The ACIT Circle-4(1), Vadodara V. Shri Touquire Azad Siddique, Vadodara

ITA 392/AHD/2020

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which had deleted the addition of Rs. 3,60,58,266 on account of unaccounted commission from the assessee's income. The addition was initially made by the Assessing Officer (AO) based on materials found and seized during a search at Ravikiran Group, which suggested that unaccounted commissions were paid to the assessee, Shri Touquire Azad Siddique, who was the General Manager at Sub-Chemie Pvt Ltd. The CIT(A) had previously ruled in favor of the assessee in a similar case for a different assessment year, which was upheld by the ITAT Ahmedabad. The Tribunal in this case followed the same reasoning and precedent, dismissing the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134532 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-01-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 29-06-2020
• Other Referred Cases: Cognizance for Extension of Limitation
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences; Condonation of delay
• Section: 143(3)

Judgement Text

आयकर अपीलीय अिधकरण, अहमदाबाद ᭠यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’ C” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER And SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER आयकर अपील सं./ITA No.392/AHD/2020 िनधाᭅरण वषᭅ/Asstt. Year: 2010-2011 The A.C.I.T, Circle-4(1), Vadodara. Vs. Shri Touquire Azad Siddique, B-17, Baseara Duplex, Tandalja Road, Vodadara. PAN: AEPPS0089G (Applicant) (Respondent) Revenue by : Shri A.P. Singh, CIT..D.R Assessee by : Shri Mukund Bakshi, A.R सुनवाई कᳱ तारीख/Date of Hearing : 19/01/2023 घोषणा कᳱ तारीख /Date of Pronouncement: 10/02/2023 आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-4, Vadodara dated 25/02/2020 arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2010-2011. ITA no.392/AHD/2020 A.Y. 2010-11 2 2. The Revenue has raised the following grounds of appeal: 1 On the facts and in the circumstances of the case, the learned CIT(A) erred in deleting the addition on account of unaccounted commission of Rs. 3,60,58,266/- by annulling the assessment by disregarding the facts mentioned by the Assessing Officer in the assessment order, that the addition was made after proper analysis and verification of materials found and seized along with statement recorded u/s ]32(4) of the Income Tax Act. It is evident from statements recorded that Shri Rameshbhai and Shri Ashokbhai of Ravikiran Group have been paying unaccounted commission ranging from 6% to 10% to Sud Chemie India Pvt td and it was given to Shri Laljibhai and Shri Siddique and certain credit entries were found in the bank statement bearing account No SB 02170100001782 with the Bank of Baroda which was not substantiated with supporting evidences. 2. The appellant craves leave to add to, amend or alter the above grounds as may be deemed necessary. 3. The Ld. DR at the outset brought to our notice that there is a delay in filing the appeal of the assessee for 59 days which is falling during the covid-19 period, therefore, the same should be condoned. On the other hand, the Ld. AR did not raise any objection on the condonation of delay in filing the appeal by the Revenue. Accordingly, we condone the delay in filing the appeal by the Revenue in pursuance to the judgment of Hon’ble SC in the case of Cognizance for Extension of Limitation, reported in 125 taxmann.com 151 and proceed to adjudicate the issue on merit. 4. In the present case the assessee is an individual and working as the General Manager in Sub-Chemie Pvt Ltd. The Sub Chemie India Pvt. Ltd. assigned certain job work to Ravikiran Group. A search was conducted at the premises of Ravikiran Group where some documents relating to the correspondence were seized. As per the correspondence between the two directors of Ravikiran Group i.e. Shri Ramesh Shah and Shri Ashkaran Shah, it was inferred by the AO that the company is paying commission to the assessee for the job work assigned by Sun-Chemie Pvt. Ltd which represents unaccounted of the assessee. Thereafter, the AO has Calculated the total amount of job work i.e. 72,11,65,312 and estimated commission of @ 10% of Rs. 7,21,16,532 only. The AO further assumed the share of the assessee at 50% of the total commission calculated i.e. 3,60,58,266 and added to the income of the assessee. ITA no.392/AHD/2020 A.Y. 2010-11 3 5. The aggrieved assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) has deleted the addition made by the AO by observing as under: 3.1 Ground No, 2 to 4 pertains to addition of Rs.3,60,58,266/- on account of , unaccounted commission. This issue has been discussed by the Assessing Officer in Paras 3.1 to 3.5.8, at Page 4 to 15, of the assessment order. Similar addition in the case of the appellant has been decided in the favour of the appellant by the CIT (A)-4, Vadodara, vide order no. CAB/4- 25/15-16 dated 25.01.2017 for A.Y. 2007-08. Further department has filed appeal before the Hon'ble ITAT, Ahmedabad against the order of CIT (A)-4, Vadodara order no. CAB/4- 25/15-16 dated 25.01.2017 for (he A.Y. 2007-08, The Hon'ble ITAT, Ahmedabad Bench 'A', vide ITA No.ll87/Ahd/2017 dated 07.03.2019, has decided the issue in the favour of the appellant. In para 5 of the said order, it has been held that "We have heard the rival contentions and perused the material on record carefully. The third and fourth grounds of appeal of the revenue are pertained to deleting of addition of commission of Rs, 73,30,650/-. This addition was made on the basis of documents found and seized during the course of search proceeding in the case of Ravikiran Group. As per the information gathered from the documents, the above group was paying unaccounted commission from 6% to 10 % of the total job work of Sub-Chemie Pvt Ltd., Vadodara in which the assessee was working as General Manager. During the financial year 2006-07, the total job work done by the Sub-Chemie Pvt Ltd. was to the amount of Rs.l4,66,1990/-and the Assessing Officer had made addition @5% of job work i.e. Rs,73,30,650/-. After perusal of material on record, it is observed that there exited certain correspondences internally between Shri Ramesh Shah and Shri Ashok Shah persons controlling the affair of the Ravikiran Group. The assessee has objected that Shri Ramesh Shah and Shri Nitin Shah have received the money themselves and wrongly declared to other director that such amount was paid to the assessee and they have concealed the real facts from the directors. The assessee has denied of receiving of any such commission merely based on internal correspondences between Shri Ramesh Shah and Shri Ashok Shah of Ravikiran Group. In the light of the above facts and circumstances, we find that the Assessing Officer had never allowed the assessee to cross examine Shri Rameshbhai or Shri Ashokbhai to establish the veracity of commission payment in spite of request made to the Assessing Officer. It is undisputed facts that the Assessing Officer has not provided copies of statements of the aforesaid persons to the assessee. The Assessing Officer has not carried out any investigation to substantiate that the aforesaid commission was actually paid to the assessee. In the light of the aforesaid facts and detailed findings as elaborated in the decision of the Ld. CIT(A), we do not find any merit in this ground of appeal of the revenue, therefore, the appeal of the revenue is dismissed. 9.2 Since, the facts are identical in the AY under consideration, 1 respectfully follow the decision of Hon'ble ITAT Ahmedabad in appellant's own case for the AY 2007-08. Assessing Officer is directed to delete the addition of Rs.3,60,58,266/- made on account of unaccounted commission. Thus, appellant succeeds on Ground No 2 to 4. 6. Being aggrieved by the order of Ld. CIT(A) the Revenue is in appeal before us. 7. The Ld. DR has relied on the order of AO while the Ld. AR has vehemently supported the order of the Ld. CIT(A). ITA no.392/AHD/2020 A.Y. 2010-11 4 8. We have heard the rival contentions of both the parties and perused the materials available on records. It was observed that the issue before us is totally identical in the assessee’s own case for the AY 2007-08 wherein the deletion was made by Ld. CIT(A) on the basis of similar facts and materials which was also sustained by the Hon’ble ITAT Ahmedabad Bench “A” vide ITA No. 1187/Ahd/2017 dated 07.03.2019. As the facts are identical in the AY under consideration, we respectfully following the decision of the Hon’ble ITAT Ahmedabad in appellant’s own case for the AY 2007-08 as reproduced above, upheld the decision of the Ld. CIT(A). Thus, the ground of appeal of the Revenue is dismissed. 10. In the result, the appeal filed by the revenue is dismissed. Order pronounced in the Court on 10/02/2023 at Ahmedabad. Sd/- Sd/- (T.R. SENTHIL KUMAR) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 10/02/2023 Manish