DCIT 14(3)(2), MUMBAI V. SRIRAM CHITS ( MAHARASHTRA) LTD, MUMBAI

ITA 3639/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0966 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 25-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHARAN
• Assessee Lawyers: PRAKASH K JOTWANI

Judgement Text

, , IN THE INC OME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI BEFORE SHRI R.C. SHARMA, AM & SHRI AMARJIT SINGH , JM ./ ITA NO. 3639 /MUM/201 6 ( / ASSESSMENT YEAR :2011 - 12) DCIT - 14(3)(2), 455, 4 TH FLOOR, AAYKAR BHAVAN MUMBAI - 400020. VS. SRIRAM CHITS (MAHARASHTRA) LTD. A - 41/419, BEZZOLA COMPLEX, SION TROMBAY ROAD, MUMBAI - 400001 ./ ./ PAN/GIR NO. : AA ECS7592Q ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI V. VIDHYADHARAN /ASSESSEE BY : SHRI PRAKASH K. JOTWANI / DATE OF HEARING : 01.01.2018 / DATE OF PRONOUNCEMENT : 08.01.2018 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 8 MUMBAI, DATED 15.02.2016 , FOR THE ASSESSMENT YEAR 2011 - 12, IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE I.T. ACT. 2. THE GRIEVANCE OF THE REVENUE RELATES TO CIT(A) S ACTION IN DELETING THE ADDITION MADE BY THE AO OF RS.12,85,02,550/ - BEING DIFFERENCE BETWEEN THE FOREMAN COMMISSION RECEIVABLE OF RS.29,18,07,550/ - AND THE SRIRAM CHITS ITA NO. 3639/MUM/2016 2 FOREMAN COMMISSION ACTUALLY RECEIVED OF RS.16,33,05,000/ - WHILE DISREGARDING THE FACT THAT THE A SSESSEE COMPANY WOULD RECEIVE FOREMAN COMMISSION @ 5 TIMES OF THE AGENCY COMMISSION PAID TO THE AGENTS, WHICH IS DEBITED TO THE PROFIT & LOSS AT RS.5,83,61,510/ - . 3. AT THE OUTSET THE LD. AR PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE F OR THE A.Y. 2010 - 11 WHEREIN SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 17/03/2017 AFTER OBSERVING AS UNDER: - AFTER ANALYZING THE AFOREMENTIONED ORDER PASSED BY LD. CIT(A) AND AFTER HEARING THE ARGUMENTS OF B OTH THE PARTIES, WE FIND THAT THE CIT(A) HAS TAKEN INTO CONSIDERATION THAT THE ASSESSEE EARNED COMMISSION OF 5% ON THE TOTAL CHIT FUND COLLECTION. THE SAID COMMISSION IS SPREAD OVER THE TOTAL PERIOD OF SCHEME AND IN THIS WAY THE ASSESSEE EARNS COMMISSION O N A MONTH TO MONTH BASIS ON THE MONTHLY COLLECTION MADE AND ON THE SUCCESSFUL BIDING BY THE SUBSCRIBERS. AS PER THE FACTS, THE AGENTS ARE PAID A COMMISSION OF 1% OF THE TOTAL CHIT FUND VALUE IN RESPECT OF EACH SUBSCRIBER ENLISTED BY HIM PROVIDED SUCH SUBSC RIBERS PAYS AT LEAST 4 MONTHS INSTALLMENT, IMMEDIATELY ON RECEIPT OF 4 SUCH INSTALLMENTS AND IN THIS WAY THERE IS NO DEFINITE CO - RELATION BETWEEN THE FOREMEN COMMISSION EARNED AND THE AGENCY COMMISSION PAID. AFTER APPRECIATING THE FACTS, THE LD. CIT(A) HAD RIGHTLY DECIDED THAT THE ADDITION MADE BY THE AO IN COMPUTING THE INCOME OF THE ASSESSEE BY APPLYING FIVE TIMES OF THE SRIRAM CHITS ITA NO. 3639/MUM/2016 3 PAYMENT OF THE COMMISSION TO THE AGENTS IS NOT BASED ON ANY OBJECTIVE YARDSTICKS, THEREFORE DELETED THE SAID ADDITIONS. WE HAVE ALSO NOT ICED THAT THE LD. CIT(A) WHILE DECIDING THIS ISSUE HAD ALSO TAKEN INTO CONSIDERATION THE SUBMISSION MADE BY ASSESSEE WHICH ARE CONTAINED IN PARA NO. 4 AND ALSO THE FINDINGS OF AO WHICH ARE CONTAINED IN PARA NO. 3 OF CIT(A)S ORDER. APART FROM THE ABOVE, TH E LD. DR APPEARING FOR THE APPELLANT HAS NOT PLACED ON RECORD ANY NEW FACTS OR CONTRARY JUDGMENTS OF HIGHER COURTS BEFORE US IN ORDER TO CONTROVERT OR REBUT THE FINDINGS RECORDED BY LEARNED CIT (A), AND THEREFORE, THERE ARE NO REASONS FOR US TO DEVIATE FRO M OR INTERFERE INTO THE WELL REASONED FINDINGS RECORDED BY THE LD. CIT (A). THEREFORE, AFTER HEARING BOTH THE PARTIES AND ANALYZING THE IMPUGNED ORDER, WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND WELL RE ASONED. ACCORDINGLY, WE UPHOLD THE SAME AND DISMISS THIS GROUND OF APPEAL FILED BY REVENUE. 4. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL DATED 17/03/2017 WHEREIN EXACTLY SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL BY HOLDING ORDER OF CIT(A) IN ASSESSEES FAVOUR FOR THE ASSESSMENT YEAR 2010 - 11. RESPECTFULLY FOLLOWING THE SAME HELD THE ORDER OF CIT(A). 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08.01.2018 SD/ - ( AMARJIT SINGH ) SD/ - (R.C.SHARMA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 08.01.2018 SRIRAM CHITS ITA NO. 3639/MUM/2016 4 RAHUL SHARMA (SR. P.S.) / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//