TRANSGLOBAL, MUMBAI V. ACIT 15(3), MUMBAI

ITA 2859/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1790 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 31-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 12-04-2013
• Court: TRIBUNAL
• Department Lawyers: N R AGARWAL
• Assessee Lawyers: G NATHA KUMAR

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI R.C. SHARMA(ACCOUNTANT MEMBER) AND SHRI AMARJIT SINGH (JUDICIAL MEMBER) ITA NO. 2859 /MUM/201 3 ASSESSMENT YEAR: 20 09 - 1 0 M/S TRANSGLOBAL VS. ACIT 15(3) GALA NO. 9, SUYOL INDUSTRIAL MATRU MANDIR ESTATE PREMISES LBS MARG MUMBAI VIKHROLI (W) MUMBAI PAN NO. AAEFT2328Q (APPELLANT) (RESPONDENT) REVENUE BY : SHRI. N.R. AGARWAL ASSESSEE BY : SHRI. G. NATHA KUMAR DATE OF HEARING : 0 6 /09/2016 DATE OF PRONOUNCEMENT : 02 / 12 /2016 O R D ER PER R.C. SHARMA, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) FOR THE AY 2009 - 10, IN THE MATTER OF ORDER PASSED UNDER SECTI ON 143 (3) OF THE IT ACT. 2. IN THIS APPEAL ASSESSEE IS AGGRIEVED FOR DISALLOWANCE OF COMMISSION OF RS. 26 ,45,772/ - BY TREATING THE SAME AS UNREASONABLE AND EXCESSIVE. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 2 4. FACTS IN BRIEF ARE THAT AS SESSEE IS ENGAGED IN TEXTILE BUSINESS & IN WHOLE COUNTRY 99% OF TEXTILE BUSINESS IS DONE THROUGH THE BROKERS ONLY. RIGHT FROM BUYING OF GREY CLOTHES, PROCESSING, STICHING & SELLING IS DONE ONLY BY BROKERS. AO DISALLOWED COMMISSION PAYMENT BY OBSERVING THAT RATE OF COMMISSION ON THE SALE EFFECTED BY THE ASSESSEE AS COMPARE D TO THE RATE OF COMMISSION ON SALE EFFECTED IN PREVIOUS YEAR WAS MORE. AO ALSO OBSERVED THAT ASSESSEE HAS NOT FURNISHED JUSTIFICATION OF FURTHER SERVICES RENDERED BY ITS COMMISSION AGENT. THE AO ALSO OBSERVED THAT IN SOME CASES COMMISSION WAS PAID EVEN BEFORE REND ERING ANY SERVICES I.E; EFFECTING ANY SALE AND PURCHASE THROUGH THESE AGENTS. 5. BY THE IMPUGNED ORDER LD. CIT(A) CONFIRMING THE DISALLOWANCE AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. LD. AR APPEARING ON BEHALF OF THE ASSESSEE CONTENDED THAT ALL THE DOCUMENTARY EVIDENCES WITH REGARD TO THE RENDERING OF SERVICES HAVE BEEN FILED ALONGWITH THE CONFIRMATION FOR RECEIPT OF COMMISSION BY RESPECTIVE COMMISSION AGENT ON WHI CH TDS WAS ALSO DEDUCTED AND RESPECTIVE COMMISSION INCOME WERE ALSO OFFERED BY THEM IN THEIR RESPECTIVE RETURN OF INCOME. HE FURTHER CONTENDED THAT THE COMMISSION EXPENSES INCURRED BY THE ASSESSEE ARE ON ACCOUNT OF BOTH THE PURCHASES & SALES MADE FOR WHIC H FOLLOWING DOCUMENTS WERE FILED. 3 A) CONFIRMATION WITH PAN & ITR RETURNS OF THE AGENTS ARE FILED WITH THE A.O. B) CONFIRMATION FROM SUPPLIERS & CUSTOMERS THAT AGENTS HAVE RENDERED SERVICES C) COMMISSION IS PAID BY CHEQUES D) AGENTS ARE ASSESSED WITH TAX HENCE IDENTITY IS ESTABLISHED E) TDS IS DEDUCTED FROM COMMISSION PAYMENTS F) NATURE OF SERVICES RENDERED & NEED FOR COMMISSION AGENT IS EXPLAINED. 7. ON THE OTHER HAND LD. DR RELIED ON THE ORDER OF THE AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREF ULLY GONE THROUGH THE DOCUMENTARY EVIDENCES FILED BEFORE THE LOWER AUTHORITIES TO SUBSTANTIATE THE CLAIM OF EXPENSES ON COMMISSION. DURING THE YEAR, ASSESSEE HAD PAID COMMISSION TO 16 PARTIES RANGING FROM 2% TO 5% ON THE AMOUNT OF SALES / PURCHASES EFFECTE D BY THEM ON BEHALF OF ASSESSEE. WE FIND THAT IN SOME OF THE CASES THE RESPECTIVE PARTIES TO WHOM SALES WERE MADE OR FROM WHOM PURCHASES WERE EFFECTED BY THE ASSESSEE HAD CONFIRMED RENDERING OF SERVICES AND RECEIPT OF COMMISSION ON THE SAME. A FTER GOING TH ROUGH THESE DOCUMENTARY EVIDENCES AS PLACED ON RECORD, WE FIND THAT SERVICES WERE RENDERED BY MR. A NSHUL ARVIND GADIA, MR. NARAYAN SNGH NAURKA, MR. BHAWANI SINGH NARUKA, MR. MANINDER 4 SINGH AJIMAL, MR. RITIK AGARWAL, MR. DHIRAJLAL KARSANJI MEHTA, MR. PRIYA NKAR R. PARMAR, MR. RAMINDER SINGH WALIA, MR. RAJKUMAR J. VISHWAKARMA, MR. KIRANJEET KAUR AJIMAL, MR. RAJENDRA H. UPADHYAY AND MR. AKSHAT D. ADUKIA . CONFIRMATION FOR RECEIPT OF CHEQUE ALONGWITH BASIS FOR COMPUTATION OF COMMISSION WHICH RANGES FROM 2% TO 5% WERE ALSO FILED. ASSESSEE HAD DEDUCTED TAX AT SOURCES ON SUCH PAYMENT OF COMMISSION . IN VIEW OF THE DOCUMENTARY EVIDENCES SO FILED IN SUPPORT OF THE SERVICES RENDERED, COMMISSION SO PAID, INCOME SO RECEIVED BY RESPECTIVE COMMISSION AGENTS AND THE CERTIFIC ATES SO FILED BY THE RESPECTIVE AGENTS, WE DO NOT FIND ANY JUSTIFICATION FOR THE DISALLOWANCE OF COMMISSION SO PAID BY THE ASSESSEE TO THESE AGENTS. ACCORDINGLY, AO IS DIRECTED TO ALLOW COMMISSION PAID TO THESE PARTIES . 9. I N RESPECT OF COMMISSION SO PAID TO THE REMAINING PARTIES , W E RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR REEXAMINING THE SAME AND FOR DECIDING T HE ALLOWABILITY OF COMMISSION A FRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. W E DIRECT ACCORDINGLY. 9. IN THE RESULT APP EAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 5 ORDER PRONOUNCED IN THE OPEN COURT ON 02 / 12 / 2016. SD/ - SD/ - ( AMARJIT SINGH ) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 02 / 12 /2016 AG (ON TOUR) /KARUNA SR.P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI