ITO 28 (2)(4), Mumbai V. SHRI. PRAMOD KUMAR AGARWAL, Mumbai

ITA 3723/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4824 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 29-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B BAGCHI
• Keywords: Additional evidence; TDS; FORM 26AS
• Section: 15

Judgement Text

1 ITA 3126/MUM/2019 ITA 3723/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI RAJESH KUMAR (ACCOUNTANT MEMBER) I.T.A. NO.3126/MUM/2019 (ASSESSMENT YEAR 2014-15) SHRI PRAMOD KUMAR AGRAWAL 608, MAHAVIR ICON, WING A PLOT NO.89/90, SECTOR 15 CBD BELAPUR, NAVI MUMBAI-400 706 PAN : AAHPA4843Q VS ITO-28(2)(4), MUMBAI APPELLANT RESPONDENT I.T.A. NO.3723 /MUM/2019 (ASSESSMENT YEAR 2014-15) ITO-28(2)(4), MUMBAI VS SHRI PRAMOD KUMAR AGRAWAL 608, MAHAVIR ICON, WING A PLOT NO.89/90, SECTOR 15 CBD BELAPUR, NAVI MUMBAI-400 706 PAN : AAHPA4843Q APPELLANT RESPONDENT REVENUE BY SHRI B. BAGCHI, DR RESPONDENT BY SHRI GAURAV KABRA, AR DATE OF HEARING 20-09-2021 DATE OF PRONOUNCEMENT 30-09-2021 2 ITA 3126/MUM/2019 ITA 3723/MUM/2019 O R D E R PER SAKTIJIT DEY (JM) AFORESAID CROSS APPEALS ARISE OUT OF ORDER DATED 1 8-03-2019 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-26, MUMBAI FOR THE ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE, IN HIS APPEAL, HAS CHALLENGED THE DECISION OF LEARNED COMMISSIONER (APPEALS) IN PARTLY SUSTAINING THE ADD ITION OF COMMISSION INCOME. WHEREAS, THE REVENUE IN ITS APPEAL HAS RAISED A TEC HNICAL ISSUE REGARDING VIOLATION OF RULE 46A OF THE INCOME TAX RULES. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIVI DUAL AND EARNS COMMISSION AND INCENTIVES AS A CORPORATE INSURANCE AGENT. IN COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER, WHILE VERIFYING FORM 26AS NO TICED THAT THE ASSESSEE HAS RECEIVED THE FOLLOWING COMMISSION INCOME AND INCENT IVE:- 1. IFFCO TOKIO GENERAL INSURANCE CO LTD (ITGICL) RS. 1,90,18,280/- 2. UNITED INDIA INSURANCE CO LTD (UICL) RS.1,06,66,015/- RS.2,96,84,295/- 4. NOTICING THAT THE AFORESAID COMMISSION INCOME WA S NOT OFFERED TO TAX BY THE ASSESSEE, THE ASSESSING OFFICER ISSUED A SHOW C AUSE NOTICE TO EXPLAIN THE REASON FOR NOT OFFERING THE INCOME. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT ACTUALLY EASYLINK INSURANCE SERVICES PVT LTD (EISPL), WHEREIN, HE IS THE MANAGING DIRECTOR, IS THE CORPOR ATE AGENT OF ITGICL IN RESPECT OF PRAVASI BHARATIYA BIMA YOJNA (PBBY) POLICIES. WH ILE INCENTIVE IN RESPECT OF THE POLICIES IS CREDITED TO ASSESSEES INDIVIDUAL ACCOU NT, THE COMMISSION INCOME ON 3 ITA 3126/MUM/2019 ITA 3723/MUM/2019 THE PREMIUM PAID IS CREDITED TO THE ACCOUNT OF THE COMPANY, VIZ. EISPL. IT WAS SUBMITTED THAT THE AFORESAID METHOD OF OFFERING THE COMMISSION INCOME AND INCENTIVE IS CONSISTENTLY FOLLOWED OVER THE YEARS. THUS, THE ASSESSEE SUBMITTED THAT THE COMMISSION INCOME SINCE HAS BEEN OFFERED A T THE HANDS OF THE COMPANY, IT IS NOT TAXABLE AGAIN AT HIS HANDS. THE ASSESSIN G OFFICER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND ADDED BACK THE AMOU NT OF RS.2,96,84,295/- TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED, ASSESS EE CONTESTED THE ADDITION BEFORE LEARNED COMMISSIONER (APPEALS). AFTER CONSI DERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON R ECORD, LEARNED COMMISSIONER (APPEALS), THOUGH, UPHELD THE ADDITION OF COMMISSIO N INCOME AT THE HANDS OF THE ASSESSEE; HOWEVER, HE ALLOWED DEDUCTION FOR PROPORT IONATE EXPENDITURE AND ULTIMATELY RESTRICTED THE ADDITION TO RS.70,29,985/ -. 5. REITERATING THE STAND TAKEN BEFORE THE DEPARTMEN TAL AUTHORITIES, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED, COMMISSION INCO ME IS CONSISTENTLY OFFERED AT THE HANDS OF EISPL. HE SUBMITTED, FOLLOWING THE SAM E METHOD IN THE IMPUGNED YEAR ALSO, THE ENTIRE COMMISSION INCOME OF RS.2,96, 84,295/- HAS BEEN OFFERED AS INCOME IN THE RETURN OF INCOME FILED BY EISPL FOR T HE IMPUGNED ASSESSMENT YEAR. THUS, HE SUBMITTED, ANY FURTHER ADDITION AT THE HAN DS OF THE ASSESSEE WOULD AMOUNT TO DOUBLE ADDITION OF THE SAME INCOME. FURTH ER, HE SUBMITTED, THE FACT THAT COMMISSION INCOME RECEIVED FROM ITGICL AND UII CL IS CONSISTENTLY TAXED AT THE HANDS OF EISPL, WOULD BE EVIDENT FROM THE FACT THAT IN ASSESSMENT YEAR 2013- 14, THE TRIBUNAL IN ITA NO.7160/MUM/2018 DATED 18-0 2-2020 HAS DIRECTED THE ASSESSING OFFICER TO ALLOW TDS CREDIT ON THE COMMIS SION INCOME TO ESIPL. 4 ITA 3126/MUM/2019 ITA 3723/MUM/2019 6. WHILE SUPPORTING THE ORDER OF LEARNED COMMISSION ER (APPEALS) ON THE ADDITIONS SUSTAINED, LEARNED DEPARTMENTAL REPRESENT ATIVE SUBMITTED, LEARNED COMMISSIONER (APPEALS) WAS UNJUSTIFIED IN ALLOWING C ORRESPONDING EXPENDITURE BASED ON ADDITIONAL EVIDENCE ADMITTED IN VIOLATION OF RULE 46A. THUS, HE SUBMITTED, THE ISSUE RELATING TO CLAIM OF EXPENDITU RE SHOULD BE RESTORED BACK TO THE ASSESSING OFFICER. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. THE DISPUTE LIES WITHIN A VERY NARROW COMPASS AS TO WHETHER CERTAIN COMMISSION INCOME REMITTED BY ITGICL AND UIICL IS TAXABLE AT T HE HANDS OF THE ASSESSEE. AS COULD BE SEEN FROM RECORD, THE ASSESSEE IS THE MANA GING DIRECTOR OF EISPL. IT IS THE CLAIM OF THE ASSESSEE THAT EISPL IS ACTUALLY THE CO RPORATE AGENT OF THE INSURANCE COMPANIES. FROM THE ASSESSMENT STAGE ITSELF IT IS T HE STAND OF THE ASSESSEE THAT THE ENTIRE COMMISSION INCOME AMOUNTING TO RS.2,96,8 4,295/- HAS BEEN OFFERED AT THE HANDS OF THE COMPANY, VIZ. EISPL. IT IS ALSO TH E STAND OF THE ASSESSEE THAT COMMISSION INCOME IS CONSISTENTLY OFFERED AT THE HA NDS OF EISPL. IN OUR VIEW, THE ORDER PASSED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2013-14, AS MENTIONED ABOVE, SUPPORTS THE AFORESAID CLAIM OF THE ASSESSEE. WHILE DECIDING APPEAL IN ASSESSMENT YEAR 2013-14 THE TRIBUNAL HAS DIRECTED THE ASSESSING OFFICER TO ALLOW TDS CREDIT RELATING TO SUCH COMMISSION INC OME AT THE HANDS OF THE COMPANY. IN OUR VIEW, IF ESIPL IS ACTUALLY THE AGEN T OF THE INSURANCE COMPANIES AND THE COMMISSION INCOME HAS BEEN OFFERED AT THE H ANDS OF EISPL, THERE IS NO REASON TO TAX SUCH INCOME AGAIN AT THE HANDS OF THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO FACTUALLY VERIFY W HETHER THE SUBJECT COMMISSION INCOME HAS BEEN OFFERED AT THE HANDS OF EISPL. IN C ASE IT IS FOUND TO BE SO, NO 5 ITA 3126/MUM/2019 ITA 3723/MUM/2019 FURTHER ADDITION CAN BE MADE AT THE HANDS OF THE AS SESSEE. HOWEVER, THE CORRESPONDING TDS CREDIT HAS TO BE WITHDRAWN FROM T HE ASSESSEE. 8. AS REGARDS GROUNDS RAISED BY THE REVENUE REGARDI NG VIOLATION OF RULE 46A, ON PERUSAL OF RECORD, WE DO NOT FIND ANY SUBSTANTIV E BASIS FOR RAISING SUCH GROUND. IN ANY CASE OF THE MATTER, QUESTION OF ALLOWING PRO PORTIONATE EXPENDITURE WOULD ARISE ONLY IF ANY COMMISSION INCOME IS ADDED AT THE HANDS OF THE ASSESSEE. THEREFORE, WE DO NOT FIND ANY MERIT IN THE GROUNDS RAISED BY THE REVENUE. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES AND REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON 30/09/2021. SD/- SD/- (RAJESH KUMAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 30/09/2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI