M/s M.V. Marketing Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4267/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 9799 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2001-2002
• Appeal Filed On: 05-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SAHOTA
• Keywords: Opportunity of being heard; Accommodation entries
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 4267/DEL/2009 ASSESSMENT YEAR : 20001-02 M/S. M.V. MARKETING PVT. LTD. WZ-134, PLOT NO. 170, VISHNU GARDEN, NEW DELHI-110018. VS. INCOME TAX OFFICER, WARD 6 (1), NEW DELHI. (APPELLANT) (RESPONDENT) ITA NO. 4275/DEL/2009 ASSESSMENT YEAR : 20001-02 INCOME TAX OFFICER, WARD 6 (1), NEW DELHI. VS. M/S. M.V. MARKETING PVT. LTD. A-10/204, SAI BHAWAN, RANJIT NAGAR, COMMERCIAL COMPLEX, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE (NOTICE RETUR NED BACK UNSERVED) DEPARTMENT BY : SHRI G.S. SAHOTA, SR. D.R. O R D E R PER: C.L. SETHI, J.M. THESE ARE CROSS APPEALS, FILED BY THE ASSESSEE AS WELL BY THE REVENUE, AGAINST THE ORDER DATED 28.08.2009 PASSED BY THE LD . CIT(A) IN THE MATTER OF AN ASSESSMENT MADE U/S 147/143(3) OF THE INCOME TAX AC T, 1961 PERTAINING TO THE ASSESSMENT YEAR 2001-02. 2 2. THE GROUNDS RAISED BY THE ASSESSEE AS WELL AS BY THE REVENUE ARE INTER- CONNECTED BEING RELATED TO THE ISSUE REGARDING THE RATE OF COMMISSION EARNED ON ACCOMMODATION ENTRIES PROVIDED BY THE ASSESSEE. 3. IN THE ASSESSMENT MADE BY THE A.O. U/S 143(3)/ 1 47 OF THE ACT, THE A.O. HAS STATED THAT DURING THE COURSE OF ENQUIRY CONDUC TED BY THE INVESTIGATION WING OF THE DEPARTMENT, IT WAS FOUND THAT MOST OF THE EN TRY OPERATORS WERE CHARGED COMMISSION AT THE RATE OF 2% FOR PROVIDING ACCOMMOD ATION ENTRIES. THE A.O. FURTHER STATED THAT THE ASSESSEE MIGHT HAVE INCURRE D SOME EXPENSES FOR RUNNING AND MANAGING THIS SYSTEM OF PROVIDING ACCOMMODATION ENTRY. THE A.O. ESTIMATED THE EXPENSES AT 25% OF THE COMMISSION REC EIVED. THEREFORE, NET COMMISSION WAS WORKED OUT AT 1.5% OF AMOUNT OF ACCO MMODATION ENTRY PROVIDED BY THE ASSESSEE. THE A.O. THEN WORKED OUT THE TOTAL AMOUNT USED IN THE ACTIVITIES OF PROVIDING ACCOMMODATION ENTRIES AT RS . 12,27,44,178/-. THE COMMISSION @1.5% OF RS. 12,27,44,178/- WAS WORKED OUT AT RS. 18,41,162/- WHICH WAS ADDED TO THE ASSESSEES TOTAL AS INCOME F ROM UNDISCLOSED SOURCES. 4. ON AN APPEAL, THE LD. CIT(A), AFTER CONSIDERING THE ASSESSEES SUBMISSION AND THE FACTS OF THE CASE, DIRECTED THE A.O. TO TRE AT THE INCOME BY WAY OF COMMISSION AT THE RATE OF 1%. WHILE TAKING THE NET COMMISSION AT 1% OF THE ACCOMMODATION ENTRY, THE LD. CIT(A) HAS STATED THAT IN THE ASSESSEES CASE, IN THE IMMEDIATE PRECEDING ASSESSMENT YEAR 2000-01, THE LD . CIT(A) HAS REDUCED THE RATE OF COMMISSION FROM 1.5% TO 1%. 3 5. HENCE, BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US. 6. THE REVENUE HAS TAKEN A GROUND THAT THE LD. CIT( A) HAS ERRED IN REDUCING THE COMMISSION FROM 1.5% TO 1%, WHILE, ON THE OTHER HAND, THE ASSESSEE HAS TAKEN A GROUND THAT THE LD. CIT(A) HAS ERRED IN SUS TAINING THE ADDITION TO THE EXTENT OF 1% OF COMMISSION WHICH SHOULD BE REDUCED BY CONSIDERING THE RATE APPLIED IN OTHER CASES OF LIKE NATURE. 7. WHEN THESE APPEALS WERE CALLED ON FOR HEARING ON 05.01.2010, NONE FOR THE ASSESSEE WAS PRESENT. NOTICE SENT TO THE ASSESSEE HAS RETURNED UNSERVED WITH THE REMARK LEFT. THE ASSESSEE HAS NOT INTIMATED THE REGISTRY ABOUT HIS PRESENT WHEREABOUTS. WE, THEREFORE, PROCEEDED TO DISPOSE O FF THESE APPEALS AFTER HEARING THE LD. D.R. 8. FROM THE ORDER OF LD. CIT(A), IT IS SEEN THAT I DENTICAL ISSUE IN THE ASSESSEES CASE WAS A SUBJECT MATTER OF CONSIDERATI ON BY THE LD. CIT(A) IN THE ASSESSMENT YEAR 2000-01, WHERE THE LD. CIT(A) REDUC ED THE INCOME BY WAY OF COMMISSION FROM 1.5% TO 1%. NO INFORMATION IS AVAI LABLE ABOUT THE FINAL OUTCOME OF THIS ISSUE IN THE ASSESSMENT YEAR 2000-0 1. THE NATURE OF THE ACTIVITY CARRIED OUT BY THE ASSESSEE IN THE PRESENT ASSESSME NT YEAR IS UNDOUBTEDLY IDENTICAL TO THAT OF IN THE ASSESSMENT YEAR 2000-01 . SINCE FINAL DECISION IN THE ASSESSMENT YEAR 2000-01 IS NOT AVAILABLE BEFORE US NOR THE LD. D.R. HAS BEEN ABLE TO POINT OUT WHETHER THE DECISION OF THE LD. CIT(A) IN THE ASSESSMENT YEAR 2000- 01 HAS BEEN MODIFIED OR SET ASIDE OR UPHELD BY HIGH ER APPELLATE AUTHORITY, WE ARE 4 INCLINED TO RESTORE THIS ISSUE BACK TO THE FILE OF THE A.O. FOR DECIDING THE SAME IN THE LIGHT OF THE ULTIMATE POSITION ACCEPTED IN THE ASSESSMENT YEAR 2000-01. THE RATE OF COMMISSION ULTIMATELY HELD TO BE APPLICABLE IN THE ASSESSEES CASE IN THE ASSESSMENT YEAR 2000-01 SHALL BE APPLIED TO THE PRE SENT ASSESSMENT YEAR ALSO. THE A.O. SHALL THEN MODIFY THE ASSESSMENT ORDER ACC ORDINGLY. THE A.O. SHALL PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE AS WELL AS BY THE REVENUE ARE TREATED TO BE ALLOWED FOR A STATISTICAL PURPOSE. 10. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 8 TH JANUARY, 2010. (K.G. BANSAL) ACCOUNTANT MEMBER (C.L. SETHI) JUDICIAL MEMBER DATED: 8 TH JANUARY, 2010. MAMTA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. BY ORDER DEPUTY REGISTRAR