M/s. Ravindu Motors Private Limited, Bangalore V. Assistant Commissioner of Income Tax, Circle-5(1)(1), Bangalore

ITA 306/BANG/2023

AI Insights

The case involves appeals by Ravindu Motors Pvt. Ltd. against the orders of the NFAC, Delhi, for the assessment years 2017-18 and 2018-19. The primary issues in the appeals were the disallowance of commission paid to a Director and a mismatch in TDS as reflected in 26AS compared to the books of accounts. The assessee argued that the commission was performance-based and supported by a Board Resolution, which was not considered by the lower authorities. The Revenue contended that the commission was essentially dividends and highlighted the discrepancies in TDS records. The Tribunal found that the CIT(A) had not adequately verified the assessee's claims and remanded the issues for further examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124382 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-07-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 16-04-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRASHANTH KUMAR
• Keywords: Opportunity of being heard; TDS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA No.306 & 307/Bang/2023 Assessment year : 2017-18 & 2018-19 Ravindu Motors Pvt. Ltd., No.25, Chord Road, Opp. ISKON Temple, Rajajinagar Industrial Suburb, Bengaluru. PAN – AABCR 3749 K Vs. The Asst. Commissioner of Income- tax, Circle-5(1)(1), Bengaluru. APPELLANT RESPONDENT Assessee by : Shri Prashanth Kumar, C.A Revenue by : Shri Sunil Kumar Singh, CIT (DR) Date of hearing : 12.07.2023 Date of Pronouncement : 18.07.2023 O R D E R Per Beena Pillai, Judicial Member The present appeals are filed by the assessee against the orders dated 13/03/2023 for the assessment year 2017-18 and 10/02/2023 for the assessment year 2018- 19 respectively passed by the NFAC, Delhi. 2. It is submitted by the Ld.AR that, facts arising in respect of the issue being the subject matter of these appeals are identical. He submitted that, the ITA No.306 & 307/Bang/2023 Page 2 of 5 disallowance was made by the Ld.AO in respect of commission made to the Director u/s 36(iii)(a) of the Act, and short fall in the amount reflected in 26AS vis-à-vis the claim of assessee declared in the books of accounts. The Ld.AR submitted that the reason for which the claim was disallowed by the Ld.CIT(A) is that, the details were not furnished in order to substantiate the commission paid at 5% of the profits before taxing that was to one of the Directors. He submitted that the commission paid to the Di4rector based on her performance and in consonance with the terms of her employment, supported by the Board Resolution. It is the submission of the Ld.AR that, these documents were never been considered before making the disallowance by the authorities. 3. On the contrary, the Ld.DR submitted that, the commission paid to the Director has been rightly denied for both the years under consideration, as these are dividends that have been paid in the grab of commission. He submitted that, the disallowance confirmed by the Ld.CIT(A) is correct on the mismatch in respect of the TDS appearing in 26AS, which is only pertaining to assessment year 2017-18. The Ld.DR did not object to the issue to be remanded for necessary verification. 4. We have considered the submission advanced by both the sides in the light of the records placed before us. ITA No.306 & 307/Bang/2023 Page 3 of 5 We note that the Ld.CIT(A) has not verified the claim of the assessee in the light of the documents/evidences filed on the issue of disallowance of commission. We, therefore, remand this issue to the Ld.CIT(A) with a direction to carry out necessary verification in respect of the same. 4.1 We also direct, in the event, the Ld.CIT(A) deemed to feel proper to call for remand report from the Ld.AO, he may do so, and then consider the claim in accordance with law. He shall carry out necessary verification in order to ascertain the correct nature of the payment made by the asseseee to the Director. 4.2 Needless to say proper opportunity of being heard to the assessee may be given. 5. In respect of mismatch of the TDS with the returns in 26AS, the Ld.CIT(A) is directed to call for remand report from the Ld.AO based on the evidences filed by the assessee. The assessee is directed to file the necessary documents in support of its claim. 5.1 Needless to say proper opportunity of being heard to the assessee may be given. Accordingly, the grounds raised by the assessee stands for statistical purpose. ITA No.306 & 307/Bang/2023 Page 4 of 5 6. In the result, the appeals of the assessee stands allowed for statistical purpose. Order pronounced in court on 18 th July, 2023. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, 18 th July, 2023 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore. ITA No.306 & 307/Bang/2023 Page 5 of 5