DEEPESH GUPTA, Jaipur V. ITO, Jaipur

ITA 301/JPR/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9042 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NEENA JEPH

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES SMC, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA- @ ITA NO. 301/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 SHRI DEEPESH GUPTA, PROP- M/S SMALL SCALE COTTAGE INDUSTRIES, DUSSERA KOTHI, AMER ROAD, JAIPUR. CUKE VS. THE I.T.O., WARD-5(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: ADUPG 0413 A VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : NONE. JKTLO DH VKSJR LS @ REVENUE BY : MRS. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 27/01/2015 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 29/01/2015 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 21/02/2014 BY THE LEARNED CIT(A)-II, JAIPUR FOR A.Y . 2009-10. THE SOLE GROUND OF APPEAL RAISED IS AS UNDER:- ITA 301/JP/2014_ DEEPESH GUPTA VS. ITO 2 1. THAT THE LEARNED CIT(APPEALS) HAS ERRED IN CONFI RMING THE DISALLOWANCE OF RS. 98,122/- OUT OF COMMISSION PAID. THE DISALLOWANCE SUSTAINED IS UNJUSTIFIED AND EXCESSIVE. 2 NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE O F ISSUE OF PROPER NOTICE, CONSEQUENTLY APPEAL IS HEARD EX PART E AFTER HEARING THE LD. DR AND AFTER PERUSAL OF THE RECORD. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN THE BUSINESS OF SELLING HANDICRAFTS ITEMS, CARPETS, JEWELLERY, TEXTI LES ETC. TO TOURISTS. THE ASSESSEE DEBITED AN EXPENDITURE OF RS. 12,26,522/- AS COMMISSION EXPENDITURE CLAIMED TO BE PAID TO THE AGENTS LIKE G UIDES, TAXI DRIVERS ETC., WHO BROUGHT THE TOURISTS TO HIS BUSINESS PREMI SES FOR PURCHASE OF SUCH ITEMS. THE ASSESSING OFFICER, HOWEVER, HELD THAT THE COMMISSION VOUCHERS WERE SELF MADE MENTIONING ONLY NAME OF TOUR GUIDES, TAXI DRIVERS WITH TAXI NUMBER, WHICH ACCORDING TO HIM DIDN T CONSTITUTE PROPER EVIDENCE. IT WAS HELD THAT THE ASSESSEE WAS NO T ABLE TO PROVIDE COMPLETE DETAILS OF RECEPEINTS OF COMMISSION CONSEQ UENTLY, AN AMOUNT OF RS. 98,122/- BEING 8% OF SUCH EXPENDITURE WAS DIS ALLOWED. 4. IN FIRST APPEAL, THE ASSESSEE CONTENDED THAT IN A.Y. 2007-08, THE ASSESSING OFFICER DISALLOWED 8% OF THE COMMISSION EX PENDITURE, WHICH WAS ENHANCED TO 10% BY THE LEARNED CIT(A). THE ITAT V IDE ORDER ITA 301/JP/2014_ DEEPESH GUPTA VS. ITO 3 DATED 10/01/2012 REDUCED IT TO A LUMP SUM OF RS. 50 ,000/-, WHICH WORKS OUT TO 2.27% OF THE COMMISSION. IN A.Y. 2008-0 9, THE LEARNED CIT(A) HIMSELF HAS RESTRICTED THE DISALLOWANCE TO 2.6 2%. IT IS A COMMON PRACTICE IN SUCH TRADE TO PAY COMMISSION TO ESCORTI NG TOUR GUIDES OR TAXI DRIVERS, IT WILL NOT BE POSSIBLE FOR ASSESSEE TO INS IST FOR FULL VOUCHERS IN PRESENCE OF TOURIST FOR THE FEAR OF ADVERSE PUBLICI TY. LD. CIT(A) HOWEVER CONFIRMED THE ADDITION WHICH IS AGITATED BY THE ASSE SSEE IN SECOND APPEAL. 5. THE LEARNED SR.DR RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 6. I HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS A COMMON KNOWLEDGE THAT IN THE TRADE O F SALES OF HANDICRAFTS ITEMS TO THE TOURISTS, THE ESCORTING TO UR GUIDES OR TAXI DRIVERS ARE PAID COMMISSION. IT WILL NOT BE POSSIBLE FOR THE ASSESSEE TO INSIST FOR EACH AND EVERY DETAIL FROM SUCH PERSONS IN PRESENCE OF THE CUSTOMERS. LOOKING AT THE PAST HISTORY, IN SIMILAR CIRCUMSTANCES IN A.Y. 2008-08, THE CIT(A)S REDUCED THE DISALLOWANCE TO @ 2. 62% OF THE COMMISSION AND IN A.Y. 2007-08 TO 2.27%. IN THESE F ACTS AND CIRCUMSTANCES, IN MY CONSIDERED VIEW, A LUMP SUM DIS ALLOWANCE OF RS. ITA 301/JP/2014_ DEEPESH GUPTA VS. ITO 4 25,000/- WILL MEET THE ENDS OF JUSTICE. CONSEQUENTLY , THE DISALLOWANCE IS REDUCED TO AN AMOUNT OF RS. 25,000/-. 6. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/01/2015. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 29 TH JANUARY, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI DEEPESH GUPTA, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD-5(1), JAIPUR. 3. VK;DJ VK;QDR @ CIT(A)-II, JAIPUR 4. VK;DJ VK;QDR @ CIT, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 301/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR