M/s Recent Insurance Services Ltd., Agra V. Dy. C.I.T., Circle-4(1), Agra

ITA 276/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0476 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 11 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-05-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 15-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Principle of natural justice; Wrong claim; Onus to prove; TDS; Set aside
• Section: 143(3); 142(1); 133(6); 37(1); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 276 AGRA/ 2012 ASSESSMENT YEAR 2008-09 M/S RECENT INSURANCE SERVICES LTD. VS. DY. COM MISSIONER OF I.TAX, 48/108,PUNEET VRINDABAN, CIRCLE 4(1), SANJAY PLACE, AGRA AGRA (PAN AACCR8403K) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEEPENDRA MOHAN, C.A. RESPONDENT BY : SHRI WASEEM ARSHAD, SR. D.R. DATE OF HEARING : 09.05.2013 DATE OF PRONOUNCEMENT : 17.05.2013 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)- II, AGRA DATED 22.02.2012 FOR A.Y. 2008-09, CHALLEN GING THE DISALLOWANCE OF 30% OF THE EXPENSES, OUT OF CERTIFIED DATA PURCHASE D, REFERRAL FEES EXPENSES AND SALARY, WAGES AND BONUS. ITA NO.276/AGRA/2012 A.Y.2008-09 2 2. THE ASSESSEE FILED RETURN OF INCOME AT LOSS OF R S.58,31,542/-. THE A.O. ON CONSIDERATION OF FACTS AND MATERIAL BEFORE HIM OBSE RVED IN ASSESSMENT ORDER THAT ASSESSEE COMPANY IS A CORPORATE COMMISSION AGENT OF BAJAJ ALLIANZ AND HAS RECEIVED RS.10,60,95,656/- AS A COMMISSION COMPRISI NG FIRST YEARS COMMISSION, RENEWAL COMMISSIONS, ETC. IN LIEU OF INSURANCE BUSI NESS PROVIDED IT TO M/S. BAJAJ ALLIANZ. AS AGAINST RECEIPT OF RS.10,60,95,656/-, A SSESSEE COMPANY HAS INCURRED EXPENDITURE OF RS.11,15,29,056/- THEREBY THE COMPAN Y HAS CLAIMED LOSS OF RS.54,33,400/-. THE COMPANY IS NOT ENGAGED IN ANY K IND OF MANUFACTURING OF TRADING ACTIVITY BUT IT SIMPLY FACILITIES COMMISSIO N ON BEHALF OF BAJAJ ALLIANZ AND EVEN THEN THE COMPANY HAS INCURRED LOSSES OF RS.54, 33,400/-. FROM CAREFUL PERUSAL, IT IS LEARNT THAT OUT OF TOTAL EXPENSES OF RS.11,15,29,056/- THE MAIN EXPENSES RELATES TO MAINLY THREE HEADS I.E. (I) CER TIFIED DATA PURCHASE OF RS.70,36,440/- (II) REFERRAL FEE TO MEDICARERS.4,0 3,52,970/- AND (III) RS.4,49,63,429/- UNDER THE HEAD SALARY, WAGES AND B ONUS. TO UNDERSTAND THE NATURE OF BUSINESS AND THIS HEAVY EXPENSES INCURRED ON THE ABOVE THREE HEADS, STATEMENT OF SHRI RAM BABOO SINGH, MANAGING DIRECTO R OF THE ASSESSEE WAS ALSO RECORDED ON 05.10.2010. SHRI RAM BABOO SINGH HAS EX PLAINED OUT THE ENTIRE PROCESS OF DOING INSURANCE TO THE VARIOUS PERSONS. ITA NO.276/AGRA/2012 A.Y.2008-09 3 2.1 THE GIST OF THE STATEMENT IS THAT THE ASSESSEE IS A CORPORATE AGENT OF BAJAJ ALLIANZ LIFE INSURANCE CO. WHO IS PROCURING INSURAN CE POLICY. THE ASSESSEE HAS TAKEN AGENCY OF THE SAME AND THAT AFTER GIVING TRAI NING, THE ASSESSEE CALLS FOR REFERENCE FROM M/S SHIVA FUND TRUST AND THE PERSONS ARE COLLECTED IN THE GROUP OF 10/15 AND WHATEVER INFORMATION ARE PROVIDED BY T RAINED PERSONNELS, THE SAME WAS FILLED AND PROVIDED TO INSURANCE COMPANY IN FOR M. FOR REFERENCE, REFERRAL FEES IS PAID, WHATEVER REFERENCE ARE RECEIVED DIREC TLY FROM M/S SHIVA FUND TRUST, PAYMENTS ARE MADE ACCORDINGLY. SOME TIMES THE REFER ENCES ARE NOT MATURED, THEREFORE, SMALL EXPENSES ARE GIVEN. THE INFORMATIO N RECEIVED THROUGH DATA EVEN IF MATURE OR NOT THE PAYMENT IS TO BE MADE. FOR REF ERENCE FEE PAYMENTS ARE MADE THROUGH CASH AND CHEQUE AND SALARY IS PAID TO THE E MPLOYEES FOR WHICH COMPLETE DETAILS ARE MAINTAINED AND THOSE EMPLOYEES PROMOTED THE BUSINESS BY BRINGING PROSPECTIVE BUYERS. ALL PAYMENTS ARE MADE FOR GETTI NG INFORMATION FOR DOING THE BUSINESS ON COMMISSION BASIS. 2.2 FROM HIS STATEMENT, IT IS CLEAR THAT THE HEAVY SALARY EXPENSE OF RS.4,49,00,000/- IS ATTRIBUTABLE PRIMARILY TO THE P ERSONS WHO INFORMS THE PUBLIC AND PROMOTE THEM TO GET THEIR INSURANCE DONE, HOWEV ER, THE TREATMENT OF THE SAME UNDER THE HEAD SALARY DOES NOT SEEN APPROPRIATE. TH E DATA PURCHASE IS THE INFORMATION REGARDING THE PROSPECTIVE BUYERS. FURTH ERMORE, IT HAS BEEN EXPLAINED THAT REFERRAL FEE IS THE PAYMENT THAT RELATES TO TH E VARIOUS PERSONS WHO PROVIDE THE ITA NO.276/AGRA/2012 A.Y.2008-09 4 NECESSARY REFERENCES TO THE ASSESSEE ABOUT THE PROS PECTIVE BUYERS MEANING THEREBY THAT THE AMOUNT OF RS.9,23,52,839/-CLAIMED TO HAVE BEEN INCURRED ON THE PURCHASE OF INFORMATION OF THE PERSONS WHO MAY TURN OUT TO BE THE PROSPECTIVE CLIENTS OF THE ASSESSEE COMPANY. HENCE, AS AGAINST THE TOTAL RECEIPTS OF 10,60,95,656/- (WHICH INCLUDES AT LEAST RS.1.5 CROR E OF THE INSURANCE DONE IN PREVIOUS YEAR), THUS, AS AGAINST RS.9,10,95,656/- O F COMMISSION THE ASSESSEE HAS INCURRED RS.9,23,52,839/- ON THE PURCHASE OF INFORM ATION. THE EXPENSES ON ACCOUNT OF PURCHASE OF INFORMATION APPEARS TO BE EX CEEDINGLY HIGH SPECIALLY WHEN ASSESSEE DOES NOT HAVE ANY INFORMATION BANK OR DATA POOL AS CONCEDED BY SHRI RAM BABOO SINGH IN HIS STATEMENT ON OATH. AS R EGARDS THE ADMISSIBILITY OF EXPENSES IN THIS TRADE, REFERENCE IS ALSO INVITED T O A CIRCULAR NO.677DATED 28 TH JANUARY, 1994 WHICH READS AS UNDER :- THE BOARD IN CIRCULAR NO.594(F.NO.168/6/89-ITA-I D T.27 TH FEB.1991-(1991) 93 CTR (ST) 25 : TC 41S.783, AND CO RRIGENDUM DT.15 TH MAY, 1991) HAS GRANTED, SUBJECT TO CONDITIONS THER EIN SPECIFIED, BENEFIT OF ADHOC DEDUCTION FOR EXPENSES @ 50 PER CENT OF THE GROSS RECEIPTS OF COMMISSION, TO THE AUTHORIZED AGENT OF THE UNIT TRUST OF INDIA AND THE AGENTS OF THE SECURITIES SPE CIFIED IN THE CIRCULAR. THE BENEFIT OF ADHOC DEDUCTION IS AVAILAB LE ONLY WHERE NO DETAILED ACCOUNTS ARE MAINTAINED AND THE GROSS COMM ISSION RECEIVED BY THE AGENTS IS LESS THAN RS.60,000/-. 2. THE BOARD HAS RECEIVED REPRESENTATIONS FOR GRANT OF SIMILAR ADHOC DEDUCTION TO AGENTS OF MUTUAL FUNDS. 3. THE BOARD HAS CONSIDERED THESE REPRESENTATIONS A ND HAS DECIDED THAT THE BENEFIT OF AD HOC DEDUCTION FOR EX PENSES @ 50 PER CENT OF THE GROSS RECEIPTS OF COMMISSION BE GIVEN T O THE AGENTS OF ITA NO.276/AGRA/2012 A.Y.2008-09 5 THOSE MUTUAL FUNDS WHICH ARE NOTIFIED BY THE CENTRA L GOVERNMENT FOR PURPOSES OF S.10(23D) OF THE I.T. ACT, 1961.THE BENEFIT OF ADHOC DEDUCTION WILL ONLY BE AVAILABLE TO AGENTS NOT MAIN TAINING DETAILED ACCOUNTS FOR THE EXPENSES INCURRED BY THEM AND HAVI NG GROSS COMMISSION OF LESS THAN RS.60,000/- FOR THE YEAR, I NCLUDING GROSS COMMISSION AS AUTHORIZED AGENTS OF UNIT TRUST OF IN DIA AND AGENTS OF SECURITIES SPECIFIED IN BOARDS CIRCULAR NO.594 DT. 27 TH FEB. 191 AND CORRIGENDUM DT.15 TH MAY, 1991, AS WELL AS TOTAL COMMISSION FROM LIFE INSURANCE CORPORATION AS SPECIFIED IN BOA RDS CIRCULAR NO.648 [F.NO.168/13/93-ITA-1 DT.30 TH MARCH, 1993-(1993)111 CTR (ST) 1. 2.3 THE A.O. FURTHER OBSERVED THAT THOUGH THIS CIRC ULAR IS APPLICABLE IN THE CASES OF LIC AGENTS WHOSE COMMISSION IS UPTO RS.60, 000/-, THOUGH IN THE SAME TRADE, LEGISLATURE HAS RECOGNIZED 50% OF EXPENSES I N THIS BUSINESS. WHEREAS NOT ONLY THE ASSESSEE HAS INCURRED LOSS, SURPRISINGLY, THE AMOUNT EXPENT ON THE PURCHASE OF INFORMATION IS MORE THAN THE COMMISSION ITSELF. 2.4 THEREFORE, THE MOOT QUESTION IN THIS CASE IS GE NUINENESS AND VERACITY OF THE EXPENSES CLAIMED TO HAVE BEEN MADE FOR THE PURCHASE OF INFORMATION AND THE SAME HAS BEEN DONE IN THREE HEADS- 1. CERTIFIED DAT A PURCHASE, 2. EXPENSES RELATING TO SALARY AND 3. EXPENSES RELATING TO REFE RRAL FEE. AND THE EXPENSES UNDER THE EVERY HEAD WERE DEALT SEPARATELY BY A.O. IN ASS ESSMENT ORDER AS UNDER :- ITA NO.276/AGRA/2012 A.Y.2008-09 6 2.5 CERTIFIED DATA PURCHASE :- THE A.O. OBSERVED THAT ASSESSEE HAS PURCHASED DATA WORTH RS.70,36,440/- AND SPECIMEN OF DATA PURCHASED BY IT WAS FILED DURI NG THE ASSESSMENT PROCEEDINGS AND THE SAME IS AS UNDER: - S.NO. NAME ADDRESS CITY MOBILE NO. 1. ANJU BALA ARORA 2/7 M-S-20J.P.S. TUL GROVE POAD DELHI DELHI 9868217442 2. RAJ KUMAR A26 MCD COLONY A BLOCK SAMAYPUR DELHI DELHI 9210470189 3. RAMU SINGH F/108 KATWAIA SARAI NEW DELHI DELHI 9891652677 4. URMILA PANDAY 110A/3 KILOKA JANG POURA NEW DELHI DELHI 9718823881 5. MANOJ KUMAR D 293/18 J J COLONY MADANPUR KHADAR PHASE II NEW DELHI DELHI 9560934211 6. PRAVEEN KUMAR D 178/18 JJ COLONY MADAN PUR KHADA R PHASEII NEW DELHI DELHI 9910624124 7. MAHIPAL SINGH 1449/69A STREET NO.6 DURGA PURI SHAHDRA DELHI DELHI 9868205092 8. BIJENDER SINGH 1/154 SRI RAM NAGAR SHAHDRA DELHI DELHI 9811218036 9. YASHVIR SINGH H.NO.468 B 29 AZAD PUR VILL NEW DELHI. DELHI 9990478564 10. SANDHYA 228 BLOCK P 2 SULTANPURI NEW DELHI DELH I 9918423373 HOWEVER, FROM THE ABOVE TABLE, IT IS NOT UNDERSTOOD HOW THIS DATA CAN BE USED BY THE ASSESSEE AND WHY THE ASSESSEE WAS PAYIN G RS.50/- TO RS.75/- PER ITA NO.276/AGRA/2012 A.Y.2008-09 7 INFORMATION. THIS MUCH INFORMATION CAN BE EASILY BE COLLECTED FROM ANY GOVERNMENTAL AND PRIVATE SERVICE PROVIDING AGENCY L IKE MUNICIPAL CORPORATION, TELEPHONE DEPARTMENT, TATA YELLOW PAGES, TRADE DIRE CTORIES, ETC. THEREFORE, PRIMA FACIE THE GENUINENESS AND THE PURPOSE OF THE EXPENSES INCURRED BY THE ASSESSEE IS NOT VERY CLEAR SPECIALLY WHEN ASSESSEE ITSELF CONCEDED THAT EVEN IF THE ABOVE INFORMATION DOES NOT MATERIALIZE IN THE BUSIN ESS, ASSESSEE HAS TO PAY RS.50/- TO RS.75/- PER INFORMATION. FURTHERMORE, TH E INFORMATION HAS BEEN PURCHASED FROM M/S. SHIVA FUND TRUST, CONTROLLED, M ANAGED AND RUN BY THE BROTHER OF THE MANAGING DIRECTOR OF THE ASSESSEE CO MPANY RESIDING AT THE SAME ADDRESS WHOSE CREDENTIALS ARE ALSO UNDER DOUBT. THE REFORE, ASSESSEE COULD NOT FULLY EXPLAIN 1. THE CONTENTS AND UTILITY OF THE INFORMATION PURC HASED BY IT. 2. THE PROCESS BY WHICH THE SAME INFORMATION IS BEI NG UTILIZED BY IT. 3. THE SOURCE OF INFORMATION IS NOT VERY CLEAR AND THE CREDENTIAL OF THE SUPPLIES OF INFORMATION IE. M/S. SHLVA TRUST IS ALSO UNDER SEVERE DOUBT. THEREFORE, ASSESSEE COULD NOT SUBSTANTIATE THE ABOV E EXPENSE UNDER THE HEAD DATA PURCHASE. 2.6 EXPENSES RELATING TO SALARY OF RS.4,49,00,000/ THE A.O. FURTHER NOTED THAT ANOTHER HEAD OF PROCUR EMENT OF INFORMATION RELATES TO THE SALARY. THE ASSESSEE HAS DEBITED IN ITS PROFIT & LOSS ACCOUNT AN ITA NO.276/AGRA/2012 A.Y.2008-09 8 AMOUNT OF RS.4,49,63,429/- UNDER THE HEAD SALARY & WAGES. VIDE SHOW-CAUSE DATED 16.12.2010, THE ASSESSEE WAS REQUIRED TO FURN ISH THE VOUCHERS RELATING TO ALL EXPENSES, BUT NO VOUCHER TO SUBSTANTIATE THE PAYMEN T OF SALARY HAS BEEN PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THEREB Y PRECLUDED THE OFFICE TO VERIFY THE GENUINENESS OF THE EXPENSES UNDER THIS H EAD AS CLAIMED BY THE ASSESSEE. HOWEVER, FORM 16 ISSUED TO 75 PERSON WHER EIN THE SALARY DISBURSEMENT OF RS.1,42,36,179/- HAVE BEEN SHOWN WERE PRODUCED A LONG WITH ANNEXURE C-1. IN ANNEXURE C-1, DETAILS OF SALARY UNDER THE FOLLOW ING THREE HEADS HAVE BEEN SHOWN:- HEAD AMOUNT A. SALARY 1 RS.21,87,334/- B. SALARY- II RS.3,29,75,227/- C. SALARY-III RS.63,55,823/- 2.7 THE AMOUNT SHOWN UNDER THE HEAD SALARY-I AT RS. 21,87,334/- IS COVERED BY THE PROVISIONS OF PF/ESI. HOWEVER, ON THE REMAINING AMOUNT OF RS.3,29,75,227/- AND RS.63,55,823/- HAS NOT BEEN SUBJECTED TO PF AND ESI DEDUCTIONS. FROM THE PERUSAL OF THE DETAILS OF THIS AMOUNT FURNISHED IN PAGE NO.6 TO 230 OF THE ANNEXURE C-1, IT IS SEEN THAT RS.3,51,62,561/- HAVE BEEN DIS TRIBUTED BY THE ASSESSEE IN THE GARB OF SALA RY PAYMENT THROUGH ABOUT 12000 ENTRIES . FROM THE INFORMATION ITA NO.276/AGRA/2012 A.Y.2008-09 9 AVAILABLE IN ANNEXURE C-1, IT CANNOT BE ASCERTAINED WHETHER THESE 12000 ENTRIES PERTAIN TO 12000 PERSONS OR LESS THAN THAT. HOWEVER , THE AMOUNT OF SALARY SHOWN TO HAVE BEEN PAID THROUGH EACH ENTRY WAS FOUND WITH IN THE RANGE OF RS.2,000/- TO RS.8000/-. NO VOUCHER TO SUBSTANTIATE THE PAYMENT S HOWN IN THESE ENTRIES HAS BEEN PRODUCED DURING THE COURSE OF ASSESSMENT. FURT HER, ASSESSEE ITSELF HAS MADE THE PAYMENT UNDER SALARY FOR THE PROCUREMENT OF INF ORMATION PRIMARILY IN THE NATURE OF COMMISSION AND NO TDS AS PER THE PROVISIO N OF SECTION 194H HAS BEEN COMPLIED WITH. FOR AN ARGUMENT, IF IT IS A SALARY, NO PF/ESI HAS BEEN DEDUCTED FROM THIS AMOUNT, IN SUCH CIRCUMSTANCES, RS.3,51,62 ,561/- REMAINED UNSUBSTANTIATED. 2.8 EXPENSES RELATING TO REFERRAL FEE THE A.O. FURTHER NOTED THAT THE THIRD HEAD FOR THE PROCUREMENT OF INFORMATION RELATES TO THE REFERRAL FEE. THERE ARE INNUMERABLE ACCOUNTS RELATING TO THE PAYMENT TO REFERRAL FEE THOUGH A SINCERE EFFORT WAS MADE TO ARRIVE AT THE QUANTUM OF THE POSSIBLE EXPENSES INCURRED BY THE AS SESSEE IN THIS BUSINESS OF COMMISSION UNDER THE HEAD PAYMENT TO REFERRAL FEE. TO VERIFY THE GENUINENESS OF REFERRAL FEE, ASSESSEE WAS ASKED TO PRODUCE VOUCHER S OF ANY BRANCH OF ITS CHOICE SINCE MOST OF THE PAYMENTS HAVE BEEN MADE THROUGH C ASH AND IT APPEARED THAT LOT OF PEOPLE HAVE BEEN PAID REFERRAL FEE BY THE ASSESS EE COMPANY. DURING THE PROCESS OF EXAMINATION OF THE PAYMENTS MADE UNDER R EFERRAL FEE, 14 SHOW-CAUSES ITA NO.276/AGRA/2012 A.Y.2008-09 10 WERE ISSUED TO THE ASSESSEE ON THE DISCREPANCIES NO TED AFTER CAREFUL PERUSAL OF THE VOUCHERS SUBMITTED BY IT AND THE SUM AND SUBSTANCE OF EACH SHOW-CAUSE IS AS UNDER:- SHOW CAUSE NO.1, 2 & 3: FROM PERUSAL OF THE VOUCHER S FURNISHED BY THE ASSESSEE OF MAINPURI UNIT, IT WAS LEARNT THAT THE S IGNATURE OF THE RECIPIENTS WERE NOT AVAILABLE ON THE VOUCHERS, THEREFORE, ASSESSEE WAS ASKED TO EXPLAIN MAILING ADDRESS OF THE 16, 33 AND 20 PERSONS RESPECTIVELY M ENTIONED IN THE SHOW-CAUSES. THE ASSESSEE IN ITS REPLY STATED THAT PAYMENTS WERE MADE TO THE TEAM LEADER NOT TO THE PERSONS CONCERNED. SHOW CAUSE NO.4 & 6: IN THESE SHOW CAUSES THE ASSES SEE WAS ASKED TO FURNISH THE MAILING ADDRESS OF THE 126 AND 18 PERSO NS RESPECTIVELY WHO HAD NOT RECEIVED THE PAYMENT BUT SOMEBODY ELSE HAD RECEIVED ON THEIR BEHALF AND THE COMPANY WAS ASKED TO SPECIFY THE DETAILS OF WORK DO NE BY THE ABOVE PERSONS. THE ASSESSEE IN ITS REPLY STATED THAT THE PAYMENTS WERE MADE TO THE TEAM LEADER, FURNISHED THE MAILING ADDRESS BUT COULD NOT SPECIFY THE NATURE OF SERVICE RENDERED BY THE PERSONS MENTIONED IN THE SHOW CAUSES. SHOW CAUSE NO.7, 8 & 9: IN ADDITION TO THE ABOVE IN FORMATION, IN THESE SHOW CAUSES THE ASSESSEE WAS ASKED TO PRODUCE 112, 90 & 82 PERSONS RESPECTIVELY MENTIONED IN THE SHOW CAUSES WHO HAD NOT RECEIVED T HE PAYMENTS DIRECTLY BUT ITA NO.276/AGRA/2012 A.Y.2008-09 11 SUPPOSEDLY THROUGH SOMEBODY ELSE AS STATED IN FOREG OING PARAS. THE ASSESSEE IN ITS REPLY REITERATED THE SAME THAT THE PAYMENT WAS RECEIVED BY THE TEAM LEADER BUT NO PERSON WAS PRODUCED BY IT FOR THE EXAMINATION. SHOW CAUSE NO.10, 12 & 14: IN ADDITION TO THE INFOR MATION SOUGHT IN THE EARLIER SHOW CAUSES, THIS TIME ASSESSEE WAS ASKED T O PROVIDE ACKNOWLEDGEMENT OF THE RECEIPT OF THE PAYMENT IN ADDITION TO THEIR MAI LING ADDRESSES, REASON FOR NOT MAKING PAYMENT DIRECTLY AND TO PRODUCE THEM FOR EXA MINATION IN THE CASES OF 38, 172 & 487 PERSONS RESPECTIVELY. BUT THIS TIME ALSO, THE ASSESSEE COULD NOT PRODUCE ANY OF THE PERSONS MENTIONED IN THE SHOW-CA USES AND VERY FEW ACKNOWLEDGEMENT OF THE RECEIPT OF THE PAYMENT WERE FURNISHED BY IT. AS A RESULT OF THIS EXERCISE OF EXAMINATION OF THE VOUCHERS OF REFERRAL FEE, IT IS LEARNT THAT (I) ALMOST ALL THE PAYMENT HAVE BEEN MADE IN CASH T HROUGH SELF-MADE VOUCHERS, WHICH ARE NOT OPEN FOR VERIFICATION, (II) FURTHER, IT HAS ALSO BEEN OBSERVED THAT ON THE 75% OF VOUCHERS OF REFERRAL FEE, THE PAYMENT HAS NOT BEEN MADE DIRECTLY TO THE PERSON TO WHOM THE PAYMENT HAS BEEN SHOWN IN THE BOOKS OF ACCOUNT BUT TO A PERSON OTHER THAN HIM (III) IT HAS ALSO BEEN GATHERED THAT THE PERSON WHO HAS RECEIVED THE PAYMENT ON BEHALF OF OTHER HAS NO AUTHORITY TO RECEIVE THE SA ME. ITA NO.276/AGRA/2012 A.Y.2008-09 12 (IV) ASSESSEE COULD NOT PRODUCE PERSONS FOR THE EXA MINATION BEFORE AO. (V) ASSESSEE COULD NOT FILE THE ADEQUATE ACKNOWLEDG EMENTS OF THE RECEIPT OF PAYMENT IN ALL THE CASES WHICH WERE TAKEN UP FOR TH E DETAILED SCRUTINY. 2.9 SINCE THE ASSESSEE COULD NOT FURNISH THE PERSON S OR ACKNOWLEDGEMENT OF RECEIPT OF PAYMENT, THEREFORE, AO WAS CONSTRAINED T O MAKE THE INDEPENDENT INQUIRY AND NOTICES U/S.133(6) WERE ISSUED TO THE F OLLOWING PERSONS ON RANDOM BASIS ON THE TOTAL ADDRESSES OF 1012 PERSONS FURNIS HED BY THE ASSESSEE ON 29.11.2010: 1. SHRI KAPIL KUMAR, G-102, SECTOR-56, NOIDA. 2. SHRI UDAI TRIPATHI, 5/50, BAG KUNCHA, FARRUKHABA D. 3. M/S.REKHA TRIPATHI, 19-A, ARUNA NAGAR, ETAH. 4. M/S.ARCHANA CHAUHAN C/O G.S. CHAUHAN, MURLI VIHA R, AIRFACE, TATA GATE, AGRA 5. MS. MITHLESH CHAUHAN, G-97, SECTOR 56, GAUTAM BU DH NAGAR, NOIDA. 6. SHRI NARESH KUMAR, HOUSE NO.331, NEW BASTI DEVPU RA, MAINPURI- 205001 7. MS. CHITRA GUPTA, 151, A.K. BLOCK, YASODA NAGAR, KANPUR. 8. SHRI TOTA RAM, 4/64, AVAS VIKAS COLONY, MAINPURI . 9. MS. VIMLA DUBEY, 138, RAJIV NAGAR, MOHAMMADABAD, FARRUKHABAD. ITA NO.276/AGRA/2012 A.Y.2008-09 13 10. MS. NAMITA PARIZA, 12-B, PATEL NAGAR, STAR COLO NY, INDIRA NAGAR, LUCKNOW. 11. MS. MANJU, 422C BLOCK PANKI, KANPUR (NEAR RAILW AY STATION) 208020. 12. SHRI VINOD KUMAR KATIYAR, HOUSE NO.187, GALI NO .6, SURYA VIHAR PART- 2, SANJAY COLONY, SEHATPUR, FARIDABAD. 13. MS. KUNTI DWEODI, 125, PUROHITANA, MAINPURI. 14. MS. SUNITA SHARMA, 20-B, SHANTI NAGAR, ETAH. 15. SHRI BRAHM DUTT SINGH, 285, ASHOKA NAGAR, PURAN I PAC GALI NO.6, ETAWAH. 16. MS. POOJA DIXIT, 36-A/23-B, KIRTI NAGAR, DEFENC E COLONY, AGRA 17. SHRI YOGESH CHANDRA DUBEY, C-14, NAHAR COLONY, MOHAMMADABAD DISTT. (SITAPUR) 18. SHRI PRADEEP KUMAR, H.NO.209, GALI NO.3, ASHOKA VIHAR, GURGAON, HARAYANA. 19. MS. RANJANA SINGH, 371/21-A, BAADSHAH NAGAR, OL D ROY BIHARI LAL ROAD, LUCKNOW. 20. MS. LAXMI SHAKYA, 9/3565K, H.NO.139, DUNDALA CH OWK, GALI NO.DHARMPURA, GANDHI NAGAR. 21. PANKAJ SINGH CHAUHAN, 1258, RATAN LAL NAGAR, KA NPUR . ITA NO.276/AGRA/2012 A.Y.2008-09 14 22. SHRI UMESH KUMAR, GF-267, HOUSING BOARD COLONY, SECTOR-48, GURGAON, HARYANA-122001 23. PRASHANT SHUKLA, 7-B, FRIENDS COLONY, ETAWAH. 24. SHRI RAJENDRA KUMAR PANDEY, 202 HAR MUKHPUR, MO DI NAGAR, AGRA 2.10 FURTHER, SUMMONS U/S. 131 OF I.T. ACT WERE ALS O ISSUED ON 25.11.2010 TO VERIFY THE GENUINENESS OF REFERRAL FEE: 1. SHRI VINOD KUMAR, VILLAGE TAJPUR TIGURA P.O. SHA LI PUR, TAHALA (ETAH) 2. MS. RANJANA, RADHAKRISHNA MOHALLA (PAKKA BAG), A LIGANJ DISTT. (ETAH). 3. SHRI RAVINDRA NATH PANDEY, RAILWAY ROAD AHATA SA TH DAULAT RAM, KASGANJ (ETAH) 4. MS. SANGEETA SHAKHWAR, VILLAGE TAMORI POST TAKHA DISTT. (ETAWAH). 5. SHRI BRIJ PAL SINGH NAGAR KHARAG P.O. PURAILA DI STT. ETAWAH 6. SHRI PREMPAL SINGH VILLAGE NAGLA BODILA, P.O. KH ERIA PATIKARA, FIROZABAD. 7. SHRI DHARAM PAL SINGH NAGLA BODILA POST KHERIA P ATIKARA DISTT. FIROZABAD 8. SHRI SANJEEV KUMAR BAPUR NAGAR, ETAH. 9. MS. GIRJA DEVI, BHARTIYA NAGAR NEAR SISHU MANDIR , ETAH-207001 10. SHRI SANTOSH PANDEY, VILLAGE & POST BARNA DISTT . ETAH 207247 11. SHRI RAJ KUMAR VILLAGE GARIYA (KHERARA) POST DA L SHAK (ETAH) 12. NIRMAL CHAND TIWARI 22/5, RAJA GANJ, BHARTHANA ETAWAH. ITA NO.276/AGRA/2012 A.Y.2008-09 15 13. SHRI DAUSHAL PRATAP SINGH VILLAGE NAGLA BALDEV ETAH-207246 14. MS. ANUPAMA MISHRA, 81-A, MAITRI BAGH, AGRA 15. MS. SHEELA SHAKYA, MALAWAR DISTT. (ETAH) 16. SHRI RAHUL SHAKYA, VILLAGE POST SARIAGHAT DISTT . (ETAH) 2.11 THESE SUMMONS AND LETTER U/S.133(6) OF THE I. T. ACT WERE SENT THROUGH SPEED POST AT THE ADDRESS GIVEN BY THE ASSE SSEE IN ITS REPLIES. IN RESPONSE TO THESE, 40 SUMMONS/LETTERS, THE REPLIES OF THE FO LLOWING PERSONS WERE RECEIVED IN THE OFFICE: 1. SMT. SANGEETA SHANKWAR - SHE REPORTED IN HER AFF IDAVIT DATED 08.12.2010 THAT SHE HAD RECEIVED RS.2,152/-- AS COMMISSION FRO M M/S.RECENT INSURANCE COMPANY LTD. AS SHE HAD INSURED TWO PERSO NS. HENCE, IT CANNOT BE SAID THAT SMT. SHANKWAR HAD RECEIVED ANY REFERRA L FEE. 2. SHRI NINNAL CHAND TIWARI - IN HIS AFFIDAVIT SHRI TIWARI HAS STATED THAT HE HAD RECEIVED RS.1,000/-, HOWEVER, FOR WHAT REASONS THIS PAYMENT HAS BEEN RECEIVED HAD NOT BEEN DISCLOSED BY HIM. HENCE, IT C ANNOT BE SAID THAT ANY PAYMENT IN THE SHAPE OF REFERRAL FEE HAD BEEN RECEI VED BY SHRI TIWARI. 3. SHRI YOGESH CHANDRA DUBEY - IN HIS REPLY DATED 0 8.12.2010, SHRI YOGESH CHANDRA DUBEY HAS STATED THAT HE HAD RECEIVED COMMI SSION OF RS.2,153/- THUS, THIS PAYMENT CAN ALSO NOT BE TREATED AS REFER RAL FEE. ITA NO.276/AGRA/2012 A.Y.2008-09 16 4. SMT. REKHA TRIPATHI - VIDE HER LETTER DATED 06.1 2.2010, SMT. TRIPATHI HAS INFORMED THAT DURING THE PERIOD MARCH, 2006 TO JUNE , 2008 SHE WORKED AS AN AGENT OF M/S RECENT INSURANCE SERVICES LTD AGRA (CORPORATE AGENT) AND HAD PURCHASED 4 ULIP POLICIES FOR HER FAMILY ME MBERS AND AGAINST THESE POLICIES. M/S RECENT INSURANCE SERVICES LTD A GRA HAD PROVIDED ME RS.18 TO 20 THOUSAND AS COMMISSION THROUGH SHRI JIT ENDRA KUMAR SHAKYA. HENCE IT CANNOT BE SAID THAT SMT REKHA TRIPHATI HAD RECEIVED ANY 'REFERRAL FEE. 5. SMT RANJANA SINGH - SMT RANJANA SINGH ALSO INFOR MED THAT SHE HAD RECEIVED RS.1390/- AS COMMISSION WHICH CANNOT BE TR EATED AS REFERRAL FEE. 6. SHRI UDAY TRIPHATHI - SHRI UDAY TRIPHATHI HAS CO NFIRMED THAT HE HAD RECEIVED RS.1,959/- ON 31.12.2007 ALONG WITH THE RE PLY HE HAS ALSO ATTACHED A T.D.S. CERTIFICATE WHERE IN THE NATURE O F PAYMENT HAS BEEN SHOWN AS 'INSURANCE' AND NOT THE REFERRAL FEE, HENC E IT CANNOT BE DEFINITELY SAID THAT SHRI TRIPHATHI HAD RECEIVED ANY 'REFERRAL FEE' OR THE COMMISSION. 2.12 FROM THE REPLIES OF THE WITNESSES MENTIONED AB OVE, IT CAN BE SAFELY CONCLUDED THAT OF THE TOTAL 39 NOTICES/ SUMMONS ISS UED BY THIS OFFICE ONLY 6 PEOPLE HAD REPLIED THAT THEY HAVE RECEIVED THE MONE Y FROM THE ASSESSEE COMPANY AND AMONG THE 6 ONLY ONE PERSON HAS CONFIRMED THAT TDS WAS DEDUCTED BUT EVEN ITA NO.276/AGRA/2012 A.Y.2008-09 17 IN THAT CASE IT IS ALSO NOT CLEAR THAT TDS WAS DEDU CTED CORRECTLY ON THE PAYMENT MADE. THEREFORE, IT IS SAFELY CONCLUDED THAT THE CO MPLIANCE ON THE BASIS OF ENQUIRY INITIATED BY THIS OFFICE IS NOT MORE THAN 3 %. 2.13 FURTHERMORE, THE ADMISSIBILITY OF COMMISSION IN THI S TRADE IS ALSO NOT ALLOWED AS PER THE SECTION 41 OF INSURANCE ACT 1938 PROHIBITS THE ASSESSEE TO PROVIDE ANY TEMPTATION TO ANY BODY FOR KEEPING IN F ORCE THE INSURANCE OF LIFE OR GOODS. THE PROVISION OF THIS SECTION DOES NOT ALLOW A PERSON TO GIVE ANY DISCOUNT FOR PROCURING INSURANCE BUSINESS. IN CASE OF NON-CO MPLIANCE OF THESE PROVISIONS PENALTY UP TO RS.500/- CAN BE IMPOSED. SINCE THE AS SESSEE HAD PAID THE COMMISSION NOT THE REFERRAL FEE FOR GETTING THE INS URANCE BUSINESS FROM THE AFORESAID PERSONS, HENCE IT CANNOT BE ALLOWED UNDER THE HEAD 'REFERRAL FEE'. THEREFORE, ASSESSEE COULD NOT DISCHARGE ITS ONUS BY STATING THAT WHY THE SAME DOES NOT FALL WITHIN THE EXPLANATION OF 37(1) OF TH E ACT. 2.14 NOW COMING TO THE CASES WHERE NO CONFIRMATION WAS RECEIVED IN COMPLIANCE OF LETTER U/S 133(6) OF IT ACT SUMMONS U /S 131 OF IT ACT RETURNED UNSERVED FOR REASON GIVEN AGAINST THEM :- NAME OF THE PERSON WHETHER LETTER U/S 133(6) OR SUMMONS U/S 131 OF THE IT ACT RETURNED WITH POSTAL REMARK M/S MANJU, R/O 422 C BLOCK PANKI (NEAR RAILWAY STATION), KANPUR LETTER U/S 133(6) OF IT ACT DT 29.11.2010 422-C MEIN IS NAM KA KOI NAHI HAI SHRI PRADEEP KUMAR, H.NO.GALI NO.3, ASHOK VIHAR GARGAON HARYANA DO IS NAM KA KOI NAHIN ITA NO.276/AGRA/2012 A.Y.2008-09 18 M/S VIMAL DUBEY, PATA 38 RAJIV NAGAR MOHAMDABAD FARUKHABAD DO PRAPTKARTA KA NAHIN SUNITA SHARMA, 20-B SHANTI NAGAR ETAH DO PRAPT KARTA AGRA HAI M/S NAMITA PARIZA, 12-B PATEL NAGAR, STAR COLONY, LUCKNOW DO REFUSED LAXMI SHAKYA, 9/3565 KH.NO.139 DUNDALA CHOCK DHARPOURA GANDHI NAGAR. DO RETURNED UNSERVED VINOD KUAMR KATIYAR H.NO.187 GALI NO.6 SURYA VIHAR PART-2 SANJAY COLONY SEHAT PUR FARIDABAD DO PUCHTACH KARNE PAR PRAPT KARTA NAHIN MILA SHRI UMESH KUMAR G.F. 267 HOUSING BOARD COLONY SECTOR 48, GURGAON HARYANA 122001 DO ADHORA PATA YEH SCII MEIN NAHIN HAI ATHA VAPAS SHRI TOTA RAM, 4/64 AVAS VIKAS, COLONY MAINPURI DO 4/64 NO. KA PLOT KHALI PADA HAI KRIPYA SAHI PATA LIKH KAR BHAJE KUSHAL PRATAP SINGH VILLAGE NAGLA BALDEV ETAH DO INCOMPLETE M/S RANJANA RADHA KRISHAN MOHALLA (PAKKA BAGH) DISTT ETAH DO ADHURA PATA PRESHAK KO VAPIS SHRI RAJ KUMAR, VILLAGE GARIYA (KHERARA) POST DAL SHAH DISTT ETAH DO PRAPT KARTA BAR-2 JANE PAR MALTE NAHI HAI SHRI SANJEEV KUMAR, BAPU NAGAR ETAH DO PATA ADHURA HAI M/S GIRJA DEVI, BHARTIYA NAGAR NEAR SISHU MANDIR ETAH DO PATA ADHURA HAI 2.15. IN THE CASE OF SHRI BRAHM DUTT SHARMA R/O 28 5 GALI NO.6 PURANI PAO ASHOKA NAGAR ETAWAH, IT HAS BEEN STATED BY HIM THAT 1 VKIDS UKSFVL ES CZGNRRK FLAG FY[KK GS TCFD ESJK U KE CZGENRRK KEKZ] FUOKLH&285] VKKSD UXJ] IQJKUH IH0,0LH0 XYH UA6 BVK OK GSZ A 2 ;G FD ESA XKSMDSFQFYIL BF.M;K FY0 UBZ FNYYH ESA F OXR OKKSZA LS UKSDJH DJ JGK GWWA A 3 ;G FD ESUS ESLLZ JHLSUV BUKKSJSAL LFOZL FY0 VKXJK ESA U GH UKSDJH DH GS VKSJ U GH DHKH DEHKU CSL IJ DKSBZ DK;Z UGHA FD;K G S A 4 ;G FD ESUS FORRH; OKZ 2007&08 ESA RFKK IWOZ ESA ,OA HKFO; ESA DHKH HKH DKSB DEHKU OSRU VKFN HKQXRKU IZKIR UGHA FD;K GS A ITA NO.276/AGRA/2012 A.Y.2008-09 19 5 ;G FD RFKK DFFKR CZG~ENRR FLAG US VIUK IRK GEKJS FUOKL IJ YXKDJ /KKS[KK N;KUH ,OA 420 LH DH GS RFKK HKQXRKU IZKIR D J FY;K GKSXK BLDH EQZ>S DKSBZ TKUDKJH UGHA GS A BHAVDIYA SD/- (BRAHM DUTT SHARMA) 2.16 IT WAS FURTHER NOTED THAT THE PERUSAL OF ANNE XURE A-6 FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND THAT THE ASSESSEE HAD SHOWN THE PAYMENT AGAINST REFERENCE ON 14.10.2007 T O SHRI GYAN SINGH AND NOT TO SHRI BRAHM DUTT SHARMA. SINCE SHRI BRAHM DUTT SH ARMA HAD NOT PROVIDED ANY SERVICES TO THE COMPANY THERE APPEARS TO BE NO REAS ON FOR MAKING ANY PAYMENT TO HIM THROUGH SHRI GYAN SINGH. THE ONLY INFERENCE WHI CH CAN BE DRAWN FROM THE ABOVE IS THAT THE ASSESSEE HAD INFLATED ITS BUSINES S EXPENSES BY ADOPTING SUCH BOGUS DEVICES. IN COMPLIANCE OF SUMMONS U/S.131 SHR I RAVINDRA PANDEY R/O AHATA DAULT RAM RAILWAY ROAD KASGANJ TO WHOM THE AS SESSEE HAS SHOWN THE PAYMENT OF REFERRAL FEE HAS STATED AS UNDER :- ;G FD IZKFKHZ DK PAN NO.AGXPP4063H G BLDH NK;KIZFR LAYXU GS ,OA IZKFKHZ TQYKBZ 2006 LS JSYOS DH LSOKVKSA LS LSOKFUO `RR GQVK FKK A VR% A.Y.0809 LAXR F.Y 07-08 ESA DSOY ISAKU DH VK; FKH FTLDK FOOJ.K LAYXU GS ;G GS FD IZKFKHZ FORRH; OKZ 2007&08 ESA JHLSAV BL; KSJSUL FY0 VKXJK DS }KJK DKSBZ FU;KSTU UGHA FD;K X;K GSA ;FN BL LECU/K ESA DKSBZ RF; GKS RKS IZKFKHZ DKS LWFPR DJUS DH D`IK DJS A ;G GS FD IZKFKHZ 64 OKZ DK CQTQXZ O;FDR GS ,OA KK JHFJD :IK LS VKUS-&TKUS ESA L{KE UGHA GS ,OA IZKFKH Z DH UOECJ]08 ESA G`N; DH CKBZIKL LTZJH HKH GKS PQDH GS VR% FDLH IZDKJ DK RUKO LGUS DH {KERK UGHA GS A ITA NO.276/AGRA/2012 A.Y.2008-09 20 VR% IZKFKZUK GS FD IZKFKHZ DKS O;FDRXR MIFLFKR DKS EKQ DJRS GQ, LIVHDJ.K LOHDKJ DJUS DH D`IK DJSA A DATE : 04.12.2010 SUBEKSHU RAVINDRA NATH PANDEY AHATA DAULAT RAM RAILWAY ROAD KASGANJ JILA KASHI RAM NAGAR (U.P.) 2.17. FROM THE ABOVE REPLY, IT IS QUITE EVIDENT TH AT THE PAYMENT AS REFERRAL FEE SHOWN TO HAVE MADE BY THE ASSESSEE TO SHRI RAVINDRA NATH PANDEY IS BOGUS. 2.18. NOW COMING TO THE GENUINENESS OF THE ACKNOWLE DGMENT FILED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S 142(1) IN RESPEC T OF THE PAYMENT SHOWN TO HAVE MADE AS REFERRAL FEE EXPENSES. IN COMPLIANCE THERET O, THE ASSESSEE HAS FURNISHED FEW CONFIRMATIONS. A PERUSAL OF THESE CONFIRMATIONS REVEAL THAT THESE WERE NOT THE ACTUAL ACKNOWLEDGEMENTS OF THE PERSON TO WHOM T HE REFERRAL FEE PAYMENT HAS BEEN SHOWN. FROM THE CLOSE PERUSAL OF THESE CON FIRMATIONS FILED BY THE ASSESSEE, THE FOLLOWING FACTS HAVE EMERGED- A) FROM THE COMPARISON OF CONFIRMATION LETTERS DAT ED 29.11.2010 OF DURBESH KUMAR (CODE NO. 30292) AND BRIJESH KUMAR IT APPEARS THAT THE SIGNATURE ON BOTH THE HAVE BEEN MADE BY A SINGLE PERSON. B) SIMILARLY THE SIGNATURE ON THE CONFIRMATION LET TERS DATED 25.11.2010 RECEIVED ON 06.12.2010 IN THE OFFICE IN RESPECT OF SHRI SATYA PAL SINGH (CODE ITA NO.276/AGRA/2012 A.Y.2008-09 21 31454) AND SHYAM VEER SINGH (CODE 16638) THE SIGNAT URE. HAND WRITINGS APPEAR TO BE OF A SAME PERSON. C) THE SIGNATURE OF MAMTA MISHRA (CODE 20277) AND SHRI PRAMOD KUMAR MISHRA (CODE 207249) APPEARS TO BE DONE BY A SINGLE PERSON. D) THE SIGNATURE ON THE CONFIRMATION LETTERS OF SH EKAHER DIWEDI AND AVINASH KUAMR DIWEDI (25440) APPEARS TO BE DONE BY A SINGLE PERSON. E). THE SIGNATURE DATED 11.08.2007 SHRI VINOA KUMA R SINGHAL (CODE NO.16049) MADE ON BUSINESS STATEMENT FILED DURING T HE ASSESSMENT PROCEEDINGS DOES NOT TALLY WITH THE SIGNATURE MADE ON THE CONFI RMATION LETTER DATED 25.11.2010. F) THE SIGNATURE OF LATA PANDEY (CODE NO. 26024) L ETTERS DATED 29.11.2010 DOES NOT TALLY WITH THE RECEIPT VOUCHER DATED 12.09 .2007. 2.19 AFTER DOING ALL THIS EXAMINATION BY WAY OF NOT ICES AND SUMMONS AND CAREFUL PERUSAL OF THE ACKNOWLEDGMENT FILED BY THE ASSESSEE, A FINAL SHOW CAUSE NOTICE U/S 142(1) OF IT ACT DATED 16.12.2010 FIXING THE DATE 21.12.2010 WAS ISSUED TO THE ASSESSEE. IN COMPLIANCE THERE TO THE ASSESSEE HAS FURNISHED A REPLY DATED 21.12.2010, WHEREIN CERTAIN CONTENTIONS HAVE BEEN RAISED AND THE SAME ARE CONSIDERED AS UNDER :- ITA NO.276/AGRA/2012 A.Y.2008-09 22 A. WITH REGARD TO THE OBJECTION THAT SUMMONS WERE ISSUED TO THE PERSONS WHO HAD RECEIVED THE NOMINAL AMOUNT OF REFE RRAL FEE, IT IS CLARIFIED THAT ALMOST IN ALL CASES THE AMOUNT SHOWN TO HAVE BEEN P AID AS REFERRAL FEE IS VERY NOMINAL AS PER THE VOUCHERS FURNISHED BY TILE ASSES SEE, MOREOVER, DURING THE ENTIRE PROCEEDINGS OF ASSESSMENT THE ASSESSEE HAD N OT FURNISHED ALL THE VOUCHERS PERTAINING TO REFERRAL FEE EXPENSES. SINCE ASSESSEE ITSELF HAS FURNISHED THE VOUCHERS OF NOMINAL PAYMENT OF REFERRAL FEES, THERE FORE THE REVENUE HAS NO OTHER ALTERNATIVE BUT TO VERIFY THE GENUNINENESS OF THOSE VOUCHERS FURNISHED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THEREFO RE, THERE APPEARS TO BE NO REASON TO RAISE QUESTION ON THE PROCEDURE ADOPTED B Y THE DEPARTMENT. B. WITH REGARD TO THE OBJECTION THAT THE LETTER U/ S 133(6) OF IT ACT HAS BEEN SENT TO ANUPAM MISHRA IN PLACE OF ANNPURNA MIS HRA IT IS CLARIFIED THAT THIS LETTER HAS BEEN SENT AT THE ADDRESS FURNISHED BY YO U ON 22.11.2010 IN COMPLIANCE TO THIS OFFICE SHOW CAUSE DATED 16.11.2010 ISSUED T O CALL FOR ADDRESSES OF 112 PERSONS HOWEVER THE ADDRESS OF 111 PERSONS WERE PRO VIDED. SINCE THE ASSESSEE IT SELF IS NOT IN POSITION TO FURNISH THE CORRECT NAME OF THE RECEIPIENT, HOW IT CAN CLAIM THAT THE PAYMENT REFERRAL FEE SHOWN TO HAVE M ADE WAS GENUINE. ITA NO.276/AGRA/2012 A.Y.2008-09 23 C. FROM THE PERUSAL OF VOUCHERS PERTAINING TO REFER RAL FEE EXPENSES, IT WAS FOUND THAT THE PAYMENT TO A NUMBER OF PERSONS HAVE BEEN MADE THROUGH SOME OTHER PERSON. FOR EXAMPLE THE PAYMENT OF RS. 1076/- SHOWN TO HAVE MADE OF SHRI BRAHMDUTT SINGH ON 17.10.2007 WAS MADE TO SHRI GYAN SINGH. THUS, THE RECIPIENT HAS BEEN SHOWN AS SHRI BRAHM DUTT SINGH, HOWEVER, THE PAYMENT HAS BEEN MADE TO SHRI GYAN SINGH. THEREFORE THE ASSESSE E WAS REQUIRED TO FURNISH THE LATEST MAILING ADDRESS OF THE RECIPIENT OF REFERRAL FEE DEBITED IT IN PROFIT AND LOSS ACCOUNT THEREAFTER ON THE BASIS OF INFORMATION PROV IDED THE RECIPIENT WAS CONTACTED FOR VERIFICATION. ON VERIFICATION IT WAS FOUND THAT ALMOST ALL THE REFERRAL FEE PAYMENTS ARE NOT GENUINE. IN COMPLIANCE TO NOTICE DATE 16.1.2.2010, THE COUNS EL OF THE ASSESSEE HAS ATTENDED THE OFFICE AND SUO-MOTO PRODUCED MRS. KUNT I DEVI FOR EXAMINATION AND SHE WAS EXAMINED ON THE SAME DAY. MOREOVER, IN EACH AND EVERY SHOW CAUSE THE DATE COMPLIANCE HAS BEEN INTIMATED TO YOU IN SUCH C IRCUMSTANCES YOUR OBJECTION THAT THE DATE OF PRODUCTION OF REFERRAL PERSONS FOR EXAMINATION WERE NOT INTIMATED TO YOU DOES NOT SURVIVE. D. AS REGARDS THE CONTENTION THAT GENUINENESS MAY BE VERIFIED THROUGH THE CITY'S ITO, THE ASSESSEE HAS FORGETTEN THAT IN MOST OF THE CASES THE ADDRESS FURNISHED BY IT WERE INCOMPLETE. AS A RESULT OF WHI CH SUMMONS/LETTERS U/S 133(6) ITA NO.276/AGRA/2012 A.Y.2008-09 24 OF IT ACT SENT BY THIS OFFICE RETURNED UNSERVED. TH US, ASSESSEE HAS NOT DISCHARGED ITS ONUS TO FURNISH THE CORRECT ADDRESSES OF THE PA YMENT OF REFERRAL FEES, IN SUCH CIRCUMSTANCES IT WILL NOT BE PRUDENT STEP TO ASK TH E ITO CONCERNED FOR THE VERIFICATION OF REFERRAL FEE. E. FROM THE PERUSAL OF THE REPLY RECEIVED IN THIS OFFICE FROM THE REFERRAL PERSONS, IT WAS FOUND THAT THE AMOUNT OF T.D.S HAS BEEN DEDUCTED FROM THE PAYMENT OF SHRI UDAI TRAPATHI. SINCE ALMOST ALL THE REFERRAL PERSONS DO NOT COME UNDER THE PREVIEW OF T.D.S PROVISIONS, HENCE THE T. D.S CERTIFICATE AND THE CLAIM OF REFUND ON THIS ACCOUNT CANNOT BE TREATED AS A BA SIS FOR DECIDING THE GENUINESS OF REFERRAL FEE EXPENSES. MOREOVER THERE ARE EVIDEN CES ON RECORD WHICH SHOW THAT THE REFERRAL FEE HAS NOT BEEN PAID TO THE PERSON TO WHOM THE PAYMENT HAS BEEN SHOWN IN THE BOOKS OF ACCOUNTS BUT TO SOME BODY ELS E. IF ASSESSEE HAS MADE BOGUS CLAIM OF EXPENSES IN ITS BOOKS OF ACCOUNTS BY PAYING A NOMINAL AMOUNT OF T.D.S. AND ON THE BASIS OF SUCH COMPLIANCE OF T.D.S PROVISION IT CANNOT CLAIM THAT THE EXPENSES DEBITED BY IT IN THE BOOKS OF ACC OUNT WERE GENUINE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A SSESSEE HAS FURNISHED COPIES OF FORM 16A TO SUBSTANTIATE THE REFERRAL FEE PAYMENT. HOWEVER, THE AMOUNT PAID/ CREDITED THROUGH THESE TDS CERTIFICATE S (FORM-16A) HAS BEEN WORKED OUT LESS THAN RS.1.8 CRORES, WHICH INDICATES THAT WHOLE OF THE REFERRAL FEE ITA NO.276/AGRA/2012 A.Y.2008-09 25 PAYMENT HAS NOT BEEN SUBJECTED TO TDS PROVISIONS. T HESE COPIES OF FORM 16A ALSO INCLUDES A CERTIFICATES ISSUED IN THE NAME OF BEENA AGARWAL (PAN NOT AVAILABLE) WHEREIN THE NATURE OF PAYMENT HAS BEEN S HOWN AS 'RENT REFERRAL FEE'. THUS THE ASSESSEE HAS INCLUDED THE AMOUNT OF RENT I N THE PAYMENT OF REFERRAL FEE WHICH CANNOT BE TREATED AS CORRECT METHOD OF ACCOUN TING. F. FURTHER, OUT OF 1143 PERSONS, HOW MANY HAVE CLAI MED THE REFUND IN THEIR INCOME TAX RETURN ON ACCOUNT OF T.D.S MADE, WAS NOT KNOWN TO THE ASSESSEE. IT COULD NOT EVEN FURNISH INFORMATION, AS TO HOW MUCH AMOUNT OF REFERRAL FEE WAS PAID IN CASH AND HOW MUCH THROUGH BANKING CHANNELS. IN SUCH CIRCUMSTANCES THERE APPEARS TO BE NO REASON TO BLAME THE DEPARTME NT FOR VIOLATION OF NATURAL JUSTICE. G. IF IN THE COMPLETION OF AN ASSESSMENT THE ATTEND ANCE OF A WITNESS IS REQUIRED, THE SAME IS CALLED FOR BY THE DEPARTMENT AND THE RE-IMBURSEMENT OF EXPENSES AS PER RULE IS ALSO PROVIDED TO HIM. IN TH IS PROCESS THERE APPEARS NO VIOLATION OF NATURAL JUSTICE AS RAISED BY THE ASSES SEE IN ITS REPLY. MOREOVER, NO BILL OF EXPENSES CLAIMED BY ANY WITNESS IS PENDING FOR P AYMENT. THEREFORE, THE OBJECTION ON THIS COUNT ALSO DOES NOT SURVIVE. H. THE ASSESSEE HAS CLAIMED THAT THE NATURE OF BUSI NESS DOES NOT REQUIRE TO VERIFY ADDRESSES INDIVIDUALLY OF ALL THE PERSONS TO WHOM PAYMENT OF REFERRAL FEE ITA NO.276/AGRA/2012 A.Y.2008-09 26 HAS BEEN MADE BECAUSE THERE IS NO RISK OF ANY DEFAU LT OF THOSE PERSONS SO THAT ASSESSEE WERE NOT IN POSITION TO VERIFY INDIVIDUAL ADDRESS OF ALL THE ABOVE PERSONS. THUS, THE ASSESSEE ITSELF IS NOT IN POSITION TO DIS CHARGE ITS ONUS TO PROVE THE GENUINESS OF EXPENSES CLAIMED IN THE RETURN OF INCO ME IN THE SHAPE OF REFERRAL FEE. HOWEVER, IT REQUIRED THE ATTENDANCE OF SHRI BR AHMDUTT SINGH WHICH IS A BOGUS ENTITY CREATED BY THE ASSESSEE ITSELF TO JUST IFY A CLAIM OF EXPENSES SHOWN UNDER THE HEAD 'REFERRAL FEE' HENCE THE QUESTION OF HIS PERSONAL ATTENDANCE DOES NOT ARISE. IT IS MATTER OF SURPRISE AS TO HOW DETAI LS OF BOGUS PERSON SUCH AS NAME, FATHER'S NAME, ADDRESS, PHONE NO. HAVE BEEN GENERAT ED BY THE ASSESSEE. 2.20. AT THE END, AS THE RESULT OF ENTIRE EXERCISE UNDERTAKEN BY THE A.O., THE VARIOUS DISCREPANCIES NOTED FOR THE PAYMENT UND ER THE HEAD 'REFERRAL FEE:- (I) ALL THE VOUCHERS PERTAINING TO REFERRAL FEE HAVE NO T BEEN PRODUCED FOR VERIFICATION DESPITE GIVING SO MANY OPPORTUNITI ES TO THE ASSESSEE WHICH SHOWS THAT THE ASSESSEE HAS NO EVDIECNE TO SU BSTANTIATE EXPENSES SHOWN UNDER THE HEAD REFERRAL FEE. (II) WHATEVER VOUCHERS HAVE BEEN PRODUCED FROM THEI R EXAMINATION, IT IS LEARNT THAT ALMOST ALL THE PAYMENT HAVE BEEN MADE I N CASH THROUGH SELF-MADE VOUCHERS, WHICH ARE NOT OPEN FOR VERIFICA TION. ITA NO.276/AGRA/2012 A.Y.2008-09 27 (III) FURTHER, IT HAS ALSO BEEN OBSERVED THAT ON TH E 75% OF VOUCHERS OF REFERRAL FEE, THE PAYMENT HAS NOT BEEN MADE DIRECTL Y TO THE PERSON TO WHOM THE PAYMENT HAS BEEN SHOWN IN THE BOOKS OF ACC OUNT BUT TO A PERSON OTHER THAN THAT. (IV) IT HAS ALSO BEEN GATHERED THAT THE PERSON WHO HAS RECEIVED THE PAYMENT ON BEHALF OF OTHER HAS NO AUTHORITY TO RECE IVE THE SAME. (V) ASSESSEE COULD NOT PRODUCE PERSONS FOR THE EXAMINAT ION. (VI) SOME OF THE PERSONS TO WHOM THE REFERRAL FEE PAYMEN T HAS BEEN SHOWN CATEGORICALLY STATED THAT THEY HAVE NOT RECEI VED ANY PAYMENT FROM THE ASSESSEE COMPANY. (VII) MOST OF THE LETTERS/SUMMONS SENT TO VERIFY THE GENU INESS OF THE REFERRAL FEE EXPENSES RETURNED UNSERVED. (VIII) LETTERS/SUMMONS WERE SENT TO 40 PERSONS, HOW EVER ONLY ONE OF THEM HAS STATED THAT THE T.D.S HAS BEEN DEDUCTED FROM HI S PAYMENT, HENCE IT CANNOT BE SAID THAT THE PAYMENT WAS MADE TO THE REFERRAL PERSONS AFTER THE DEDUCTION OF T.D.S. (IX) THE CONFIRMATION LETTERS RECEIVED FROM THE PER SON THROUGH COUNSEL DO NOT INDICATE THE GENUINESS OF THE REFERRAL FEE E XPENSES AS THE SIGNATURE AVAILABLE ON THESE CONFIRMATION APPEAR TO BE NON GENUINE. ITA NO.276/AGRA/2012 A.Y.2008-09 28 THE DETAIL DISCUSSION IN THIS REGARD HAS BEEN MADE SUPRA AND THE COPIES OF CONFIRMATION LETTER ARE ENCLOSED HERE WIT H AS ANNEXURE A. (X) THE ASSESSEE HAS GIVEN THE COLOUR OF REFERAL FEE PA YMENT TO THE PAYMENT OF COMMISSION THEREBY CONTROVERTED THE PROV ISIONS OF SECTION 45 OF INSURANCE ACT 1938. 2.21. THEREFORE, IT IS ABUNDANTLY CLEAR THAT THE P AYMENT UNDER THE HEAD REFERRAL FEE IS NOT FULLY SUBSTANTIATED, FULL OF VA RIOUS IRREGULARITIES AND BOGUS CLAIM AS MENTIONED ABOVE. THE A.O. CONSIDERING NATU RE OF BUSINESS AND FACTS AND CIRCUMSTANCES OF THE CASE WAS OF THE OPINION THAT T HE ASSESSEE HAS INFLATED ITS EXPENSES UNDER THE ABOVE HEADS OF EXPENSES AND THE INTENTION OF LEGISLATURE IS CLEAR FROM CIRCULAR NO.677 (SUPRA) THAT ADMISSIBILI TY OF THE EXPENDITURE IS PERMISSIBLE UP TO 50% OF THE EXPENDITURE. THE A.O., THEREFORE, DISALLOWED 30% OF THE EXPENSES UNDER THE ABOVE HEADS OF EXPENDITUR E WHICH COMES TO RS.2,77,05,851/- (RS.9,23,52,839/-X 30%). 3. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEF ORE LEARNED CIT(A), HOWEVER, THE LEARNED CIT(A) ON THE SAME REASONS AS HAS BEEN GIVEN BY THE A.O. HAS CONFIRMED ALL THE ADDITION AND DISMISSED THE AP PEAL OF THE ASSESSEE. ITA NO.276/AGRA/2012 A.Y.2008-09 29 4. LEARNED COUNSEL FOR ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT ALL ADDITIONS ARE WHOLLY UNJUSTIFIED BECAUSE ALL THE EXPENDITURES WERE INCURRED WHOLLY AND EXCLU SIVELY FOR THE PURPOSE OF BUSINESS AND FILED TWO PAPERS BOOKS IN SUPPORT OF H IS CONTENTION AND ALSO FILED CHART OF THE HISTORY OF THE ASSESSEE IN PRECEDING A ND SUBSEQUENT ASSESSMENT YEARS TO SHOW THAT A.O. HAS MADE EXCESSIVE DISALLOWANCES OUT OF EXPENSES. HE HAS ALSO FILED COPIES OF THE ASSESSMENT ORDERS IN THE CASE O F THE SAME ASSESSEE FOR A.Y. 2007-08 AND A.Y. 2010-11 DATED 29.09.2009 AND 26.03 .2013 PASSED UNDER SECTION 143(3) OF THE ACT AND SUBMITTED THAT IN A.Y . 2007-08 NO DISALLOWANCES HAVE BEEN MADE AGAINST THE ASSESSEE OUT OF ANY OF T HE ABOVE EXPENDITURES AND IN A.Y. 2010-11 NO DISALLOWANCES HAVE BEEN MADE UNDER THE HEADS SALARY AND CERTIFIED DATA PURCHASE FROM M/S SHIVA FUND TRUST A ND ONLY PART ADDITION IS MADE FOR DIFFERENT PARTIES. HE HAS ALSO RELIED UPON THE UNREPORTED DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KINETIC CA PITAL FINANCE LTD. DELIVERED ON 02.09.2011 IN ITA NO. 87 OF 2007 ON THE PROPOSIT ION THAT A.O. HAS TO ADVERT TO EACH AND EVERY ENTRY AND NOT TO PICKUP COUPLE OF ENTRIES, CONSIDERING THE SAME AS UNDISCLOSED INCOME. HE HAS ALSO REFERRED TO CIRC ULAR DATED 18.11.2010 OF INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY IN W HICH 40% OF FIRST YEARS PREMIUM PAYABLE ON POLICY PAID TOWARDS COMMISSION W AS FOUND TO BE IN PERMISSIBLE LIMIT. ITA NO.276/AGRA/2012 A.Y.2008-09 30 5. ON THE OTHER HAND, LEARNED D.R. RELIED UPON THE ORDERS OF AUTHORITIES BELOW AND ALSO FILED AUDITED BALANCE SHEET OF THE ASSESSE E AND SUBMITTED THAT STATEMENT OF SRI RAM BABOO SINGH, MANAGING DIRECTOR OF THE AS SESSEE RECORDED WHICH CLEARLY JUSTIFIED DISALLOWANCE OF THE EXPENSES AND SUBMITTED THAT APPEAL OF THE ASSESSEE MAY BE DISMISSED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAIL ABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE COMPANY IS A CORPORATE CO MMISSION AGENT OF BAJAJ ALLIANZ AND RECEIVED COMMISSION ON THE SAME. THE AS SESSEE WAS TO PROVIDE INSURANCE BUSINESS TO THE PRINCIPAL AND SHALL HAVE TO INCUR EXPENDITURE FOR PROVIDING THE REQUISITE INFORMATION TO THE AFORESAI D INSURANCE COMPANY. THUS, IN THE BUSINESS OF THE ASSESSEE, THE ASSESSEE COMPANY IS NOT ENGAGED IN ANY KIND OF MANUFACTURING OR TRADING ACTIVITIES BUT IT SIMPLY F ACILITATE COMMISSION ON BEHALF OF BAJAJ ALLIANZ. THE ASSESSEE WAS TO INCUR CERTAIN EXPENDITURE RELATING TO THE BUSINESS ACTIVITIES OF THE ASSESSEE, WHICH HAVE BEE N CONSIDERED BY THE A.O. LIKE CERTIFIED DATA PURCHASED, REFERRAL FEES AND PAYMENT MADE UNDER THE HEADS SALARY, WAGES AND BONUS. THE MANAGING DIRECTOR OF THE COMPA NY WAS SUMMONED BY THE ITA NO.276/AGRA/2012 A.Y.2008-09 31 A.O. WHO HAS EXPLAINED THE NATURE OF BUSINESS OF THE ASSESSEE AND PAYMENT OF THE AMOUNTS UNDER DIFFERENT HEADS FOR EARNING COMMISSIO N INCOME. IT WAS, THEREFORE, FINDING OF THE A.O. THAT SALARY EXPENSES ARE ATTRIBUTED PRI MARILY TO THE PERSONS WHO INFORMED THE PUBLIC AND PROMOTE THEM TO GET THE IR INSURANCE DONE. THE DATA PURCHASED INFORMATION IS REGARDING THE PROSPECTIVE BUYERS. FURTHER IT WAS EXPLAINED THAT REFERRAL FEES IS THE PAYMENT THAT RE LATES TO THE PARTIES WHO PROVIDE THE NECESSARY REFERENCE TO THE ASSESSEE ABOUT THE P ROSPECTIVE BUYERS MEANING THEREBY, THE ASSESSEE HAS TO INCUR ALL ABOVE EXPENS ES UNDER DIFFERENT HEADS FOR COMPLETING THE WORK OF AGENCY OBTAINED FROM BAJAJ A LIANZ. THE ASSESSING OFFICER DESPITE GIVING CERTAIN OBSERVATION AGAINST THE ASSESSEE HAS ULTIMATELY THE ACCEPTED A CLAIM OF ASSESSEE IN PRINCIPLE THAT SUBS TANTIAL EXPENSES OF 70% HAVE BEEN INCURRED BY ASSESSEE WHOLLY AND EXCESSIVELY FO R THE PURPOSE OF BUSINESS ACTIVITIES OF THE ASSESSEE. THE ASSESSEES COUNSEL HAS FILED A CHART SHOWING THE HISTORY OF THE ASSESSEE IN EARLIER YEAR AS WELL AS IN SUBSEQUENT YEARS TO SHOW HOW MUCH EXPENDITURE UNDER THE ABOVE THREE HEADS HAVE B EEN INCURRED BY THE ASSESSEE. THE SAME CHART IS REPRODUCED AS UNDER :- ITA NO.276/AGRA/2012 A.Y.2008-09 32 RECENT INSURANCE SERVICES LTD. ASSTT YEAR 20 08-2009 ITA NO.276/AGR/2012 1. 2. 3. 4. 5 A/Y INSURANCE COMMISSION RECEIPT RETURNED INCOME SALARY REFERRAL FEES 2007-08 84,737,809.00 436,930.00 33,089,788.00 39.05 37,085,078.00 43.76 2008-09 106,037,283.00 (5,831,542.00) 44,963,429.00 40,352,970.00 42.40 38.06 2009-10 69,343,587.00 1,606,118.00 11,947,013.00 17.23 NIL 2010-11 59,052,963.00 NIL (RS.10,58,444/- MINUS SETT OFF FROM B/F LOSSES) 20,034,327.00 33.93 ----------- NIL 6 7 8 9 CERTIFIED DATA PURCHASE TOTAL EXPENSES % STATUS OF ASSESSMENT NIL 70,174,866.00 82.81 ASSTT U/S 143(3), NO ADDITI ON / DISALLOWANCE UNDER THE HEAD SALARY, REFERRAL FEES AND CERTIFIED DATE PURCHASE 7,036,440.00 92,352,839.00 87.09 YEAR UNDER APPEAL 6.64 42,940,237.00 54,887,250.00 79.15 ASSTT U/S 143(1)( A) 61.92 28,000,293.00 47.42 ---------- (DATA PURCHASE FROM M/S SHIVA FUND TRUST RS.2,38,42,181/-) 48,034,620.00 (DATA PURCHASE FROM M/S SHIVA FUND TRUST RS.2,38,42,181/-) 81.34 ASSTT U/S 143(3), NO ADDITION / DISALLOWANCE UNDER THE HEAD SALARY, AND CERTIFIED DATE PURCHASE FROM M/S SHIVA FUND TRUST (PROP. M/S RECENT INSURANCE SERVICES RS.2,38,42,181/-. REFERRAL FEES WAS NOT THERE AND WAS MERGED IN DATA PURCHASE ITA NO.276/AGRA/2012 A.Y.2008-09 33 7. NOW, WE CONSIDER ALL THE DIFFERENT EXPENSES INCU RRED BY ASSESSEE FOR THE PURPOSE OF ACHIEVING THE TARGET OF INSURANCE COMPAN Y. 7.1 CERTIFIED DATA PURCHASE THE ASSESSEE HAS PURCHASED CERTIFIED DATA OF RS . 70,36,40 /- AND THE SAME IS NOTED IN THE ASSESSMENT ORDER. THE A.O. WAS OF THE VIEW THAT THIS DATA CAN BE COLLECTED FROM ANY GOVERNMENT AND PRIVATE AGENCY. H OWEVER, THE A.O. FAILED TO NOTE THAT THE REVENUE AUTHORITIES COULD NOT DICTATE TO THE ASSESSEE AS TO HOW AND IN WHAT MANNER THE BUSINESSMAN SHALL HAVE TO RUN ITS B USINESS. THE EXPENDITURE SHALL HAVE TO BE CONSIDERED FROM THE POINT OF VIEW OF THE BUSINESSMAN/ASSESSEE AND NOT FROM THE POINT OF VIEW OF THE REVENUE AUTHO RITIES. WE ARE FORTIFIED IN OUR VIEW BY JUDGMENTS OF HONBLE THE SUPREME COURT IN T HE CASES OF COMMISSIONER OF INCOME-TAX, ANDHRA PRADESH VS. DHANRAJGIRJI RAJA NARASINGIRJI (1973) 91 ITR 544 (S.C), COMMISSIONER OF INCOME-TAX, BOMBAY VS. W ALCHAND AND CO. PRIVATE LTD. (1967) 65 ITR 381 (S.C) AND SASSOON J. DAVID A ND CO. P. LTD. VS. COMMISSIONER OF INCOME-TAX, BOMBAY (1979) 118 ITR 2 61 (S.C). THE A.O. FOUND THAT ASSESSEE HAS PURCHASED DATA FROM M/S SHI VA FUND TRUST WHICH IS RUN AND MANAGED BY THE BROTHER OF THE MANAGING DIRECTOR OF THE ASSESSEE. THE A.O. DID NOT ACCEPT CONTENTION OF THE ASSESSEE REGARDING THE SAME BECAUSE THE ASSESSEE COULD NOT EXPLAIN CONTENTS AND UTILITY OF THE INFOR MATION PURCHASED AND WHETHER ITA NO.276/AGRA/2012 A.Y.2008-09 34 SUCH DATA WAS USED BY THE ASSESSEE OR NOT AND THAT THE CREDENTIAL OF THE INFORMATION SUPPLIED BY M/S SHIVA FUND TRUST IS DOU BTFUL. THE ASSESSEE IN THE PAPER BOOK FILED COMPLETE DETAILS OF THE DATA PURCH ASED AND EXPLAINED THAT DATA WAS PURCHASED FROM DECEMBER, 2007 UPTO MARCH, 2008 (P.B.1). COPIES OF THE DATA SHEETS ARE FILED IN THE PAPER BOOK FROM PAGES 191 TO 290 TO PROVE THAT ASSESSEE MAINTAINED COMPLETE DETAILS OF DATA PURCHA SED FOR THE PURPOSE OF BUSINESS WHICH SUPPORT THE CONTENTION OF LEARNED CO UNSEL FOR THE ASSESSEE THAT GENUINENESS EXPENDITURE HAVE BEEN INCURRED. PAPER B OOK PAGE 291 IS THE COPY OF THE ACKNOWLEDGMENT OF THE RETURN OF INCOME FILED BY M/S SHIVA FUND TRUST FOR A.Y. 2008-09 SHOWING THE AMOUNT RECEIVED FROM THE A SSESSEE AS INCOME WHICH IS SUPPORTED BY THE AUDITED REPORT AS WELL. LEARNED CO UNSEL FOR THE ASSESSEE SUBMITTED THAT IN A.Y. 2008-09 NO REGULAR ASSESSMEN T WAS FRAMED IN THIS CASE. HOWEVER, REGULAR ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) OF THE ACT IN A.Y. 2010-11 DATED 30.04.2012. COPY OF THE ASSESSME NT ORDER IS FILED AS PAGE NOS. 307 TO 309 OF THE PAPER BOOK IN WHICH THE A.O. DID NOT DOUBT THE BUSINESS ACTIVITIES OF M/S SHIVA FUND TRUST. THE ASSESSEE, T HEREFORE, ON THE BASIS OF THESE EVIDENCES HAVE BEEN ABLE TO PROVE THAT ASSESSEE ACT UALLY PURCHASED DATA FROM M/S SHIVA FUND TRUST AND MAINTAINED COMPLETE DETAILS ON THE SAME AND SAME INFORMATION HAVE BEEN USED FOR THE PURPOSE OF EARNI NG BUSINESS INCOME. THE CREDENTIALS OF M/S SHIVA FUND TRUST ARE ALSO GENUIN E BECAUSE THE REVENUE ITA NO.276/AGRA/2012 A.Y.2008-09 35 DEPARTMENT HAS ACCEPTED THE INCOME DECLARED BY THE SAID PARTY IN THEIR RETURN OF INCOME WHICH WAS RECEIVED FROM THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO SUBMITTED THAT ENTIRE DATA WAS RECEIVED AND USED IN THE YEAR UNDER CONSIDERATION F ROM M/S SHIVA FUND TRUST, THEREFORE, IN THE ABSENCE OF ANY DATA PURCHASED FRO M THIS PARTY, ASSESSEE WOULD NOT HAVE BEEN ABLE TO EARN COMMISSION INCOME. IN PR ECEDING YEAR 2007-08, THE A.O. PASSED REGULAR ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT IN THE CASE OF THE ASSESSEE ON 29.09.2009 IN WHICH THE A.O. DID NOT MAKE ANY ADDITION AGAINST THE ASSESSEE UNDER ALL THE ABOVE HEADS OF E XPENSES. THE ASSESSEE HAS INCURRED EXPENDITURE FOR ABOUT 82.80% AS AGAINST TH E INSURANCE COMMISSION RECEIPT AND IN ASSESSMENT YEAR UNDER APPEAL I.E. 20 08-09 THE ASSESSEE HAS INCURRED EXPENSES UNDER THE THREE HEADS IN ABOUT 87.09% OF T HE INCOME. IN THE SUBSEQUENT A.Y. 2009-10 THE CLAIM OF THE ASSESSEE HAS BEEN ACC EPTED UNDER HEADS OF THE EXPENSES AND IN A.Y. 2010-11 THE A.O. ALSO PASSED R EGULAR ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT DATED 26.03.2011 IN WHICH THE A.O. DID NOT MAKE ANY ADDITION/DISALLOWANCE ON ACCOUNT OF CERTIFIED D ATA PURCHASED FROM M/S SHIVA FUND TRUST AND ONLY OUT OF SMALL PARTIES DISALLOWAN CE WAS MADE OF RS.10,39,528/-. THUS, THE A.O. DID NOT DOUBT THE CR EDENTIAL OF M/S SHIVA FUND TRUST IN PROVIDING DATA TO ASSESSEE, FOR THE PURPOS E OF COMPLETING THE AGENCY WORK. IT MAY ALSO BE NOTED HERE THAT IN ASSESSMENT YEAR UNDER APPEAL THE ITA NO.276/AGRA/2012 A.Y.2008-09 36 PERCENTAGE OF EXPENDITURE UNDER DATA PURCHASE IS 6. 64% AND IN SUBSEQUENT A.Y. 2009-10 AND 2010-11 THE PERCENTAGE OF EXPENDITURE I NCURRED BY ASSESSEE UNDER THIS HEAD WAS 61.92% AND 47.42% AND THE SAME HAVE BEEN ACCEPTED BY THE REVENUE DEPARTMENT. THUS, AS COMPARED TO SUBSEQUENT ASSESSMENT YEAR, THE ASSESSEE HAS INCURRED LESSER EXPENSES UNDER THE HEA D CERTIFIED DATA PURCHASED, THEREFORE, THE HISTORY OF THE ASSESSEE WOULD ALSO S UGGEST THAT ASSESSEE HAS ACTUALLY AND GENUINELY INCURRED EXPENSES UNDER THE HEAD DATA PURCHASED. THE A.O. DID NOT POINT OUT ANY SPECIFIC DEFECT IN ANY DATA PURCHASED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS, THEREFORE, IN THE ABSENCE OF A NY INCRIMINATING MATERIAL OR FINDING AGAINST THE ASSESSEE, THE A.O. WAS NOT JUST IFIED IN HOLDING THAT ASSESSEE COULD NOT SUBSTANTIATE THE ABOVE EXPENSES UNDER THE HEAD DATA PURCHASE. WE ARE, THEREFORE, OF THE VIEW THAT THE ENTIRE DISALLOWANCE UNDER THE HEAD IS WHOLLY UNJUSTIFIED, THEREFORE, ADDITION IS DELETED. 7.2 SALARY EXPENSES LEARNED COUNSEL FOR THE ASSESSEE EXPLAINED THAT TH ERE ARE THREE TYPES OF SALARY PAID AS HAS BEEN NOTED BY A.O. IN THE ASSESS MENT ORDER I.E. SALARY PAID TO ADMINISTRATIVE STAFF/SUPERVISOR AND REMAINING SALAR Y/WAGES PAID TEMPORARY STAFF, APPRENTICE AND FIELD STAFF AND IN THEIR CASES NO P. F. PROVISIONS ARE APPLICABLE. THE ASSESSEE HAS FILED COPIES OF FORM 16 FROM PAGES 310 TO 465 OF THE PAPER BOOK TO ITA NO.276/AGRA/2012 A.Y.2008-09 37 SHOW THAT GENUINE PAYMENTS OF THE SALARY HAVE BEEN MADE TO THE STAFFS WHO ARE EMPLOYED FOR THE PURPOSE OF THE BUSINESS OF THE ASS ESSEE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE ARE VOLUMINOUS VOUCHE RS OF SALARY OF THOUSANDS OF EMPLOYEES EMPLOYED BY THE ASSESSEE HAVE BEEN MAINTA INED AND COMPLETE BOOKS OF ACCOUNT ARE MAINTAINED. IT WOULD, THEREFORE, SHO W THAT ASSESSEE MAINTAINED COMPLETE DETAILS ON THE SAME ISSUE REGARDING SALARY PAYMENT. EVEN THE A.O. FOUND THAT THE ASSESSEE HAS MAINTAINED SALARY OF AB OUT 12,000/- ENTRIES AND SALARY HAVE BEEN PAID TO THEM RANGING FROM RS.2,000/- TO R S.8,000/-. IT WOULD SHOW THAT LARGE NUMBERS OF EMPLOYEES HAVE BEEN EMPLOYED BY TH E ASSESSEE FOR THE PURPOSE OF BUSINESS OF EARNING COMMISSION INCOME ON PROVIDI NG INFORMATION DATA TO THE PRINCIPAL. A.O. OBSERVED THAT NO VOUCHERS HAVE BEEN PRODUCED TO SUBSTANTIATE THE PAYMENT WITHOUT POINTING OUT AS TO WHICH OF THE VOU CHERS HAVE NOT BEEN PRODUCED FOR EXAMINATION AND IN THE ABSENCE OF ANY SPECIFIC DETAILS OR NUMBERING OF THE VOUCHERS, IT IS DIFFICULT TO SUSTAIN THE FIN DINGS OF THE A.O. ON THIS ISSUE. FURTHER IN A.Y. 2007-08, THE A.O. DID NOT MAKE ANY DISALLOWANCES OUT OF SALARY EXPENSES IN THE ORDER PASSED UNDER SECTION 1 43(3) OF THE ACT. NO ADDITION IS ALSO MADE IN SUBSEQUENT A.Y. 2010-11 DESPITE ASS ESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT. THE CHART SUBMITTED BY T HE LEARNED COUNSEL FOR ASSESSEE WOULD CLEARLY SHOW THAT IN PRECEDING A.Y. 2007-08 ASSESSEE HAS PAID ITA NO.276/AGRA/2012 A.Y.2008-09 38 SALARY TO THE STAFF IN 39.05% OF THE TOTAL COMMISSI ON AND IN ASSESSMENT YEAR UNDER APPEAL I.E. 2008-09, ASSESSEE PAID SALARY TO THE STAFF IN 42.40% OF THE COMMISSION. THUS, THE SAME IS VERY REASONABLE LOOKI NG TO THE PREVIOUS YEAR SALARY PAID TO THE STAFF IN PERCENTAGE AND VOLUME O F BUSINESS RECEIPTS. THUS, THERE IS NO QUESTION ON INFLATING EXPENSES BY THE ASSESSE E UNDER THE HEADS SALARY AS HAS BEEN FOUND BY THE A.O. THE ASSESSEES COUNSEL HAS D EMONSTRATED BEFORE US THAT THE COMPLETE DATA WERE PRODUCED BEFORE A.O. IN WHIC H NO SPECIFIC DETAILS AGAINST ASSESSEE HAVE BEEN POINTED OUT BY THE A.O. FURTHER SALARY ACCOUNTS HAVE BEEN FILED FROM PAGES 27 TO 43 OF THE PAPER BOOK TO SHOW THAT PAYMENT OF SALARY HAVE BEEN MADE TO LARGE NUMBER OF EMPLOYEES AND DETAILS OF MONTHWISE AND NAME- WISE HAVE BEEN MAINTAINED. PAYMENT OF SALARY CANNOT CONSTITUTE PAYMENT OF COMMISSION. NO SPECIFIC DETAILS OF VIOLATION OF T.D .S. PROVISIONS HAVE BEEN NOTED IN ASSESSMENT ORDER. SINCE SALARY HAS PAID FO R THE PURPOSE OF BUSINESS AND A.O. HAS NOT BROUGHT ANY ADVERSE MATERIAL AGAINST T HE ASSESSEE, THEREFORE, IN THE ABSENCE OF ANY MATERIAL AGAINST THE ASSESSEE, WE DO NOT FIND ANY JUSTIFICATION FOR THE AUTHORITIES BELOW TO DISALLOW 30% OF THE EXPENS ES OUT OF SALARY. WE, THEREFORE, DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ORDER OF THE AUTHORITIES BELOW TO DISALLOW 30% OF THE SALARY. ADDITION IS TH EREFORE, DELETED. ITA NO.276/AGRA/2012 A.Y.2008-09 39 7.3 EXPENSES RELATING TO REFERRAL FEES LEARNED COUNSEL FOR THE ASSESSEE HAS FILED COMPLET E EVIDENCES ON THIS ISSUE FROM PAGES 95 TO 189 OF THE PAPER BOOK WHICH WERE F ILED ON ACCOUNT ON REFERRAL FEES WHICH IS SUPPORTED BY COMPLETE DATA, VOUCHERS AND FORM NO.16A, PAN NUMBER AND TIN E-TIN PAYMENT DATA SHEETS. LEARNED C OUNSEL FOR THE ASSESSEE, THEREFORE, DEMONSTRATED THAT ASSESSEE MAINTAINED CO MPLETE DETAILS OF REFERRAL FEES PAID FOR THE PURPOSE OF BUSINESS AND EVEN SOME OF T HE PERSONS APPEARED BEFORE A.O. AND CONFIRMED THE RECEIPT OF MONEY UNDER THIS HEAD FROM THE ASSESSEE FOR PROVIDING REFERENCES FOR THE PURPOSE OF BUSINESS. P APER BOOK PAGE NOS. 95-96 ARE LIST OF COMPLETE DETAILS AND REFERENCES FEES PAID, TDS DEDUCTED AND DOCUMENTS PRODUCED. PAGE NOS. 82 TO 94 OF THE PAPER BOOK IS T HE REPLY FILED BEFORE A.O. LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMIT TED THAT ALL THE DISCREPANCIES NOTED BY THE A.O. HAVE BEEN EXPLAINED. LEARNED COUN SEL FOR THE ASSESSEE HAS CONTENDED THAT EVEN IF SOME PERSONS MENTIONED SUCH PAYMENT AS COMMISSION BUT IN FACT IT WAS A REFERRAL FEES PAID TO LARGE NUMBER OF PERSONS FOR PROVIDING REFERENCE TO THE ASSESSEE. COMMISSION IS DIFFERENT TERMS WHICH COULD BE PROVIDED TO MIDDLEMEN WHEN THE CONTRACT WOULD SETTLE BETWEEN TWO PARTIES. IN THE CASE OF INSURANCE EVEN IF THE MATTER IS SETTLED BETWEEN INS URED AND INSURANCE COMPANY, BUT NO PAYMENT IS SETTLED AT ONCE AND IT IS ALSO NO T KNOWN AS TO WHEN REPAYMENT WOULD BE POSSIBLE, THEREFORE, WHEN REFERENCES HAVE BEEN PROVIDED BY THE PERSONS ITA NO.276/AGRA/2012 A.Y.2008-09 40 TO THE ASSESSEE OF THE PROSPECTIVE BUYERS WHO WOULD LIKE TO BUY INSURANCE POLICY THROUGH THE ASSESSEE FROM BAJAJ ALLIANZ, THERE IS N O QUESTION OF MAKING ANY COMMISSION PAYMENT BECAUSE ULTIMATELY THE REFERENCE S DATA PROVIDED TO THE ASSESSEE WERE FORWARDED TO THE PRINCIPAL FOR THE PU RPOSE OF ISSUING THE INSURANCE POLICY IN FAVOUR OF THE PROSPECTIVE BUYERS. THE PER SON MADE REFERENCE IS NOT DIRECTLY CONNECTED WITH INSURANCE COMPANY. HE CANNO T CLAIM COMMISSION DIRECTLY FROM INSURANCE COMPANY. THUS, EVEN IF WORD COMMISSION WAS USED BY CERTAIN PERSONS, IT WOULD BE OF NO HELP TO THE A.O. TO MAKE DISALLOWANCE AGAINST THE ASSESSEE AS NOTED ABOVE. ASSESSEE PROVED PAYMEN T MADE TO TEAM LEADERS FOR PROVIDING REFERENCE DATA PROVIDED BY HIS TEAM FOR W HICH COMPLETE DETAILS ARE PREPARED. THE A.O. IN PRECEDING A.Y.2007-08 IN ORDER UNDER S ECTION 143(3) OF THE ACT DID NOT MAKE ANY DISALLOWANCE/ADDITION ON ACCOU NT OF REFERRAL FEES. IN PRECEDING A.Y. 2007-08, 43.76% REFERRAL FEE EXPENSE S IS INCURRED BUT IN THE ASSESSMENT ORDER UNDER APPEAL THE SAME EXPENDITURE IS INCURRED AT 38.06%, THEREFORE, IT IS STILL LESSER EXPENSES INCURRED AS AGAINST THE EXPENSES INCURRED IN PRECEDING A.Y. 2007-08. THEREFORE, CONSIDERING THE NATURE OF THE EXPENSES INCURRED BY THE ASSESSEE IN EARLIER YEAR AND SUBSEQ UENT YEAR, IT IS DIFFICULT TO BELIEVE THAT ASSESSEE HAS INFLATED THE EXPENSES UND ER THIS HEAD AS WELL. WE MAY ITA NO.276/AGRA/2012 A.Y.2008-09 41 ALSO NOTE HERE THAT CIRCULAR NO.677 DATED 28.01.199 4 RELIED UPON BY THE A.O. FOR THE PURPOSES OF MAKING DISALLOWANCE ADMITTEDLY APPL IES TO ADHOC DEDUCTION WHEN NO DETAILS OF ACCOUNT ARE MAINTAINED, BUT IN THE CA SE OF THE ASSESSEE, ASSESSEE MAINTAINED COMPLETE DETAILS AND BOOKS OF ACCOUNT, T HEREFORE, A.O. CANNOT USE SUCH CIRCULAR AGAINST THE ASSESSEE FOR THE PURPOSE OF MAKING ADDITION. THE A.O. DID NOT POINT OUT ANY SPECIFIC DEFECT IN MAINTAININ G OF BOOKS OF ACCOUNT BY THE ASSESSEE, SUCH CIRCULAR THEREFORE IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE. THE HISTORY OF THE ASSESSEE AS NOTED ABOVE, IN PRECEDIN G AND SUBSEQUENT YEARS AND THE VOLUMINOUS DETAILS MAINTAINED BY THE ASSESSEE WOULD CLEARLY SHOW THAT IF THE ADDITION AS PROPOSED BY THE A.O. IS CONFIRMED, IT W OULD ENHANCE THE INCOME/PROFIT OF THE ASSESSEE TO EXORBITANT AND EXC ESSIVE FIGURE WHICH IS NOT PERMISSIBLE. THE A.O. SHOULD COMPUTE REASONABLE INC OME OF ASSESSEE. THE A.O. EVEN IF FIND CERTAIN DISCREPANCIES IN THE EXPENDITU RE AND EVIDENCES, HE SHOULD HAVE CONSIDERED THE HISTORY OF THE ASSESSEE FOR THE PURPOSE OF COMPUTING INCOME OF THE ASSESSEE. ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, NATURE OF BUSINESS OF ASSESSEE MAINTAINED IN EARLIER YEAR AND SUBSEQUENT YEAR AND THE NECESSARY EXPENSES INCURRED BY THE ASSESSEE UNDER ABOVE THREE HEADS WOULD CLEARLY SUPPORT THE CONTENTION OF THE ASSESSEE THAT ADDITION MADE B Y THE A.O. IS WHOLLY UNJUSTIFIED DELETED. ITA NO.276/AGRA/2012 A.Y.2008-09 42 THE A.O. ACCEPTED SUBSTANTIALLY INCURRING OF THE E XPENSES FOR THE PURPOSE OF BUSINESS. THE ABOVE FACTS WOULD THEREFORE, CLEAR LY SHOW THAT ALL THE EXPENSES RELATED TO THE EARNING OF COMMISSION FROM BAJAJ ALL IANZ HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. 8. CONSIDERING THE ABOVE DISCUSSION AND CERTAIN DIS CREPANCIES NOTED BY THE A.O. IN THE ASSESSMENT ORDER AS NOTED ABOVE, AND CO NSIDERING THE HISTORY OF THE ASSESSEE, IT WOULD BE REASONABLE AND PROPER FOR MEE TING THE ENDS OF JUSTICE THAT UNDER THE REFERRAL FEES THE DISALLOWANCE SHOULD BE MAINTAINED AT 5% OF THE TOTAL EXPENSES CLAIMED BY THE ASSESSEE UNDER THIS HEAD AS AGAINST PROPOSED BY THE A.O. OF 30%. WE FIND SUPPORT FROM THE FACT THAT IN PRECE DING A.Y. 2007-08 THE PERCENTAGE OF THE EXPENDITURE UNDER ALL THE THREE H EADS INCURRED BY ASSESSEE WAS 82.81% AND IN ASSESSMENT ORDER UNDER APPEAL THE PER CENTAGE OF THE EXPENDITURE IS 87.09% WHICH IS APPROXIMATELY HIGHER BY 5% AND IF T HE SAME EXPENDITURE IS ALSO COMPARED WITH THE SUBSEQUENT A.Y.2009-10 AND 2010-1 1 IN WHICH ASSESSEE INCURRED PERCENTAGE OF EXPENDITURE AT 79.15% AND 81 .34% WOULD SHOW THAT THE DISALLOWANCE OUT OF REFERRAL FEES WOULD BE JUSTIFIE D AT 5% ONLY INSTEAD OF 30% MADE BY THE A.O. ADDITION IS, THEREFORE, PARTLY ALL OWED. ITA NO.276/AGRA/2012 A.Y.2008-09 43 9. CONSIDERING THE ABOVE DISCUSSIONS, WE ARE OF THE VIEW THAT AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISALLOWING THE EXPENSE S UNDER THE HEAD CERTIFIED DATA PURCHASED AND SALARY, WAGES AND BONUS. THE ADDITION S MADE ON ACCOUNT OF DISALLOWANCES OF 30% OF EXPENSES UNDER THESE HEADS ARE ACCORDINGLY DELETED. HOWEVER, FOR THE REFERRAL FEES, WE DO NOT SUSTAIN T HE ORDERS OF THE AUTHORITIES BELOW IN MAKING DISALLOWANCE OF THE 30% EXPENSES AN D WE RESTRICT THE DISALLOWANCE UNDER THE HEAD REFERRAL FEES TO 5% OF THE EXPENSES ON THE AMOUNT CLAIMED BY THE ASSESSEE AT RS.4,03,52,970/- . THE ORDERS OF THE AUTHORITIES BELOW ARE ACCORDINGLY SET ASIDE AND MODIFIED TO THE ABOVE EXTENT AND A.O. IS DIRECTED TO MAKE DISALLOWANCE OF 5% OF THE EXPENSES UNDER THE H EAD REFERRAL FEES ONLY. THE REMAINING ADDITION UNDER THE HEAD CERTIFIED DATA PU RCHASED AND SALARY/WAGES ARE ACCORDINGLY DELETED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (A.L. GEHLOT) (BHAV NESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER AMIT/ ITA NO.276/AGRA/2012 A.Y.2008-09 44 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY