCCEEDING ASSESSMENT YEARS, THE GROSS PROF IT AND NET 6 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 PROFIT SHOWN BY THE ASSESSEE IS ACCEPTED BY THE DEPARTMEN T. LD A.R. RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. SMT. POONAM RANI, 326 ITR 223 (DELHI), WHEREIN IT WAS HEL D THAT WHERE AN ADDITION WAS MADE BECAUSE OF MERE FALL IN GROSS PROFIT W ITHOUT POINTING OUT ANY DEFECTS IN THE ACCOUNTS EXCEPT FOR THE ABSENCE OF STOCK REGISTER IS UNJUSTIFIED. HE ALSO FURTHER RELIED ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ACIT VS. SHRI ROOPCHAND THAR ANI, 208 TAXMAN 223, WHEREIN, IT WAS HELD SINCE SPECIFIC POINTS WERE NOT P OINTED OUT, THE BOOKS OF ACCOUNTS COULD NOT REJECTED AND PROFIT RATE COUL D NOT BE APPLIED. LD A.R. RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF S.N. NAMASIVAYAM CHETTIER VS CIT (1960) 38 ITR 579 (SC), W HEREIN, IT WAS HELD THAT NON-PRODUCTION OF STOCK REGISTER AND MANUFACTURING ACCOUNTS WHEN THE ASSESSEE MAINTAINED REGULAR ACCOUNT WOULD NOT FORM THE BA SIS FOR REJECTING THE ACCOUNTS, WHEN THERE WERE OTHER MATERIAL FROM WHIC H THE INCOME COULD BE DEDUCTED. FURTHER, HE RELIED ON THE DECISION OF ITA T RAIPUR BENCH IN THE CASE OF ITO VS. NIRMAL KUMAR KHETPAL(HUF), ITA NO.47/B LPR/2011, FOR THE ASSESSMENT YEAR 2007-08, WHEREIN THE NET PROFIT HAD INCR EASED AS COMPARED TO LAST YEAR ALTHOUGH THERE WAS SLIGHT DECLINE IN G.P. PERCENTAGE, IT WAS HELD THAT THE ASSESSING OFFICER DID NOT REJECT THE BOOKS OF ACCO UNTS EITHER ON THE GROUND OF DIFFERENT INVISIBLE LOSS PROJECTED OR ON TH E ACCOUNT OF DAY-TO-DAY 7 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 STOCK BOOK NOT BEING MAINTAINED, THE REVENUE HAD NOT PROVED THE CASE BY A SUBSTANTIVE MATERIAL THAT THE GROSS PROFIT DISCLOSED WAS LO W. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE OR DERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE UNDISPUTED FACTS ARE THAT THE BOOKS OF ACCOUNT MAINTAIN ED BY THE ASSESSEE, SUCH AS CASH BOOK, BANK BOOK, JOURNAL, LEDGER, PURCHASE/SA LE BILLS FILES AND FILE CONTAINING VOUCHERS WERE PRODUCED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC ERROR I N THE BOOKS OF ACCOUNTS. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE IS FO LLOWING MERCANTILE SYSTEM OF ACCOUNTING REGULARLY, WHICH IS DUL Y AUDITED U/S.44AB OF THE ACT. THE ONLY BASIS ADOPTED FOR ENHANCING THE GROSS PROFIT IS THAT AS COMPARED TO PRECEDING YEAR, THE G.P. SHOWN IN THE PRESE NT YEAR IS LESS, WHICH IS NOT A GROUND TO ADOPT THE GROSS PROFIT MORE TH AN THE SHOWN BY THE ASSESSEE. THERE MAY BE VARIOUS FACTORS FOR DECEASING GROSS PR OFIT YEAR TO YEAR. ONLY WHEN THERE IS NO DEFECT POINTED OUT IN TH E BOOKS OF ACCOUNT, THE ASSESSING OFFICER CANNOT REJECT THE BOOKS OF ACCOUNT U/S.145(3 ) AND CONSEQUENTLY, ENHANCED THE GROSS PROFIT. THE ASSESSEE HAS FI LED A CHART WHEREIN IN THE PRECEDING ASSESSMENT YEAR AS AGAINST THE GR OSS PROFIT SHOWN AT 6.07%, THE NET PROFIT WAS SHOWN AT 0.15%. IT IS AL SO SUBMITTED BY LD. AR OF THE ASSESSEE THE GROSS PROFIT AND NET PROFIT SHOWN BY THE ASSESSEE IN THE SUCCEEDING ASSESSMENT YEARS HAS BEEN ACCEPTED BY THE DEPARTME NT. 8 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 CONSIDERING THE ABOVE, IT CANNOT BE SAID TO BE A GROUN D THAT IN THE PRESENT ASSESSMENT YEAR THE NET PROFIT HAS FALLEN AS COMPARED TO T HE PREVIOUS AND SUCCEEDING ASSESSMENT YEARS. WE ALSO FIND THAT THE DECISIONS R ELIED BY LD. CIT(A) IN THE IMPUGNED ORDER ARE APPLICABLE TO THE F ACTS OF THE ASSESSEES CASE. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW T HAT THE CIT(A) WAS FULLY JUSTIFIED IN HOLDING THAT THE ASSESSING OFFICER E RRED IN REJECTING THE BOOKS OF ACCOUNT AND DELETED THE ADDITION MADE ON ESTIM ATION BY THE ASSESSING OFFICER. THEREFORE, THIS GROUND OF APPEAL OF T HE REVENUE IS REJECTED. 9. IN GROUND NO.2 THE REVENUE IS AGGRIEVED BY THE DE LETION OF ADDITION OF RS.17,92,800/- ON ACCOUNT OF PAYMENT TO RELATIVES U/S.4 0A(2)(B) OF THE I.T.ACT, OUT OF FREIGHT AND TRANSPORTATION EXPENSES. 10. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS CLAIME D FREIGHT AND TRANSPORTATION EXPENSES AT RS.64,71,254/-. DURING THE A SSESSMENT PROCEEDINGS THE AO FOUND THAT OUT OF TOTAL EXPENSES, AN AMOUNT OF RS.17,92,800/- WAS PAID TO THE FOLLOWING PERSONS AT THE FAG END OF THE YEAR:- DT. OF PAYMENT NAME ADDRESS AMOUNT TDS PAID ON 31/03/2008 SHRI RANJIT AGRAWAL DHUBRI 442800/- 07/0 7/08 31/03/2008 SHRI SAWARMAL AGRAWAL (HUF) KOLKATA 4590 00/- 07/07/08 31/03/2008 SHRI MOHANLAL AGRAWAL(HUF) KOLKATA 47520 0/- 07/07/08 31/03/2008 SHRI RAMCHANDRA RANJIT KUR(HUF) DHUBRI 415800/- 07/07/08 TOTAL 1792800/- 9 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 THE AO OBSERVED THAT THE PAYMENT HAS BEEN MADE BY THE ASSESSEE TO THE PERSONS SPECIFIED U/S.40A(2)(B) OF THE ACT AND THE ASSESSEE H AS NOT MADE ANY PAYMENT DURING THE YEAR UNDER CONSIDERATION TO T HE SERVICE PROVIDER. THE ASSESSING OFFICER ALSO OBSERVED THAT THE TDS HAS BEEN P AID AGAINST THOSE PAYMENTS ON 7.7.2008, WHICH SHOWS THAT IT WAS AN AF TERTHOUGHT. THEREFORE, THE ASSESSING OFFICER DISALLOWED RS.17,92,800/ - AND ADDED HE SAME TO THE INCOME OF THE ASSESSEE. 11. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE A SSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND DULY AUDI TED BY CHARTERED ACCOUNTANT. AS REGARDS TO NON-SUBMISSION OF INCOME TAX RE TURNS BEFORE THE ASSESSING OFFICER, IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAS NOT GIVEN SUFFICIENT TIME TO FILE THE SAME OF THE RECIPIENTS. T HE TDS DEDUCTED FROM THE BILL UPTO 28.2.2008 WERE PAID ON OR BEFORE 31.3.200 8 AND THE BILLS RAISED DURING THE MONTH OF MARCH WERE PAID ON 7.7.2008 I.E. WELL BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME U/S.139(1) OF THE ACT AND THE ASSESSEE HAS PAID THE TDS ACCRUED INTEREST THEREON. 12. THE CIT(A) OBSERVED THAT THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT ON THE BASIS OF MERCANTILE SYSTEM OF ACCOUNTING. TH E ASSESSEE HAS DEDUCTED TDS FROM THE BILLS PAID TO THE PARTIES AND DE POSITED THE SAME WITH GOVERNMENT EXCHEQUER. THE ASSESSEE HAS ALSO FURNISHED IN COME TAX 10 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 RETURNS OF THE INCOME OF THE RECIPIENTS. IN VIEW ABOVE NARRATED FACTS, THE CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICE R. 13. BEFORE US LD D.R. SUBMITTED THAT THE PAYMENTS WER E MADE TO RELATIVE, HENCE, THE CIT(A) IS NOT JUSTIFIED IN DELETING THE SAM E. 14. CONTRA, LD A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ASSESSEE HAS FURNISHED SUFFICIENT DOCUMENT S TO SUBSTANTIATE THE CLAIM. THE ASSESSEE HAS MAINTAINED PROPER BOOKS OF ACCOUNTS AND THE PAYMENTS WERE MADE TO THE RECIPIENTS TH ROUGH BANKING CHANNELS. THE TDS HAS BEEN DEDUCTED FROM THE PAYMENTS MADE TO THE RECIPIENTS. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS PAID RS. 17,92,800/- OUT OF FREIGHT AND TRANSPORTING EXPENSES TO FOUR PERSO NS. WE FIND THAT THE ASSESSEE HAS DEDUCTED THE TDS OUT OF THE AMOUNTS PAID TO RECIPIENTS AND DEPOSITED THE SAME IN THE GOVERNMENT EXCHEQUERS, WHICH H AS NOT BEEN DISPUTED BY THE REVENUE. .IT IS ALSO ON RECORD THAT THE TDS DEDUCTED FROM THE BILL UPTO 28.2.2008 WERE PAID ON OR BEFORE 31.3 .2008 AND THE BILLS RAISED DURING THE MONTH OF MARCH WERE PAID ON 7.7.2008 I.E. WELL BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME U/S.139(1) OF THE ACT AND THE ASSESSEE HAS PAID THE TDS AND INTEREST ACCRUED THEREON. CONSIDE RING THE FACTS IN 11 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 ENTIRETY, WE ARE OF THE CONSIDERED OPINION THAT THE C IT(A) IS FULLY JUSTIFIED IN DELETING THE ADDITION OF RS.17,92,800/-, WHICH IS HER EBY CONFIRMED AND GROUND NO.2 OF REVENUE IS DISMISSED. 16. GROUND NO.3 OF APPEAL RELATES TO DELETION OF RS.1 2,13,271/- OUT OF COMMISSION EXPENSES PAID TO RELATED PARTIES. 17. BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE A SSESSEE CLAIMED COMMISSION PAYMENT AND BROKERAGE OF RS.12,13,271/- WHICH WAS PAID TO THE FOLLOWING PERSONS AT THE FAG END OF THE YEAR :- SN NAME AMOUNT (RS.) DT.OF PAYMENT TDS PAID ON 1. SHRI L.K.BHURA (HUF) 104725/- 20.02.08 07.07.08 2. SHRI K.C.BHURA (HUF) 105850/- 20.02.08 07.07.08 3. SMT. MANISHA SINGHI 108080/- 20.02.08 07.07.08 4. SHRI ANKIT LOSALKA 109765/- 20.02.08 07.07.08 5. SHRI RANJIT AGRAWAL 140252/- 27.03.08 07.04.08 6. SHRI MAHESH K. BIHANI(HUF) 190185/- 31.03.08 28.07.08 7. SMT. SANDHYA TYANANI 224697/- 31.03.08 28.07.08 8. M/S KRISHNA TRADE CORPORATION 229717/- 31.03.08 28.07.08 THE ASSESSING OFFICER OBSERVED THAT IN ORDER TO SUBSTANTIA TE THE CLAIM, THE ASSESSEE HAS ONLY FILED LEDGER COPY OF ACCOUNT, HOWEVER, COP IES OF BILLS SUBMITTED BY THE PARTIES WERE NOT PRODUCED, NEITHER TH E NATURE OF SERVICES RENDERED NOR PARTICULARS OF THE PARTIES FOR WHOM THE A SSESSEE CLAIMED SERVICES WERE FURNISHED. THE AO ALSO OBSERVED THAT ALTHOU GH THE TDS WAS 12 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 DEDUCTED, THE REMITTANCES WERE MADE ON 7.7.2008. IN VI EW OF THIS, HE WAS OF THE OPINION THAT IT IS A COLOURBALE DEVICE TO REDU CE THE TAXABLE INCOME BY DIVERTING THE INCOME TO DIFFERENT PERSONS AND, THEREFO RE, HE DISALLOWED RS.12,13,271/- AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 18. ON APPEAL, THE CIT(A) OBSERVED THAT ALMOST ALL TH E RECIPIENTS OF THE COMMISSION INCOME WERE ASSESSED TO TAX AND THEIR PAN PARTIC ULARS WERE FILED. THE BOOKS OF ACCOUNTS HAVE BEEN EXAMINED WITH RE SPECT TO COMMISSION EXPENSES. THE RECIPIENTS OF COMMISSION HAVE PROVIDED SER VICES TO THE ASSESSEE AND RECEIVED COMMISSION AS CONSIDERATION FROM THE ASSE SSEE AND DEDUCTED THE TDS FROM THE COMMISSION AMOUNTS TO THE RECIP IENTS. HE ALSO OBSERVED THAT THE SAID PAYMENT WAS WHOLLY AND EXCLUSI VELY FOR THE BUSINESS PURPOSE. ACCORDINGLY, HE DELETED THE DISALLOWANCE. 19. LD. DEPARTMENT REPRESENTATIVE SUPPORTED THE ORDER OF AO. 20. LD. AR SUPPORTED THE ORDER OF CIT(A) AND SUBMITTE D THAT THE TDS AMOUNT WAS DEDUCTED FROM THE RECIPIENTS AMOUNT AND DEP OSITED IN THE GOVERNMENT EXCHEQUER BEFORE FILING OF THE RETURN OF INCOME U/S.139(1) OF THE ACT. THE NAME AND ADDRESS OF THE RECIPIENTS OF COMMI SSION WERE DISCLOSED TO THE AO AND THE AO HAS NOT RAISED ANY DOUBT S ABOUT THE VERACITY OF THE COMMISSION PAYMENT. 13 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 21. WE HAVE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE UNDISPUTED FACTS OF THE CASE ARE THAT THE A O HAS MADE ADDITION OF RS.12,13,271/- ON ACCOUNT OF COMMISSION PAID TO THE BR OKERS ON THE GROUND THAT THE PAYMENTS HAVE BEEN MADE AT THE FAG E ND OF THE YEAR AND TDS WAS PAID ON 07.07.2008 OBSERVING THAT THE EXPENSES ARE CLAIMED TO REDUCE THE TAXABLE INCOME OF THE ASSESSEE. IT IS A FACT TH AT THE ASSESSEE HAS DEPOSITED THE TDS AMOUNT DEDUCTED FROM THE RECIPIENTS COMMISSION ON 07.07.2008, WHICH IS BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S.139(1) OF THE ACT. IT IS NOT A CASE OF THE REVENUE T HAT THE TDS AMOUNTS HAVE NOT BEEN DEPOSITED BY THE ASSESSEE. THE AO HAS NOT D OUBTED THE PAYMENT OF COMMISSION TO THE RECIPIENTS. THE CIT(A) HAS PROPERLY APPRECIATED THE FACTS OF THE CASE AND RELYING ON VARIOUS JUDICIAL PRONOUNCEMENTS ON THIS ISSUE HAS DELETED THE ADDITION. IN OUR CONSIDERED VIEW THERE IS NO INFIRMITY IN THE ORDER OF THE CIT(A ), WHICH IS HEREBY CONFIRMED. 22. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 15/01/2018. SD/- SD/- (N.S SAINI) ( PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIALMEMBER RAIPUR; DATED 15 /01/2018 14 ITA NO.207/RPR/2011 ASSESSMENT YEAR : 2008-09 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, RAIPUR 1. THE APPELLANT : ASST. COMMISSIONER OF INCOME TAX 1(2), RAIPUR. 2. THE RESPONDENT. M/S. A.S.A IMPEX PVT LTD., ARIHANT COMPLEX, STATION ROAD, RAIPUR 3. THE CIT(A)- RAIPUR 4. PR.CIT- RAIKPUR 5. DR, ITAT, RAIPUR 6. GUARD FILE. //TRUE COPY//