ITO 2(1)(1), MUMBAI V. ACROMATIC TRADING P.LTD, MUMBAI

ITA 3865/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4168 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 07-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H, BENCH M UMBAI BEFORE SHRI AMARJIT SINGH, JUDICIAL MEMBER & SHRI G.MANJUNATHA, ACCOUNTANT MEMBER ITA NO.3865/MUM/2016 ( ASSESSMENT YEAR :2010-11 ) ITO-2(1)(1) ROOM NO.543, 5 TH FLOOR AAYKAR BHAWAN M.K.ROAD MUMBAI-400 020 VS. M/S ACROMATIC TRADING PVT.LTD. OFFICE NO.8, APOLLO HOUSE 82/84, BOMBAY SAMACHAR MARG, FORT MUMBAI-400 023 PAN/GIR NO. AAHCA4600J APPELLANT ) .. RESPONDENT ) ASSESSEE BY PRAKASH JHUNJHUNWALA REVENUE BY MANOJ KUMAR SINGH DATE OF HEARING 2 1/08 /201 9 DATE OF PRONOUNCEMENT 23 / 0 8 /201 9 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)4, MUMBAI, DATED 15/03/2016 AND IT PERTAINS TO THE ASSESSMENT YEAR 2 010-11. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. 'THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND F ACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN HOLDING THAT ADDITION MADE O N ACCOUNT OF COMMISSION SHOULD BE RESTRICTED TO 1% INSTEAD OF 5% ADOPTED BY THE ASSESSING OFFICER. ITA NO.3865/MUM/2016 ACROMATIC TRADING PVT.LTD. 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF TRADING AND DEALING IN STEEL SHEET, FILED ITS RETURN OF INCOME FOR AY 2010-11 ON 15/10/2010, DECLARING TOTAL INCOME AT RS. 1,80,561/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT HAS BEEN COMPLETED U/S 144 R.W.S. 145(3) OF THE I.T.ACT, 1961 ON 30/03/2013 AND DETERMINED TOTAL INCOME AT R S. 2,88,27,830/-, WHERE THE AO REJECTED BOOKS OF ACCOU NTS AND ESTIMATED COMMISSION INCOME @ 5% OF TOTAL SALES. TH E ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A). THE ASSESSEE HAS FILED ELABORATE RETURN SUBMISSIONS, ON THE ISSUE AN D ARGUED THAT RATE OF COMMISSION ADOPTED BY THE AO IS EXCESSIVE AND HI GHER, WHEN COMPARED TO SIMILAR NATURE OF BUSINESSES. THE LD.CI T(A), AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE SC ALED DOWN COMMISSION ESTIMATED BY THE AO FROM 5% TO 1% OF TOT AL SALES. AGGRIEVED BY THE LD.CIT(A) ORDER, THE ASSESSEE AS W ELL AS, THE REVENUE HAVE BEEN FILED APPEAL BEFORE THE TRIBUNAL . THE TRIBUNAL VIDE ITS ORDER DATED 23/02/2018 IN ITA NO. 3927/MUM /2016 DISMISSED, APPEAL FILED BY THE ASSESSEE AND UPHELD ESTIMATION OF COMMISSION @ 1% ON TOTAL SALES, HOWEVER THE APPEAL FILED BY THE REVENUE ON THE SAME ISSUE HAS NOT BEEN TAKEN INTO A CCOUNT, WHILE DISPOSING OF APPEAL OF THE ASSESSEE. THEREAFTER, TH E REVENUE AS WELL ITA NO.3865/MUM/2016 ACROMATIC TRADING PVT.LTD. 3 AS, THE ASSESSEE HAVE MOVED MISCELLANEOUS APPLICATI ON AGAINST ORDER OF THE TRIBUNAL IN ITA NO. 3927/MUM/2016 AND SUCH MISCELLANEOUS APPLICATION FILED BY THE PARTIES HAS BEEN DISMISSED BY THE TRIBUNAL VIDE ITS ORDER DATED 10/05/2019. 4. THE LD. AR FOR THE ASSESSEE, AT THE TIME OF HEAR ING, SUBMITTED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS CO VERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE, WHERE THE TRIBUNAL UPHELD ESTIMATION OF COMMISSION INCOME @1% ON TOTAL SALES, FURTHER, THE REVENUE HAS CHALLENGED FINDINGS OF LD.CIT(A) ON SAME ESTIMATION OF INCOME. SINCE, THE TRIBUNAL HAS ALREADY UPHELD FINDINGS OF LD.CIT(A), APPEAL FILED BY THE REVENUE BECOMES INFRUCTUOUS. THE LD. DR ON THE OTHER HAND, FAIRLY A CCEPTED THAT THE TRIBUNAL HAS DISPOSED OF APPEAL FILED BY THE ASSESS EE AND UPHELD THE FINDINGS OF THE LD.CIT(A) IN ESTIMATION OF 1% C OMMISSION ON TOTAL SALES. HOWEVER, HE STRONGLY SUPPORTED ORDER OF THE AO. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. THE REVENUE HAS CHALLENGED, THE FINDINGS OF LD.CIT(A) I N ESTIMATION OF 1% COMMISSION ON TOTAL SALES DECLARED BY THE ASSESE E AS AGAINST AO ESTIMATION OF 5% COMMISSION ON TOTAL SALES. WE F IND THAT THE ITA NO.3865/MUM/2016 ACROMATIC TRADING PVT.LTD. 4 TRIBUNAL, WHILE DISPOSING APPEAL OF THE ASSESEE IN ITA NO. 3927/MUM/2016 HAD CONSIDERED THE ISSUE OF ESTIMATIO N OF COMMISSION ON TOTAL SALES AND AFTER CONSIDERING AR GUMENTS OF BOTH THE SIDES HELD THAT THE RATE OF COMMISSION ADOPTED BY THE LD.CIT(A) @1% ON TOTAL SALES IS QUIET FAIR AND REASONABLE KEE PING IN VIEW, THE NATURE OF ASSESEES BUSINESS. WE, FURTHER NOTED THA T ALTHOUGH THE REVENUE HAS CHALLENGED FINDINGS OF LD.CIT(A) IN EST IMATION OF 1% COMMISSION AS AGAINST 5% ADOPTED BY THE AO, SINCE T HE ISSUE HAS BEEN ALREADY DECIDED BY THE TRIBUNAL IN ASSESSEES APPEAL AND UPHELD, THE FINDINGS OF THE LD.CIT(A) IN ESTIMATION OF 1% COMMISSION ON TOTAL SALES, IT IS DIFFICULT FOR US TO TAKE A DI FFERENT VIEW FROM VIEW, WHICH HAS BEEN ALREADY TAKEN BY THE TRIBUNAL IN ASS ESEES APPEAL. HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF LD .CIT(A) IN ESTIMATION OF 1% COMMISSION ON TOTAL SALES AND REJE CT APPEAL FILED BY THE REVENUE. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23/08/2 019 SD/- (AMARJIT SINGH) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 23/08/2019 THIRUMALESH SR.PS ITA NO.3865/MUM/2016 ACROMATIC TRADING PVT.LTD. 5 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//