Vikas Hisariya , Secunderabad V. Commissioner of Income Tax (OSD), Range-10, Hyderabad

ITA 280/Hyd/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7392 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 05-07-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 18-03-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LAKKA BHUSHANAM
• Assessee Lawyers: S RAMA RAO
• Keywords: Depreciation; Rule of consistency
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES : BENCH A HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. NO. 280 /HYD./20 20 A.Y : 201 1 - 12 SRI VIKAS HISARIYA VS. CIT (OSD) , RANGE 10 HYDERABAD HYDERABAD [PAN: A FHPM1954P ] (APPELLANT) (RESP ONDENT) FOR ASSESSEE: S HRI S. RAMA RAO, A DV FOR REVENUE: SRI LAKKA BHUSHANAM , DR DATE OF HEARING : 0 5 / 07 /2021 DATE OF PRONOUNCEMENT : 17 /0 8 /2021 O R D E R PER S.S. GODARA, J.M. TH IS ASSESSEES APPEAL ARISE S AGAINST THE CIT (A) - 6 , HYDERABADS ORDER DATED 30.01.2020 IN CASE NO. 11036 /201 4 - 15 FOR AY 201 1 - 12 , INVOLVING PROCEEDINGS U/S 143 (3) OF THE INCOME TAX ACT, 1961 [ IN SHORT THE ACT ]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEE HAS PLEADED THE FOLLOWING TWIN SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL. ITA 280/HYD/2020 AY : 2011 - 12 SRI VIKAS HISARIYA VS. CIT(OSD), RANGE - 10,HYD. 2 2 . THE LD.CIT(A) ERRED IN CO NFIRMING THE VALIDITY OF THE ORDER AS THE ORDER OF ASSESSMENT IS PASSED BY THE CIT(OSD) INSTEAD OF THE AO. 3. THE LD.CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF COMMISSION OF RS.33,00,000/ - MADE BY THE AO. 2.1. LEARNED COUNSEL FOR ASSESSEE IS FAIR ENOUGH IN NOT PRESSING FOR ASSESSEES FIRST AND FOREMOST SUBSTANTIVE GROUND CHALLENGING AOS JURISDICTION. REJECTED ACCORDINGLY. 2.2. NEXT COMES THE LATTER ISSUE OF COMMISSION DISALLOWANCE AMOUNTING TO RS. 33,00,000/ - MADE IN BOTH THE LOWER PROCEEDINGS. THERE IS HARDLY ANY DISPUTE THAT THE ASSESSEE HAS CLAIMED HIS COMMISSION EXPENSES IN SALE OF COMPUTER SPARE PARTS INTER ALIA INVOLVING HIS WIFE SMT. NISHA HISARIYA , BROTHERS WIFE SMT. MANISHA HISARIYA , COMPANY M/S VISHAL COMPUT E CH PVT. LTD . , SRI PRAHLAD PR ASAD HISARIYA HIS FATHER AND SHRI VISHAL HISARIYA HIS BROTHER ; TO THE TUNE OF RS. 10,00,000/ - EACH IN ALL EXCEPT THE THIRD PARTY AMOUNTING TO RS. 3,00,000/ - TOTALLING TO RS. 43,00,000/ - ; RESPECTIVELY. THE AOS ASSESSMENT ORDER DATED 25.3.2014 ACCEPTED THE IMPUGNED CLAIM ANNUALLY IN THE EXPENDITURE OF RS. 4,00,000/ - AND RS. 6,00,000/ - IN CASE OF ASSESSEES BROTHER THEREBY DISALLOWING REMAINING SUMS OF RS. 33,00,000/ - IN THE ISSUE . THE CIT(A) HAS UPHELD THE SAME. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL PLEADINGS AGAINST AND IN SUPPORT OF IMP UGNED COMMISSION DISALLOWANCE. ASSESSEES DETAILED PAPER BOOK RUNNING INTO 86 PAGES INTER ALIA COMPRISING OF HIS RETURN AND COMPUTATION, PROFIT & LOSS ACCOUNT, BALANCE SHEET AND CAPITAL ACCOUNT, STATEMENT OF ASSETS AND DEPRECIATION, FORM 3 CB AND 3CD, M/ S VISHAL PVT. LTD.S ITR IV DATED 28.9 . 2011 WITH BALANCE SHEET ALONG WITH PROFIT AND LOSS A/C FOLLOWED BY SCHEDULES AND SIMILAR EVIDENCE AS WELL AS COMMISSION AGREEMENT AND STATEMENT(S) OF THE FOREGOING PAYEES; HAS BEEN CONSIDERED. WE ITA 280/HYD/2020 AY : 2011 - 12 SRI VIKAS HISARIYA VS. CIT(OSD), RANGE - 10,HYD. 3 NOTICE AT T HE OUTSET THAT THE VERY ISSUE OF COMMISSION PAYMENT DISALLOWANCE PERTAINING TO ASSESSEES COMPANY M/S VISHAL COMPUTECH PVT. LTD. HAD ARISEN IN THE AY 2009 - 10 AND 2010 - 11 IN HIS OWN CASES IN ITA NOS. 1494 & 1495/HYD/2016 ORDER DATED 30 TH AUGUST, 2019 WHE REIN THE COORDINATE BENCH HAS GRANTED RELIEF TO THE ASSESSEE WHICH IS EXTRACTED HEREUNDER . 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON PERUSING THE TRADING AND P & L ACCOUNT OF M/ S. VISHAL PERIPHERALS, THE S OLE PROPRIETORSHIP CONCERN OF THE ASSESSEE, WE FIND THAT THE TURNOVER FOR THE AY 2009 - 10 IS RS. 108,71,31,578/ - AND RS. 104,45,12,403/ - FOR THE ASST. YEAR 2009 - 10 AND 2010 - 11 AND THE ASSESSEE HAD CLAIMED REASONABLE EXPENSES TOWARDS COMMISSION FOR BOTH THE RELEVANT ASST. YEARS. THOUGH THE LD. REVENUE AUTHORITIES HAS POINTED OUT THE NEXUS BETWEEN THE ASSESSEE AND THE COMMISSION AGENTS AS RELATED PARTIES, THEY HAVE NOT EXAMINED THE RATE OF COMMISSION PAID IN ORDER TO ESTABLISH THAT THE COMMISSION PAID IS EXCES SIVE. HENCE IT APPEARS THAT THE ENTIRE DISALLOWANCE IS BASED ON SURMISES AND CONJUNCTURES AND NOT BASED ON VALID FACTS. IN THIS SITUATION, WE ARE OF THE CONSIDERED VIEW THAT THE DISALLOWANCE MADE BY THE LD. REVENUE AUTHORITIES TOWARDS COMMISSION PAYMENT FO R BOTH THE RELEVANT ASSESSMENT YEARS IS NOT WARRANTED. THEREFORE, WE HEREBY DIRECT THE LD. AO TO DELETE THE ADDITION MADE FOR RS. 2 LAKHS AND RS. 10 LAKHS FOR THE AYS 2009 - 10 AND 2010 - 11 RESPECTIVELY TOWARDS COMMISSION EXPENSES. 4. LD.DR FAILS TO PIN POINT ANY DISTINCTION SINCE THE ASSESSEE HAS FILED IDENTICAL DETAILED EVIDENCE ALL ALON G QUA THE PAYMENT OF COMMISSION EXPENDITURE. WE THEREFORE ADOPT RULE OF CONSISTENCY TO DELETE THE IMPUGNED COMMISSION DISALLOWANCE AMOUNTING TO RS. 33,00, 000/ - . THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOVE TERMS. PRONOUNCED IN OPEN COURT ON 17 TH AUGUST 2021. SD/ - SD/ - (L.P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 17 TH AUGUST, 2021. * GMV ITA 280/HYD/2020 AY : 2011 - 12 SRI VIKAS HISARIYA VS. CIT(OSD), RANGE - 10,HYD. 4 COPY OF THE ORDER FORWARDED TO: 1. SRI VIKAS HISARIYA , C/O SRI S.RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, 3 - 6 - 643, STREET NO.9, HIMAYATNAGAR, H YDERABAD - 500 029 ,TELANGANA. 2. CIT(OSD), RANGE 10, HYDERABAD 3. ACIT, RANGE 10 , HYDERABAD. 4. CIT(A) - 6, HYDERABAD 5. PR.CIT - 6, HYDERABAD 6 . DR, ITAT, HYDERA BAD. 7 . GUARD FILE.