MARUDHAR POLYCOT (I) P. LTD, MUMBAI V. ASTT CIT CIR 4(2), MUMBAI

ITA 3089/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1742 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-02-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 19-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK J PATIL
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA NO. 3089/MUM/2011(A.Y.2005-06) M/S. MARUDHAR POLYCOT (INDIA) PVT. LTD., 329/31, BADAM WADI, GROUND FLOOR, KALBADEVI ROAD, MUMBAI 400 002. PAN:AADCM 8286G (APPELLANT) VS. THE ACIT, CIR. 4(2), AAYKAR BHAVAN, MK ROAD, MUMBAI - 20. (RESPONDENT) APPELLANT BY : SHRI ASHOK J. PATIL RESPONDENT BY : SHRI MOHIT JAIN DATE OF HEARING : 26/02/2013 DATE OF PRONOUNCEMENT : 26/02/2013 ORDER PER I.P.BANSAL, J.M THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-8, MUMBAI DATED 03/02/20 11 FOR ASSESSMENT YEAR 2005-06. THE SUBJECT MATTER OF GROUND OF APPEAL IS A DISALLOWANCE OF SUM OF RS.6,67,412/- PERTAINING TO COMMISSION. 2. THE FACTS NOTED IN THE ASSESSMENT ORDER ARE THA T THE ASSESSEE IS A WHOLE SALE TRADER IN TEXTILE GOODS. IT CLAIMED TO HAVE PAID COMMISSION TO VARIOUS PARTIES AMOUNTING TO RS.66,74,122/-. TO VE RIFY THE FACTS OF PAYMENT OF COMMISSION THE AO ISSUED LETTERS UNDER SECTION 133(6) OF THE INCOME TAX ACT, 1961 (THE ACT) TO VARIOUS PARTIES. FROM SOM E OF THEM HE RECEIVED CONFIRMATION AND FOR REST OF THE PARTIES NO REPLY WAS RECEIVED. THE ASSESSEE WAS SHOW CAUSED AND ASKED TO FILE CERTAIN OTHER EV IDENCES REGARDING SERVICES ITA NO. 3089/MUM/2011(A.Y.2005-06) 2 RENDERED BY THE COMMISSION AGENTS SUCH AS DEBIT NOT ES, PLACING OF ORDER ETC. IN RESPONSE, THE ASSESSEE HAS FILED CONFIRMATI ON ON HIS LETTER HEAD FROM VARIOUS PARTIES, WHICH WAS FILED ON 26/12/2007. AC CORDING TO AO THERE WAS NO TIME LEFT FOR FURTHER INVESTIGATION AND HE FOUND TH AT CONFIRMATION WITH REGARD TO AN AMOUNT OF RS.7,09,198/- WERE NOT YET FILED. I T IS FOR THIS REASON THE AO HAS DISALLOWED 10% OF THE ASSESSEES CLAIM AMOUNTIN G TO RS.6,67,412/- ON ACCOUNT OF POSSIBLE LEAKAGES. AN APPEAL WAS FILED BEFORE LD. CIT(A). IT IS RECORDED BY LD. CIT(A) THAT DURING THE APPELLATE PR OCEEDINGS THE AO WAS DIRECTED TO ASCERTAIN IDENTITY OF THE PERSONS TO WH OM COMMISSION WAS PAID AND ALSO GENUINENESS OF THE COMMISSION PAID AS PER LETT ER ISSUED BY LD. CIT(A) ON 23/1/2009. THE AO SUBMITTED THE REPORT DATED 12/1 /2011 IN WHICH IT WAS POINTED OUT THAT NO CONFIRMATION WAS FILED BY THE A SSESSEE WITH REGARD TO COMMISSION GIVEN TO THREE PARTIES NAMELY (I) SHRI B .N.PAREKH,(II) M/S. SIBA TEXTILE AGENCY AND (III) M/S. NAVJYOTI TEXTILE AGE NCY. HOWEVER, ASSESSEE INFORMED LD. CIT(A) THAT CONFIRMATION WITH REGARD TO THESE THREE PARTIES ARE AVAILABLE IN THE FILE. TO EXAMINE THE CONTENTION O F THE ASSESSEE THAT THESE CONFIRMATIONS WERE FILED BEFORE AO, THE ASSESSEE WA S REQUIRED TO FURNISH THE EVIDENCE AS PER ORDER SHEET NOTING DATED 1/12/2011. THE ASSESSEE ON 3/2/2011 HAS FURNISHED THE COPY OF LETTER DATED 29/ 2/2009 BEARING THE STAMP OF AO DATED 29/2/2009, IN WHICH IT WAS STATED THAT THESE CONFIRMATIONS ARE FILED. ON EXAMINATION OF THESE CONTENTIONS LD. CIT (A) HAS FOUND THAT ASSESSEE COULD NOT FURNISH EVIDENCE WITH REGARD TO CONFIRMAT ION FROM SHRI. B.N.PAREKH AND M/S. SIBA TEXTILE AGENCY, THEREFORE, HAS FAILED TO PROVE THE GENUINENESS OF THE COMMISSION PAYMENT. HE HAS UPHELD THE ADDITIO N MADE BY THE AO. 3. AFTER NARRATING THE FACTS IT WAS SUBMITTED BY LD . AR THAT THE COPY OF REMAND REPORT BY THE AO SUBMITTED TO LD. CIT(A) IS FILED ON PAGE 1 OF THE PAPER BOOK, WHEREIN HE HAS MENTIONED THAT IN RESPONSE TO THE NOTICE ISSUED TO THE PARTIES (I) SHRI B.N.PAREKH,(II) M/S. SIBA TEXTILE AGENCY AND (III) M/S. NAVJYOTI TEXTILE AGENCY HAS FAILED TO FILE CONFIRMATION, TH EREFORE, THE ADDITION SHOULD BE UPHELD. LD. AR ALSO REFERRED TO THE LETTER SUBMI TTED BY THE ASSESSEE TO LD. ITA NO. 3089/MUM/2011(A.Y.2005-06) 3 CIT(A) DATED 21/1/2011, IN WHICH IT WAS MENTIONED THAT AO IS INCORRECT IN SAYING THAT ASSESSEE HAS FAILED TO PROVE THE GENU INENESS OF COMMISSION PAYMENT TO (I) SHRI B.N.PAREKH, (II) M/S. SIBA TEXT ILE AGENCY AND (III) M/S. NAVJYOTI TEXTILE AGENCY. IT WAS SUBMITTED THAT THE ASSESSEE HAS FURNISHED THESE CONFIRMATIONS WHICH ARE AVAILABLE ON THE FILE AND IT WAS ALSO SUBMITTED THAT ASSESSEE HAS DEDUCTED TDS AS PER RULES AND HAS ALSO MADE THE PAYMENT. ALONGWITH THE SAID LETTER TWO LETTERS ADDRESSED TO ITO 4(2)(2) DATED 12/1/2009 AND 29/2/2008 WERE FILED ACCORDING TO WHICH CONFIRM ATION RECEIVED FROM (I) SHRI B.N.PAREKH,(II) M/S. SIBA TEXTILE AGENCY AND (III) M/S. NAVJYOTI TEXTILE AGENCY HAVE BEEN FILED ALONGWITH THE CONFIRMED CO PY OF ACCOUNT. THUS IT WAS SUBMITTED BY HIM THAT ALL THE CONFIRMATIONS HAVING BEEN FILED, NO DISALLOWANCE SHOULD HAVE BEEN UPHELD BY THE LD. CIT(A). 4. ON THE OTHER HAND, LD. D.R RELYING UPON THE ORDE R OF AO AND LD. CIT(A) PLEADED THAT DISALLOWANCE HAS RIGHTLY BEEN UPHELD AND THE ORDER OF LD. CIT(A) SHOULD BE UPHELD. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE AO HAS MADE THE ADD ITION ON THE GROUND THAT LITTLE TIME IS LEFT WITH HIM FOR FRAMING THE ASSES SMENT. BEFORE, LD. CIT(A) IT WAS CLAIMED THAT ALL THE CONFIRMATIONS ARE ON THE FILE OF THE AO. LD. CIT(A) HAS CALLED FOR THE REMAND REPORT. ON THE BASIS OF NON- AVAILABILITY OF CONFIRMATIONS FROM (I) SHRI B.N.PAREKH, (II) M/S. SIBA TEXTILE AG ENCY AND (III) M/S. NAVJYOTI TEXTILE AGENCY THE AO HAS JUSTIFIED THE DISALLOWAN CE MADE BY HIM. COPY OF LETTERS VIDE WHICH THESE CONFIRMATIONS WERE FILED BY THE ASSESSEE BEFORE THE AO ARE ALSO PLACED ON RECORD. IN THESE CIRCUMSTANC ES, WE CONSIDER IT JUST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF AO TO E XAMINE THE CONTENTION OF THE ASSESSEE REGARDING THESE THREE CONFIRMATIONS. IF THEY ARE ON RECORD, THE AO AFTER VERIFYING THE CONTENTION OF THE ASSESSEE TH AT THESE CONFIRMATIONS ARE ON RECORD, WILL DELETE THE ADDITION. IF THOSE ARE NOT FOUND TO BE ON FILE THEN THE AO SHALL GIVEN AN OPPORTUNITY TO THE ASSESSEE TO PLACE THEM ON RECORD FOR THE ITA NO. 3089/MUM/2011(A.Y.2005-06) 4 REASON THAT THESE ARE SHOWN TO BE FILED WITH THE CO NCERNED AO AND THERE IS A RECEIPT ON THE LETTER ACKNOWLEDGING THE FILING OF T HAT LETTER. AFTER VERIFYING THESE CONFIRMATIONS THE AO SHALL DELETE THE ADDITION IF THEY ARE FOUND TO BE IN ORDER. WITH THESE OBSERVATIONS WE RESTORE THIS ISSUE TO TH E FILE OF AO. WE DIRECT ACCORDINGLY. FOR STATISTICAL PURPOSES THE APPEAL F ILED BY THE ASSESSEE IS TREATED TO BE ALLOWED IN THE MANNER AFORESAID. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON TH E 26 TH DAY OF FEB.2013 SD/- SD/- (RAJENDRA SINGH ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 26 TH FEB.2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R B BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM.