M/s. Sharda Spuntex (P) Ltd., JAIPUR V. DCIT, BHILWARA

ITA 370/JODH/2010

• Counselvise Citation: 37023314 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-12-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 31-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M N MAURYA

Judgement Text

1 ITA 370-10 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 370/JODH/2010 ASSTT. YEAR : 2003-04. M/S. SHARDA SPUNTEX PVT. LTD., VS. THE DCIT, CIRC LE BHILWARA, LAXMI BHAWAN, BAZAR NO. 3, BHILWARA. BHILWARA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.C. PARWAL RESPONDENT BY : SHRI M.N. MAURYA DATE OF HEARING : 13.12.2011. DATE OF PRONOUNCEMENT : 15.12.2011. ORDER DATED : 15/12/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2003-04. 2. THE ASSESSEE IS OBJECTING IN CONFIRMING THE DISA LLOWANCE OF COMMISSION OF RS. 3,48,835/- MADE BY ASSESSING OFFICER BY INVOKING PR OVISIONS OF SECTION 40A(2)(B) OF THE IT ACT. 3. WHILE MAKING THE ABOVE ADDITION, THE ASSESSING O FFICER OBSERVED THAT ASSESSEE HAS PAID COMMISSION TO M/S. SHUBHAM SYNTEX AT 1%. THE ASSESSING OFFICER TREATED THE PAYMENT AS EXCESSIVE ON THE GROUND THAT PAYMENT TO OTHER SUB-BROKERS IS PAID @ 0.5% TO 2 0.75%. HE, THEREFORE, MADE DISALLOWANCE OF RS. 3,4 8,835/- UNDER SECTION 40A(2)(B). THE LD. CIT (A) CONFIRMED THE ACTION OF THE ASSESSING O FFICER. 4. THE LD. COUNSEL OF THE ASSESSEE FILED WRITTEN SU BMISSIONS. 5. ON THE OTHER HAND, THE LD. D/R PLACED RELIANCE O N THE ORDER OF LD. CIT (A). 6. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN ITS APPEAL. T HE LD. CIT (A) OBSERVED IN HIS ORDER THAT ASSESSEE IS RECEIVING COMMISSION AT 1% FROM PRINCIP AL COMPANY AND ALSO PAID COMMISSION OF 1% TO M/S. SHUBHAM SYNTEX, WHICH IS S ISTER CONCERN OF THE ASSESSEE. THEREFORE, HE CONFIRMED THE DISALLOWANCE. HOWEVER, THE FACTS ARE DIFFERENT. ASSESSEE IS RECEIVING COMMISSION @ 1.5% OR MORE. THE CHART OF RECEIVING COMMISSION HAS BEEN TABULATED IN THE WRITTEN SUBMISSION FILED AND IT IS SEEN THAT COMMISSION RECEIVED BY ASSESSEE IS @ 1.5% OR MORE. AGAINST THIS, THE ASSE SSEE PAID 1% COMMISSION TO M/S. SHUBHAM SYNTEX THROUGH WHOM THE WORK WAS GOT DONE. IT IS SEEN THAT THE MAJOR BUSINESS IS CARRIED OUT BY ASSESSEE THROUGH M/S. SHUBHAM SYN TEX, WHO IS MAINLY DEALING FOR THE ASSESSEE WHEREAS THE OTHER BROKERS ARE DOING WORK F OR VARIOUS COMPANIES. IT IS FURTHER SEEN THAT M/S. SHUBHAM SYNTEX IS REGULARLY ASSESSED TO TAX AND HAVE SHOWN THE BROKERAGE RECEIVED BY IT IN ITS RETURN OF INCOME. IT IS ALSO SEEN THAT 1% COMMISSION IS ALSO PAID TO ANOTHER PARTY I.E. SHRI DEVKINANDAN BAGRODIA WHICH HAS BEEN ALLOWED. ONE MORE FACT IS ALSO SEEN THAT M/S. SHUBHAM SYNTEX HAS PROVIDED INT EREST FREE ADVANCE OF RS. 16,00,000/- TO THE ASSESSEE. KEEPING IN MIND ALL THESE FACTS A ND CIRCUMSTANCES, WE HOLD THAT DISALLOWANCE OF PART COMMISSION WAS NOT JUSTIFIED. ACCORDINGLY, THE SAME IS DELETED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . 3 8. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15. 12.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR, COPY FORWARDED TO :- M/S. SHARDA SPUNTEX PVT. LTD., BHILWARA. THE DCIT, CIRCLE BHILWARA, BHILWARA. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 370/JODH/2010) BY ORDER, AR ITAT JODHPUR.