Pushparaj Corporation Arihant, Ahmedabad V. ITO, Ward-5(2)(5), Ahmedabad

ITA 44/AHD/2019

AI Insights

The case involves Pushparaj Corporation Arihant, a property developer, appealing against the disallowance of commission expenses by the Income Tax Officer, which was later upheld by the CIT(A). The disallowance of Rs. 5,29,398 was initially made due to the absence of bills for certain commission payments. The Tribunal, upon reviewing additional evidence submitted by the assessee, including bills for Rs. 5,00,000 and TDS certificates, found that the expenses were indeed incurred for business purposes. The Tribunal criticized the CIT(A) for ignoring these submissions and allowed the appeal, thereby reversing the earlier decisions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299936 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-05-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 09-01-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 143(2); 44AB; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . N o . 4 4 /A hd / 2 0 19 ( A s se ss m e nt Y e a r : 20 13- 14 ) Pu s h p ar aj C o r p o r a t io n A r ih a n t 50 1 - 5 02 , Ag ar w a l C o m p le x, Nr . S wa st ik C ro ss R o a d, C . G. R o a d , N a v r a n gp u r a , Ah me da bad - 3 80 00 9 V s . I nc o me Ta x O f f ic er War d - 5 ( 2) ( 5 ) , A h me da ba d [ P AN N o. A A NF P 1 22 8L ] (Appellant) .. (Respondent) Appellant by : Shri Divyang Shah & Shri Maulik Kansara, A.Rs. Respondent by : Shri Sanjeev Bhagat, Sr. D.R. D a t e of H ea r i ng 16.05.2023 D a t e of P r o no u n ce me nt 24.05.2023 O R D E R The appeal filed by the assessee is against the order passed by the Ld. Commissioner of Income Tax (Appeals)-5, (in short “CIT(A)”), Ahmedabad on 15.11.2018 for A.Y. 2013-14. 2. The grounds of appeal raised by the assessee are as under: “1. Whether, on facts and in circumstances of the case and in law, Ld. Assessing officer has erred in disallowing the commission expenditure of Rs.529,398/-? Further, appellant craves leave to add, amend, alter or withdraw all or any ground of appeal.” 3. The assessee is deriving income as builder – property developer of all types of building. The assessee filed return of income for A.Y. 2013-14 on 27.09.2013 declaring total income at Rs. 41,495/-. The case was selected for scrutiny and notice under Section 143(2) of the Act was issued on 04.09.2014 which was served upon the assessee. The Authorized Representative of the assessee filed the details, information and clarifications before the Assessing ITA No. 44/Ahd/2019 Pushparaj Corporation Arihant vs. ITO Asst.Year–2013-14 - 2 - Officer. The assessee maintains the books of accounts on mercantile system which was audited as per provision of Section 44AB of the Act. Necessary details and confirmations were obtained and verified by the Assessing Officer. The Assessing Officer observed that the assessee has debited Rs. 24,54,398/- as brokerage expenses and verification of TDS transaction summary, confirmation on account of brokers the Assessing Officer observed that with respect to commission paid to four parties they have not submitted bills / no details are mentioned relating to commission totaling to Rs. 5,29,398/-. Thus, the Assessing Officer made disallowance of Rs. 5,29,398/- towards brokerage expenses. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee. 5. The Ld. A.R. submitted that in respect of Meenaben Sanjaybhai Barot and Sanjay M Barot the assessee has filed additional evidences thereby submitting the bills for commission expenditure towards Rs. 5,00,000/-. As relates to other two parties the commission expenditure though the bills were not there but the ledger details about the same and the TDS transactions summary was available before the Assessing Officer. Thus, the Ld. A.R. submitted that the CIT(A) has ignored the transactions and the brokerage given to these parties for the business purposes and the Assessing Officer as well as the CIT(A) should have allowed the commission expenditure of Rs. 5,29,398/-. 6. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). The Ld. D.R. further submitted that whether actual transaction took place or not has not been established by the assessee before the Assessing Officer as well as before the CIT(A) and the figures were not matching and ITA No. 44/Ahd/2019 Pushparaj Corporation Arihant vs. ITO Asst.Year–2013-14 - 3 - therefore, only to reduce the profit the assessee is claiming commission expenditure. 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that in respect of commission expenses for which bills were duly submitted regarding Meenaben Sanjaybhia Barot and Sanjay M Barot HUF the assessee has given all the details including the confirmation of the commission expenses from these two parties totaling Rs. 5,00,000/-. This additional evidences was totally ignored by the CIT(A). Therefore, the commission expenses to this amount of Rs. 5,00,000/- should have been allowed by the Assessing Officer as well as CIT(A). As relates to bills for commission expenses of Rs. 29,398/- though the assessee has not shown the bills but the same has been mentioned in ledger account and TDS certificate were also enclosed which confirms that the assessee has incurred commission expenses with these parties as well and the details of the billing were also given by the assessee for which the commission expenditure has been incurred. Therefore, the disallowance to the extent of Rs. 5,29,398/- made by the Assessing Officer is not justifiable. Hence, the appeal of the assessee is allowed. 8. In result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 24/05/2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 24/05/2023 TANMAY, Sr. PS TRUE COPY ITA No. 44/Ahd/2019 Pushparaj Corporation Arihant vs. ITO Asst.Year–2013-14 - 4 - आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 17.05.2023 2. Date on which the type draft is placed before the Dictating Member 17.05.2023 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S .05.2023 5. Date on which the fair order is placed before the Dictating Member for pronouncement .05.2023 6. Date on which the fair order comes back to the Sr.P.S./P.S 25.05.2023 7. Date on which the file goes to the Bench Clerk 25.05.2023 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................