THE MAHARASHTRA STATE CO OP MARKETING FEDERATION LTD, MUMBAI V. DCIT 13(3), MUMBAI

ITA 2605/MUM/2013

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8536 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 11-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 05-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NEELIMA V NADKARNI
• Assessee Lawyers: CHETAN KARIA
• Keywords: Opportunity of being heard; TDS
• Section: 143(3); 40(a)(ia); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , HON'BLE ACCOUNTANT MEMBER ITA NO. 2599 /MUM/201 3 (A.Y: 2009 - 10 ) THE MAHARASHTRA STATE CO - OP. MARKETING FEDERATION LIMITED KANMOOR HOUSE, NARSI NATHA ST REET MASJID, MUMBAI 400 009 PAN: AAAAT 6218 L V. JT. C.I.T (OSD) 13(3) 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) ITA NO. 2604 /MUM/2013 (A.Y: 2008 - 09 ) THE MAHARASHTRA STATE CO - OP. MARKETING FEDERATION LIMITED KANMOOR HOUSE, NARSI NATHA ST REET , MASJID, MUMBAI 400 009 PAN: AAAAT 6218 L V. A . C.I.T 13(3) 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) ITA NO. 2605 /MUM/2013 (A.Y: 2006 - 07 ) THE MAHARASHTRA STATE CO - OP. MARKETING FEDERATION LIMITED KANMOOR HOUSE, NARSI NATHA ST REET , MASJID, MUMBAI 400 009 PAN: AAAAT 6218 L V. DY . C.I.T 13(3) 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) 2 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED ITA NO. 2606 /MUM/2013 (A.Y : 2008 - 09 ) THE MAHARASHTRA STATE CO - OP. MARKETING FEDERATION LIMITED KANMOOR HOUSE, NARSI NATHA ST REET , MASJID, MUMBAI 400 009 PAN: AAAAT 6218 L V. ADDL . C.I.T 13(2 ) 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI CHETAN KARIA DEPARTMENT BY : MRS. NEELIMA V. NADKARNI DATE OF HEARING : 13.12.2018 DATE OF PRONOUNCEMENT : 31 .12 .2018 O R D E R PER C. N. PRASAD (JM) 1. ALL T HESE APPEALS ARE FILED BY THE ASSESSEE AGAINST DIFFERENT ORDER S OF THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) - 24, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 28.12.2018 FOR THE ASSESSMENT YEARS 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09. ITA.NO. 2604/ MUM / 2013 (A.Y: 2008 - 09) 2. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER U/S. 154 OF THE ACT WHICH WAS SUSTAINED BY THE LD.CIT(A). 3 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED 3. AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEE BY LETTER DATED 24.07.2018 REQUESTED FOR WITHDRAWAL OF APPEAL. COPY OF THE LETTER IS PLACED ON RECORD. LD. DR HAS NO SERIOUS OBJECTIONS FOR ASSESSEE WITHDRAWING ITS APPEAL. 4. IN VIEW OF THE LETTER DATED 24.07.2018 BY THE ASSESSEE FOR WITHDRAWAL OF ITS APPEAL IN ITA.NO. 2604/ MUM / 2013, THIS APPEAL IS DISMISSED. ITA.NO. 2606/ MUM / 2013 (A.Y: 2008 - 09) 5. FIRST GROUND IN THE GROUNDS OF APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008 - 09 ARISING OUT OF 143(3) ORDER IS WITH REGARD TO CONFIRMING THE ADDIT ION MADE U/S. 41(1) OF THE ACT. 6. BRIEFLY STATED THE FAC TS ARE THAT, ASSESSING OFFICER W HILE COMPLETING THE ASSESSMENT NOTICED THAT AS PER TAX AUDIT REPORT , AUDITOR HAS STATED THAT THERE ARE VERY OLD DEBTOR AND CREDITOR BALANCES APPEARED IN THE BOOKS OF ACCOUNTS. BEFORE THE ASSESSING OFFICER , THE ASSESSEE CONTENDED THAT DUE TO PECULIAR ACCOUNTING SYSTEM FOLLOWED BY THE ASSESSEE WITH THE DISTRICT MARKETING OFFICE (DMO) THE LIST OF SUCH OLD CREDIT BALANCES WAS NOT AVAILABLE AND IN THE ABSENCE OF SUCH LIST IT WAS CONT ENDED THAT IT IS NEARLY IMPOSABLE TO DO AGE ANALYSIS OR TO EVEN SAY WHICH CREDITOR S WERE TO BE PAID O R NOT. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE 4 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED ASSESSING OFFICER INVOKING THE PROVISIONS OF SECTION 41 OF THE ACT TREATED 1% OF THE CLOSING BALAN CE OF THE CREDITORS AS ON 31.03.2008 AS INCOME OF THE ASSESSEE . 7. BEFORE THE LD.CIT(A) , ASSESSEE FURNISHED DETAILS OF DISTRICT MARKETING OFFICE WISE OUTSTANDING CREDIT BALANCE S TO THE EXTENT OF .9,52,45,777/ - OUT OF .26,89,62,760/ - BIFURCATING T HE BALANCES FOR MORE THAN ONE YEAR, MORE THAN TWO YEARS AND MORE THAN THREE YEARS. THE DETAILS FILED BEFORE THE LD.CIT(A) ARE IN RESPECT OF ALMOST 1/3 RD OF OUTSTANDING AND THE BALANCE OUTSTANDINGS HAVE MORE THAN THREE YEARS STOOD AT .2,25,865/ - AND THE OUTSTANDING FOR MORE THAN THREE YEARS CONTAINS LEAST OF .10/ - AND HIGHEST OF .99,738/ - AND THESE ARE FROM MEMBER COOPERATI VE MARKETING SOCIETIES, SMALL FIRMS AND BIG COMPANIES. THE LD.CIT(A) NOTICED THAT SMALL A MOUNTS ARE OUTSTANDING TO BE PAID FOR THE COMPANIES A ND ASSESSEE IS NOT INTERESTED IN PAYING EVEN THE SMALLEST AMOUNT OF .10/ - TO THOSE COMPANIES NOR THE COMPANIES ARE INTEREST ED IN RECOVERING THESE AMOUNTS FROM THE ASSESSEE EVEN AFTER A PERIOD OF THREE YEARS. THEREFORE , LD.CIT(A) HELD THAT THE PROVISIONS O F SECTION 41(1) OF THE ACT ARE ATTRACTED AND ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO .2,25,865/ - BEING THE CREDITORS BALANCE OUTSTANDING FOR MORE THAN THREE YEARS. 5 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED 8. BEFORE US, L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HERE IS NOTHING ON RECORD TO SUGGEST THAT THE LIABILIT Y TO PAY THE CREDITORS IS CEASED. THE ASSESSING OFFICER HAS GONE ONLY BY THE OBSERVATION MADE IN THE TAX AUDIT REPORT THAT VERY OLD DEBTOR AND CREDITOR BALANCES ARE APPEARED IN THE BOOKS OF ACCOUNTS AN D ARE SUBJECT TO CONFIRMATION. BASED ON THESE REMARKS THE ASSESSING OFFICER MADE ADHOC DISALLOWANCE OF 1% OF OUTSTANDING CREDITORS. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT 90% OF THE SHAREHOLDING OF THE ASSESSEE COMPANY IS HELD BY T HE STATE GOVERNMENT OF MAHARASHTRA AND IT IS A GOVERNMENT B ODY. L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE GOVERNMENT BODY HAS TO TAKE A DECISION TO WAIVE OR WRITE OFF THE BALANCES AND UNTIL THEN IT CANNOT BE SAID THAT THERE IS CESSATION OF LIABILITY . IT IS FURTHER CONTENDED THAT DETAILS WERE SUBMITTED BEFORE THE LD.CIT(A) AND THERE IS NO CESSATION OF LIABILITY AT ANY POINT OF TIME. 9. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE LD.CIT(A). IT IS FURTHER SUBMITTED BY THE LD. DR THAT LD.CIT(A) HAS ONLY DIRECTED TO VERI FY AND REWORK - OUT THE DISALLOWANCE AND THERE IS NO GRIEVANCE TO THE ASSESSEE. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW . IT WAS THE CONTENTION OF THE ASSESSEE BEFORE ASSESSING 6 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED OFFICER THAT IN VIEW OF THE PECULIAR ACCOUNTING SYSTEM FOLLOWED BY THE ASSESSEE WITH THE DISTRICT MARKETING OFFICE THE LIST OF SUCH OLD CREDIT BALANCES WAS NOT AVAILABLE. IT WAS CONTENDED THAT IN THE ABSENCE OF SUCH LIST IT IS NEARLY IMPOSSIBLE TO DO AGE ANALYSES OR TO EVEN SAY WHICH CREDITORS WERE TO BE PAID OR NOT. IN VIEW OF THESE SUBMISSIONS THE ASSESSING OFFICER TREATED THE 1% OF THE CREDITORS BALANCES AS INCOME OF THE ASSESSEE U/S. 41 (1) OF THE ACT. HOWEVER, THE LD.CIT(A) CONSIDER ING THE SUBMISSIONS AND PA RT OF THE DETAILS SUBMITTED BY THE ASSESSEE , HELD THAT , THE CREDITORS OUTSTANDING FOR MORE THAN THREE YEARS OF .2,25,865/ - SHALL BE TREATED AS CESSATION OF LIABILITY U/S. 41(1) OF THE ACT. HE ALSO DIRECTED THE ASSESSING OFFICER TO WORK OUT FURTHER DISALL OWANCE IN RESPECT OF BALANCE SUNDRY CREDITORS OF . 17.37 CRORES AS THE AS SESSEE HAS NOT FURNISHED THE DET AILS OF SUCH BALANCE SUNDRY CREDITORS OUTSTANDING . 11. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS NOT FURNISHED DETAILS BEFORE THE ASSESSING OFFICER A ND O NLY PARTIAL DETAILS WERE FURNISHED BEFORE THE LD.CIT(A). THOUGH THE ASSESSING OFFICER TREATED 1% OF THE OUTSTANDING CREDITORS AS CESSATION OF LIABILITY U/S. 41(1) OF THE ACT BASED ON THE TAX AUDIT REPORT REMARKS THAT THERE WERE VERY OLD DEBTORS AND CREDITORS BALANCES APPEARED IN THE BOOKS OF ACCOUNTS SUBJECT TO CO NFIRMATION. IN VIEW OF THE SUBMISSIONS OF THE ASSESSEE THAT IN THE ABSENCE OF COMPLETE 7 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED DETAILS IT IS NEARLY IMPOSSIBLE TO DO AGE ANALYSES OR TO EVEN SAY WHICH CREDITORS WERE TO BE PAID , AND FURTHER I N THE GIVEN PECULIAR FACTS OF THE ASSESSEE S CASE THAT WHEN THE ASSESSEE WAS NOT EVEN ABLE TO IDENTIFY THE CREDITORS AND NOT IN A POSITION TO FURNISH THE REQUIRED DETAILS BEFORE THE ASSESSING OFFICER, WE ARE NOT IN A POSIT I ON TO APPRECIATE THE SUBMISSIONS OF THE ASSESSEE THAT THERE CANNOT BE CESSATION OF LIABILITY AT ALL. 12. ON A CAREFUL READING OF THE ORDERS OF THE AUTHORITIES BELOW, WE OBSERVE THAT B EFORE THE ASSESSING OFFICER THE ASSESSEE HAS NOT FURNISHED THE COMPLETE DETAILS EVEN BEFORE THE LD.CIT(A) ASSESSEE FAILED TO FURNISH THE DETAILS IN RESPECT OF OUTSTANDING CREDITORS, THEREFORE, A DOUBT WOULD ARISE WHETHER THE ASSESSEE WAS IN A POSITON TO IDENTIFY ITS CREDITORS AT ALL. THEREFORE, WHEN THE ASSESSEE IS NOT IN A POSITION TO IDENTIFY EVEN THE CREDITORS IT IS OBVIOUS THAT THE ASSESSEE WILL NOT BE IN A POSITION TO ASCERTAIN WHETHER ANY PAYMENT IS TO BE MADE TO THE CREDITORS. THEREFORE, IN THE ABSENCE OF COMPLETE DETAILS , WE ARE NOT IN A P OSITON TO HOLD THAT THERE IS NO CESSATION OF LIABILIT Y AND AT THE SAME TIME WE ARE OF THE VIEW THAT THE WHOLE ISSUE HAS TO BE REEXAMINED BY THE ASSESSING OFFICER AFRESH AND ASSESSEE SHALL PROVIDE NECESSARY DETAILS IN RESPECT OF THE CREDITORS TO SUBSTANTIATE THAT THERE IS NO CESSATION OF LIABILITY AND ALL THE CREDITORS ARE IDENTIFIABLE. THUS, WE RESTORE THIS ISSUE TO THE FILE ASSESSING OFFICER 8 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED FOR D ENOVO ADJUDICATION AFTER PROVIDING ADEQUATE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. 13. THE NEXT ISSUE IN THE APPEAL OF THE ASSESSEE FOR THE A .Y. 2008 - 09 IS IN RES PECT OF CONFIRMING T HE DISALLOWANCE MADE U/S. 40 ( A ) (IA) OF THE ACT FOR NON - DEDUCTION OF TDS ON THE COMMISSION , MARKET CESS AND SUPER VISION FEES PAID TO SUB - AGENT. 14. THE ASSESSING OFFICER W HILE COMPLETING THE ASSESSMENT NOTICED THAT AS PER CLAUSE 17(7) , ANNEXURE H - 1 TO FORM 3CD , THE ASSESSEE MADE PAYMENT OF . 29,65,637/ - TOWARDS COMMISSION ON PROCUREMENTS AND .28,86,710/ - TOWARDS APMC TAX, ON WHICH NO TDS HAS BEEN DEDUCTED, THUS INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT THE ASSESSING OFFICE R DISALLOWED THE SAID AMOUNTS. THE LD.CIT(A) UPHELD THE DISALLOWANCE MADE U/S. 40(A)(IA) OF THE ACT. 15. BEFORE US , THE L D. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE PAYMENTS MADE TO SUB - AGENTS TOWARDS COMMISSION, MARKET CESS AND SUPERVISION FEES ARE FOR AND ON BEHALF OF THE GOVERNMENT OF MAHARASHTRA FOR ITS PROCUREMENT ACTIVITY, S INCE THE ASSESSEE IS IN THE ACTIVITY OF PROCUREMENT OF FOOD GRAINS AND DISTRIBUTION TO FARMERS. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT ASSESSEE WAS 9 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED APPOI NTED ONLY AS A CONSULTANT FOR PROCUREMENT ACTIVITY, WHATEVER THE AMOUNTS PAID BY THE ASSESSEE THEY ARE ALL REIMBURSEMENTS AND T HEREFORE THE PROVISIONS OF TDS AND CONSEQUENTLY SECTION 40(A)(IA) OF THE ACT HAVE NO APPLICATION FOR DISALLOWANCE OF SUCH PAYMENT S . IT IS SUBMITTED THAT THEY ARE ALL EXACT REIMBURSEMENTS AND THE TDS PROVISIONS HAVE NO APPLICATION. 16. FURTHER R EFERRING TO PAGE NO. 144 OF THE PAPER BOOK WHICH IS THE GOVERNMENT ORDER ISSUED FOR THE YEAR 2007 - 08 APPOINTING THE ASSESSEE AS CONSULTANT FOR PROCUREMENT, L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE IS ONLY CONSULTANT FOR PURCHASE OF DISTRIBUTION. REFERRING TO PAGE NO. 144 OF THE P APER BOOK , IT IS SUBMITTED THAT THE STATUTORY CHARGES , MARKET FEE AND SUPERVISION CHARGES @1.05% ON M SP HAS BEEN FIXED AS PER SANCTION BY THE CENTRAL GOVERNMENT . STATUTORY CHARGES , MARKET FEE AND SUPERVISION CHARGES AND THESE EXPENSES ARE IN THE NATURE OF STATUTORY LEVY AND T HEREFORE THE PROVISIONS OF SECTION 194H HAVE NO APPLICATION. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT THERE IS NO PROFIT ELEMENT IN THE CASE OF THE ASSESSEE AS THE ASSESSEE ENTITY IS ONLY A PASS THROUGH ENTITY AND ALL THESE ARE REIMBURSEMENTS, T HEREFORE TDS PROVISIONS HAVE NO APPLICAT ION. IN SUPPORT OF ITS CONTENTIONS ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS : - 10 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED (I) ITO V. ANKLESHWAR TALUKA ONGC LAND LOSER TRAVELERS CO - OPERATIVE SOCIETY [362 ITR 87 (GUJ)]. (II) M/S. KGL NETWORK (P) LTD., V. ACIT IN ITA.NO. 301/DEL/2018 DATED 02.07.20 18. (III) SHARMA KAJARIA & CO V. DCIT [145 TTJ (KOL) 1]. (IV) MITRA LOGISTIC (P.) LTD V. ITO [139 ITD 420]. 17. LD. DR VEHEMENTLY SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW. 18. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT O RDER WITHOUT EXAMINING AS TO WHETHER THESE PROVISIONS ARE APPLICABLE TO THE TRANSACTIONS OF THE PAYMENTS MADE BY THE ASSESSEE IN THE FORM OF SUB - AGENT COMMISSION, MARKET CESS AND SUPERVISION FEE, SIMPLY INVOK ED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR NON - DEDUCTION OF TDS AND MADE THE DISALLOWANCE. THE LD.CIT(A) SUSTAINED THE DISALLOWANCE HOLDING THAT THESE PAYMENTS SQUARELY FALL WITHIN PURVIEW OF DEFINITION OF COMMISSION AS DEFINED IN SECTION 194 H OF THE ACT. HE ALSO OBSERVED THAT IN RESPECT OF SUPERVISION CHARGES & CESS PAID TO APMC THEY ARE NOT IN THE NATURE OF STATUTORY LEVY IN THE FORM OF CESS AND T HEREFORE HE REJECTED THE CLAIM OF THE ASSESSEE THAT THE PROVISIONS OF SECTION 194H HAVE NO APPL ICATION. BEFORE US , IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THESE ARE ALL REIMBURSEMENTS, ASSESSEE IS ONLY A PASS THROUGH ENTITY, THERE IS NO PROFIT ELEMENT AND THE PAYMENTS ARE IN THE 11 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED NATURE OF STATUTORY LEVY AND IT HAS BEEN FIXED B Y THE CENTRAL GOVERNMENT. THE ASSESSEE IS ONLY APPOINTED AS A CONSULTANT FOR PROCUREMENT AND DISTR IBUTION AND T HEREFORE PROVISIONS OF SECTION 194H HAVE NO APPLICATION TO THE PAYMENTS MADE BY THE ASSESSEE. CONSEQUENTLY, NO DISALLOWANCE IS REQUIRED TO BE M ADE U/S. 40(A)(IA) OF THE ACT. NONE OF THESE CONTENTIONS OF THE ASSESSEE WERE EXAMINED BY THE LOWER AUTHORITIES , ESPECIALLY THE ASSESSING OFFICER HAS NOT EXAMINED THESE TRANSACTIONS AT ALL. HE HAS SIMPLE GONE BY FORM 3CD REPORT AND THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER. LD.CIT(A) ALSO WITHOUT ANY ELABORATE DISCUSSION AGREED WITH THE VIEW OF THE ASSESSING OFFICER. IN THE CIRCUMSTANCES , W E ARE OF THE CONSIDERED VIEW THAT THE WHOLE ISSUE HAS TO BE RE - EXAMINED BY THE ASSESSING OFFICER WITH REFERENC E TO THE SUBMISSIONS MADE BY THE ASSESSEE AND OUR ABOVE OBSERVATIONS AND KEEPING IN VIEW THE CASE LAWS ON THE SUBJECT. THUS, WE RESTORE THIS ISSUE TO THE FILE ASSESSING OFFICE R FOR D ENOVO ADJUDICATION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA.NO S. 2605 & 2599/MUM/2013 (A.Y S : 2006 - 07 & 2009 - 10) 19. THE GROUNDS OF APPEAL OF THE ASSESSEE FOR THE A .YS. 2006 - 07 & 2009 - 1 0 ARE AGAINST DISALLOWANCE MADE U /S. 40(A)(IA) OF THE ACT IN RESPECT OF MARKET CESS, SUPERVISION FEE AND SUB - AGENT COMMISSION. 12 ITA NOS. 2599, 2604, 2605 & 2606 /MUM/2013 (A.YS: 2009 - 10, 2008 - 09, 2006 - 07 & 2008 - 09) THE MAHARASHTRA STATE CO - OP . MARKETING FEDERATION LIMITED 20. SINCE FACTS ARE IDENTICAL TO THE ISSUE IN GROUND NO.2 OF GROUNDS OF APPEAL FOR A.Y. 2008 - 09 AND SINCE WE HAVE ALREADY RESTORED IDENTICAL ISSUE TO THE FIL E OF THE ASSESSING OFFICER FOR D ENOVO ADJUDICATION FOR THE ASSESSMENT YE AR 2008 - 09, THIS ISSUE FOR THE A .YS. 2006 - 07 & 2009 - 10 ALSO IS RESTORED TO THE FIL E OF THE ASSESSING OFFICER FOR D ENOVO ADJUDICATION . 21. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA.NO. 2604/MUM/2013 IS DISMISSED AND APPEALS IN ITA.NO S . 2599, 2605 & 2606/MUM/2013 ARE PARTLY AL LOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 31 ST DECEMBER, 2018 SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 31 / 12 / 2018 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM