Sh. Balbir Singh Chhabra, New Delhi V. ACIT, New Delhi

ITA 3058/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7192 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 20-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 16-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASIS JAISWAL
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-II : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.3058/DEL/2014 ASSESSMENT YEAR : 2008-09 BALBIR SINGH CHHABRA, 8/14, WEA, ABDUL AZIZ ROAD, KAROL BAGH, NEW DELHI. PAN: AFBPC1513Q VS. ACIT, CIRCLE-33(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASIS JAISWAL, ADVOCATE DEPARTMENT BY : SHRI DEEPAK GARG, SR. DR DATE OF HEARING : 20.06.2016 DATE OF PRONOUNCEMENT : 21.06.2016 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A) ON 28.2.2014 IN RELATION TO TH E ASSESSMENT YEAR 2008-09. 2. THE FIRST GROUND IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.50,000/- ON AD HOC BASIS OUT OF COMMISSION PAYME NT. ITA NO.3058/DEL/2014 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF HOTEL AND GAS AGENCY. THE ASSES SEE CLAIMED DEDUCTION FOR A SUM OF RS.2,94,036/- ON ACCOUNT OF COMMISSION PAID TO DRIVERS FOR HOTEL BUSINESS. THE AO MADE DISALLOWANCE OF RS.50,0 00/- BY MENTIONING THAT THE ASSESSEE AGREED TO SURRENDER TH IS AMOUNT BECAUSE OF HIS INABILITY TO FURNISH NECESSARY CONFIRMATIONS FR OM TAXI DRIVERS TO WHOM THE COMMISSION WAS PAID. THE ASSESSEE CHALLEN GED THE DECISION OF THE AO URGING THAT NO SURRENDER WAS MADE. THERE WAS NO RELIEF IN THE FIRST APPEAL. THE ASSESSEE IS AGGRIEVED AGAINST TH E CONFIRMATION OF ADDITION. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT T HE ASSESSEE PAID COMMISSION TO TAXI DRIVERS WHO BROUGHT CUSTOMERS FO R HOTEL BUSINESS. THE AO HAS ACCEPTED THE GENUINENESS OF PAYMENT OF C OMMISSION WHICH IS EVIDENT FROM THE FACT THAT HE ALLOWED DEDUCTION OF RS.2.44 LAC AS AGAINST THE TOTAL PAYMENT OF RS.2.94 LAC. THE MAIN REASON FOR MAKING OF THE DISALLOWANCE IS THAT THE ASSESSEE DID NOT PRODU CE NECESSARY ITA NO.3058/DEL/2014 3 CONFIRMATIONS FROM TAXI DRIVERS. PAGE 36-52 OF THE PAPER BOOK ARE VOUCHERS BEARING SIGNATURES OF THE DRIVERS TO WHOM PAYMENT WAS MADE. THIS SHOWS THAT THE PAYMENT WAS MADE BY THE ASSESSE E AFTER RECEIVING THE SIGNATURES OF DRIVERS ON THE VOUCHERS. IN THE ABSENCE OF THE AVAILABILITY OF COMPLETE DETAILS AND IN THESE PECU LIAR FACTS, I AM OF THE CONSIDERED OPINION THAT IT WILL BE REASONABLE TO RE STRICT THE DISALLOWANCE FROM RS.50,000/- TO RS.25,000/-. I ORDER ACCORDING LY. 5. THE OTHER GROUND IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.6,13,814/-, BEING THE SUNDRY CREDITORS APPEARING IN THE BUSINESS OF GAS. THE ASSESSEE HAD SHOWN CERTAIN CREDITORS. THE AO ISSUED NOTICES U/S 133(6) TO M/S MANJIT KAUR, SHRI DHARAM SINGH, M /S RAJAT BULK CARRIERS, M/S PAWAN BULK CARRIERS FOR VERIFICATION, WHICH WAS RETURNED UNDELIVERED. THE AO ADDED RS.6,13,814/-, BEING OU TSTANDING BALANCE IN SUCH UNCONFIRMED ACCOUNTS. THE LD. CIT(A) UPHELD TH E DISALLOWANCE. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED FROM THE PAPER B OOK THAT THESE AMOUNTS REPRESENT PAYABLES TO THE PERSONS WHO WERE HAVING R UNNING ACCOUNTS ITA NO.3058/DEL/2014 4 WITH THE ASSESSEE IN PROVIDING TRANSPORTATION FOR G AS AGENCY. COPIES OF THESE ACCOUNTS ARE AVAILABLE ON RECORD, FROM WHICH IT IS DISCERNIBLE THAT ALL THE OUTSTANDING AMOUNTS WERE SETTLED IN SUBSEQU ENT YEARS. PAYMENTS TO THESE PERSONS WERE MADE AFTER DUE DEDUCTION OF T AX AT SOURCE. MERELY BECAUSE THE CREDITORS DID NOT RESPOND TO THE AOS S UMMONS U/S 133(6) CANNOT BE A REASON FOR MAKING DISALLOWANCE, MORE SO , WHEN THE CONFIRMATIONS WERE DULY FILED AND THESE ARE THE RUN NING ACCOUNTS OF THE CREDITORS PROVIDING TRANSPORTATION IN THE ASSESSEE S GAS AGENCY BUSINESS. UNDER THESE CIRCUMSTANCES, I ORDER FOR THE DELETION OF ADDITION. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21.06.201 6. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, JUNE, 2016. DK ITA NO.3058/DEL/2014 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.