The Income-tax Officer, Jammu V. Sh. Ayodhya Kumar, Jammu

ITA 457/ASR/2015

• Counselvise Citation: 45720914 RSA 2015
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA
• Assessee Lawyers: MOHIT KHANNA
• Keywords: Business income; Source of fund; Relationship of principal and agent; Reason to believe; Reassessment proceedings
• Section: 201(1); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (JAMMU CAMP, JAMMU) BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S.KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NOS.450 457, 458 & 459(ASR)/2015 ASSESSMENT YEARS: 2008-09, 2009-10, 2010-11 & 2 011-12 INCOME TAX OFFICER, WARD-2(1), JAMMU. VS. SH. AYODHYA KUMAR PROP. M/S SAHIL COMMUNICATION NEAR SBI, TALAB TILLO, JAMMU. PAN: ABMPK9159P (APPELLANT) (RESPONDENT) APPELLANT BY: SH. R.K. SHARDA (DR.) RESPONDENT BY: SH. JOGINDER SINGH & SH. MOHIT KHANNA (CA.) DATE OF HEARING: 04.12.2015 DATE OF PRONOUNCEM ENT: 29.12.2015 ORDER PER T.S.KAPOOR (A.M): THESE ARE FOUR APPEALS FILED BY THE REVENUE AGAI NST THE SEPARATE ORDERS OF LEARNED CIT(A), ALL DATED 10.06.2015. SIMILAR IS SUES ARE INVOLVED IN THESE APPEALS AND THESE WERE HEARD TOGETHER, THEREFORE, F OR THE SAKE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. FOR THE SAKE OF CONVENIENCE THE GROUNDS OF APPEAL TAKEN BY REVENUE IN ITA NO. 4 50(ASR)/2015 FOR ASST. YEAR 2008-09 ARE REPRODUCED BELOW. (I) WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ALLOWI NG RELIEF AN ACCOUNT OF ADDITION MADE IN RESPECT OF VIOLATION OF PROVISIONS OF SECTI ON 40(A)(IA) OF THE INCOME TAX ACT, 1961 AS WHILE TRANSFERRING THE COMMISSION AMOU NT TO THE AGENTS/RETAILERS, 2. ITA NO.45 0, 457, 458 & 459(ASR)/2015 ASST. YEARS 20 08-09 TO 2011-12 THE ASSESSEE WAS REQUIRED TO DEDUCT INCOME TAX AT S OURCE UNDER THE PROVISIONS OF SECTION 194H OF THE INCOME TAX ACT,1961 WHICH HE HA S FAILED TO DEDUCT. (II) WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ALLOWI NG RELIEF ON ACCOUNT OF ADDITION MADE IN RESPECT OF SET OFF LOSS AGAINST THE CURRENT YEAR INCOME AS THE ASSESSEE HAD FAILED TO FURNISH ANY INFORMATION BEFORE THE AS SESSING OFFICER TO JUSTIFY ITS CLAIM. (III) WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ALLOW ING RELIEF ON ACCOUNT OF ADDITION MADE UNDER THE HEADS MISCELLANEOUS EXPENSES, STAFF WELFARE, TELEPHONE CHARGES, VEHICLE RUNNING AND MAINTENANCE IN RESPECT OF ITS P ROPRIETORSHIP CONCERN NAMELY M/S SAHIL ENTERPRISES KEEPING IN VIEW THE FACT THAT THE ASSESSEE HAD FAILED TO PRODUCE ANY BOOKS OF ACCOUNT/VOUCHERS BEFORE THE AS SESSING OFFICER TO JUSTIFY ITS CLAIM. (IV) WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ALLOWI NG RELIEF ON ACCOUNT OF ADDITION MADE UNDER THE HEADS ENTERTAINMENT, FESTIVAL EXPENS ES, MISCELLANEOUS EXPENSES, STAFF WELFARE, CONVEYANCE AND TELEPHONE EXPENSES IN RESPECT OF ITS ANOTHER PROPRIETORSHIP CONCERN NAMELY M/S SAHIL TELE COMMUN ICATION KEEPING IN VIEW THE FACT THAT THE ASSESSEE HAD FAILED TO PRODUCE ANY BO OKS OF ACCOUNT/VOUCHERS BEFORE THE ASSESSING OFFICER TO JUSTIFY ITS CLAIM. 2. THE BRIEF FACTS AS NOTED IN THE ASSESSMENT ORD ER ARE THAT THESE CASES WERE REOPENED U/S 148 AND ASSESSING OFFICER HAD PASSED O RDER U/S 144/148 OF THE ACT THE ASSESSEE DID NOT COMPLY WITH THE NOTICES IS SUED BY ASSESSING OFFICER, THEREFORE, THE ASSESSING OFFICER PASSED ORDER U/S 1 44 OF THE ACT. THE ASSESSING OFFICER MADE SIMILAR ADDITIONS IN ALL THE YEARS. FO R THE SAKE OF CONVENIENCE THE ADDITIONS MADE BY ASSESSING OFFICER IN ASST. YEAR 2 008-09 ARE REPRODUCED BELOW. 4.3 THUS FROM THE ABOVE FACTS, IT IS CLEAR T HAT THE ASSESSEE HAD FAILED TO DEDUCT INCOME TAX AT SOURCE ON THE PAYMENT OF COMMISSION MADE U/S 194H A MOUNTING TO RS. 11,94,704/- AND AS SUCH, THE SAID AMOUNT WAS REQUIRED TO BE ADDED TO HIS INC OME IN THE LIGHT OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961. THEREFORE, T HE SAID AMOUNT OF RS.L 1,94,704/- IS CHARGED TO 3. ITA NO.45 0, 457, 458 & 459(ASR)/2015 ASST. YEARS 20 08-09 TO 2011-12 INCOME TAX UNDER THE PROVISIONS OF SECTION 40(A)(IA ) OF THE INCOME TAX ACT, 1961. SINCE THE ASSESSEE HAS FAILED TO FURNISH TRUE PARTICULARS OF HIS INCOME, THEREFORE, THE PENALTY PROCEEDINGS U/S 271 (L)(C) ARE ALSO BEING INITIATED. (5) AS PER THE RETURN OF INCOME UPLOADED BY THE ASSESSEE, IT IS OBSERVED THAT VIDE COLUMN NO.7, THE ASSESSEE HAS SET OFF LOSS OF RS.L,36,188/- AGAI NST THE CURRENT YEARS INCOME. IN THE ABSENCE OF ANY INFORMATION AS TO WHETHER THE SAID AMOUNT QUALI FIES FOR SET- OFF AS PER THE RELEVANT PROVISIONS OF THE ACT, THE SAME IS NOT ALLOWED. THIS WOULD RES ULT IN DISALLOWANCE OF RS.L,36,188/- UNDER THIS HEAD. (6) THE ASSESSEE HAS CLAIMED EXPENSES UNDER THE HEAD MISC. EXPENSES, STAFF WELFARE, TELEPHONE CHARGES, VEHICLE RUNNING AND MAINTENANCE IN RESPECT OF ITS PROPRIETORSHIP CONCERN NAMELY M/S SAHIL ENTERPRISES AT RS.9,825/-, RS.6,812/-, RS.3,8 66/- AND RS.72,524/- RESPECTIVELY. IN THE ABSENCE OF ANY INFORMATION, THE EXPENSES DEBITED COULD NOT BE VERI FIED AS NEITHER THE BOOKS OF ACCOUNT NOR ANY DETAILS HAVE BEEN FILED BY THE ASSESSEE. AS THE EXPENSES OF PERSONAL AND INADMISSIBLE HAVING BEEN DEBITED UNDER THESE HEADS CANNOT BE COMPLETELY RULED OUT, THEREFORE, TO COVER UP SUCH INADMISSIBLE/ UN-VOUCHED EXPENSES, 20% OF THESE EXP ENSES ARE DISALLOWED. THIS WOULD RESULT IN DISALLOWANCE OF RS.L 8,605/- UNDER THIS HEAD. (7) THE ASSESSEE HAS ALSO CLAIMED EXPENSES UNDER T HE HEAD ENTERTAINMENT, FESTIVAL, MISC. EXPENSES, STAFF WELFARE, CONVEYANCE AND TELEPHONE CHARGES, IN RESPECT OF ITS ANOTHER PROPRIETORSHIP CONCERN NAMEL Y M/S SHAIL TELE COMMUNICATION AT RS. 14,275/-, RS. 18,000/- RS. 7,4 36/-, RS. 12,745/-, RS. 12,160/- AND RS. 12, 148/- RESPECTIVELY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO PRODUCE THE BOO KS OF ACCOUNT, DETAILS EXPENSES AND VOUCHERS IN SUPPORT OF THESE EXPENSES DEBITED T O P& L ACCOUNT. AS THE EXPENSES OF PERSONAL AND INADMISSIBLE NATURE HAVING BEEN DEBITED UNDER THESE HEADS CANNOT BE COMPLETELY RULED OUT, THEREFORE, TO COVER UP SUCH INADMISSIBLE AND UN-VOUCHED EXPENSES, 20% OF THESE EXPENSES ARE DISALLOWED. THIS WOULD RESULT IN DISALLOWANCE OF RS.15,353/- UNDER THIS HE AD. 3. AGGRIEVED WITH THE ORDERS THE ASSESSEE FILED APPEAL BEFORE LEARNED CIT(A) AND LEARNED CIT(A) GAVE RELIEF TO THE ASSESSEE BY R ECORDING SIMILAR FINDINGS IN 4. ITA NO.45 0, 457, 458 & 459(ASR)/2015 ASST. YEARS 20 08-09 TO 2011-12 RESPECT OF ALL YEARS. FOR THE SAKE OF CONVENIENCE T HE FINDINGS RECORDED BY LEARNED CIT(A) IN ASST. YEAR 2008-09 ARE REPRODUCED BELOW. 4.1 GROUND OF APPEAL NO. 1 RELATES TO THE ADDITION OF RS.11,94,704/- U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF NON DEDUCTION OF TDS ON CO MMISSION FORWARDED TO THE RETAILERS. THE ISSUE IN RESPECT OF TDS ON MARGIN OF THE RETAILER HAS ALREADY BEEN DECIDED BY ME IN THE APPEAL OF THE APPELLANT AGAINS T THE ORDER U/S 201(1) & 201(1A) OF THE ACT VIDE ORDER DATED 10/06/2015. IT WAS FOUND THAT THE MARGIN OF THE RETAILER CANNOT BE TERMED AS COMMISSION AND AS SUCH THERE WAS NO LIABILITY ON THE APPLICANT TO DEDUCT THE TDS. AS IT IS HELD THAT THE APPELLANT WAS NOT REQUIRED TO DEDUCT TDS UNDER THE PROVISIONS OF SECTION 194H OF THE ACT, THE ADDITION MADE U/S 40(A)(IA) OF THE ACT ARE NOT SUSTAINABLE AND AC CORDINGLY DELETED. A RELIEF OF RS.11,94,704/- WAS ALLOWED TO THE APPELLANT. 4.2 GROUND OF APPEAL NO.1 ALSO RELATES TO NON ALLOW ANCE OF SET OFF OF LOSSES AMOUNTING TO RS,1,36,188/- AND ADHOC DISALLOWANCES OF RS.18,605/- AND 15,353/- OUT OF VARIOUS EXPENSES. THE APPELLANT HAS ARGUED THAT SET OFF OF LOSSES A MOUNTING TO RS 1,36,188 REPRESENTS THE INTEREST ON LOAN TAKEN FOR CONSTRUCTION OF HOUSE PROPERTY AND WAS SHOWN AS NEGATIVE INCOME FROM SELF OCCUPIED PROPERTY WHICH IS ALLOWABLE AGAINST BUSINESS INCOME. IT WAS ARGUED ON BEHALF OF APPELLANT THAT THE ADHOC DISALLOWANCES OUT OF EXPENSES WERE MADE BY THE AO MERELY ON THE BASIS OF ASSUMPTIONS WITHOUT SPECIFYING ANY EXPENDITURE WHICH IS NOT INCURRED FOR THE PURPOSE O F BUSINESS. THE A/R ALTERNATIVELY ARGUED THAT SINCE THE ADDITIONS ON WHICH THE CASE WAS REOPENED WERE DELETED, ADDITIONS ON OTHER COUNTS WHICH WERE NOT PRESENT IN THE REASONS RECORDED FOR NOTICE U/S 148 COULD NOT BE SUSTAINED. THE A/R ARGUED THAT IF ADDITIONS MADE BY THE AO IN RESP ECT OF ESCAPED INCOME RECORDED IN THE REASONS OF REOPENING IS NOT SUSTAINED, THE OTHER AD DITIONS MADE IN RESPECT OF OTHER ESCAPED INCOME WHICH HAS NO NEXUS WITH THE REASONS RECORDED BY THE AO COULD ALSO NOT BE SUSTAINED. IT IS OBSERVED THAT THE PROCEEDINGS WERE INITIATED U/S 14 8 OF THE ACT ON THE REASONS RECORDED BY THE AO IN RESPECT OF THE OMISSION TO MAKE ADDITION U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF NON 5. ITA NO.45 0, 457, 458 & 459(ASR)/2015 ASST. YEARS 20 08-09 TO 2011-12 DEDUCTION OF TDS. IT HAS BEEN DECIDED THAT THE APPE LLANT WAS NOT REQUIRED TO DEDUCT TDS AND AS SUCH THERE IS NO DEFAULT. RELIANCE IS PLACED ON JUD ICIAL DECISIONS VIZ. RANBAXY LABORATORIES LTD VS CIT (2011) 336 ITR 136 (DEL), CIT VS JET AIRWAYS (I ) LTD (2011) 331 ITR 236 (BOM), CIT V DR DEVENDRA GUPTA (2011) 336 ITR 59 (RAJ), CIT V SH RA M SINGH (2008) 306 ITR 343 (RAJ), IT WAS HELD THAT WHERE THE NOTICE U/S 148 WAS SERVED FOR OMISSI ON OF CERTAIN ITEMS, BUT THEY WERE EXPLAINED SATISFACTORILY AND NO ADDITIONS COULD BE MADE ON TH AT GROUND. JURISDICTION TO PROCEED FURTHER WOULD NO LONGER SURVIVE, SCTAS TO MAKE OTHER ADDITI ONS OR TO REDUCE OTHER DEDUCTION. IN THE CASE OF CIT V DR DEVENDRA GUPTA (2011) 336 ITR 59 (RAJ), THE HON'BLE COURT HELD THAT IN CASE INCOME ALLEGED TO HAVE ESCAPED ASSESSMENT IN R EASONS RECORDED NOT HAVING BEEN ACTUALLY FOUND TO HAVE ESCAPED ASSESSMENT IN THE COURSE OF R EASSESSMENT PROCEEDINGS, AO HAS NO JURISDICTION TO ADD OTHER SOURCES OF INCOME FOUND TO HAVE ESCAPED ASSESSMENT . THE HON'BLE COURT RELIED ON THE JUDGMENTS OF CIT VS. SHRI RAM S INGH (2008) 8 DTR (RAJ) 118 : (2008) 217 CTR (RAJ) 345 AND DR. DEVENDRA GUPTA VS. ITO (2005) 97 TTJ (JD) 561: (2005) 97 ITD 581 (JD) AFFIRMED. IN THE CASE OF CIT VS JET AIRWAYS (I) LTD (2011) 331 ITR 236 (BOM), THE HON'BLE COUR T HELD THAT WHEN EXPLN. 3 TO S. 147 WAS INTRODUCED, PARLIAMENT STEPPED IN TO CORRECT WHAT IT REGARDED AS AN INTERPRETATIONAL ERROR IN THE VIEW WHICH WAS TAK EN BY CERTAIN COURTS THAT THE AO HAS TO RESTRICT THE ASSESSMENT OR REASSESSMENT PROCEEDINGS ONLY TO THE ISSUES IN RESPECT OF WHICH REASONS WERE RECORDED FOR REOPENING THE ASSESSMENT. HOWEVER, EXPLN. 3 DOES NOT AND CANNOT OVERRIDE THE NECESSITY OF FULFILLING THE CONDITIONS SET OUT IN THE SUBSTANTIVE PART OF S. 147. AO HAS TO ASSESSEE OR REASSESS THE INCOME (SUCH INCOM E) WHICH ESCAPED ASSESSMENT AND WHICH WAS THE BASIS OF THE FORMATION OF BELIEF AND IF HE DOES SO, HE CAN ALSO ASSESS OR REASSESS ANY OTHER INCOME WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE DURING THE COURSE OF THE PROCEEDINGS. HOWEVER, IF AFTER ISSUING A NOT ICE UNDER S. 148, HE ACCEPTED THE CONTENTION OF THE ASSESSEE AND HOLDS THAT THE INCOME WHICH HE HAS INITIALLY FORMED A REASON TO BELIEVE HAD ESCAPED ASSESSMENT, HAS AS A MATTER OF FACT NOT ESCAPED ASSESSMENT, IT IS NOT OPEN TO HIM TO INDEPENDENTLY ASSESS SOME OTHER INCOME. IF HE INTEN DS TO DO SO, A FRESH NOTICE UNDER S. 148 WOULD BE NECESSARY, THE LEGALITY OF WHICH WOULD BE TESTED IN THE EVENT OF A CHALLENGE BY THE ASSESSEE. 6. ITA NO.45 0, 457, 458 & 459(ASR)/2015 ASST. YEARS 20 08-09 TO 2011-12 HON'BLE HIGH COURT OF DELHI IN THE CASE OF RANBAXY LABORATORIES LTD VS CIT (2011) 336 ITR 136 (DEL) HELD THAT AS PER EXPIN. 3 TO S. 147, AO MAY ASSESS OR REASSESS A NY INCOME WHICH HAS ESCAPED ASSESSMENT IF SUCH INCOME COMES TO HIS NOTI CE IN THE COURSE OF PROCEEDINGS UNDER THIS SECTION EVEN THOUGH THE SAID ISSUE DOES NOT FIND ME NTION IN THE REASONS RECORDED AND THE NOTICE ISSUED UNDER S. 148.HOWEVER, LEGISLATURE CANNOT BE PRESUMED TO HAVE INTENDED TO GIVE BLANKET POWERS TO THE AO THAT ON ASSUMING JURISDICTION UNDER S. 147, HE CAN KEEP ON MAKING ROVING ENQUIRY AND THEREBY INCLUDING DIFFERENT ITEMS OF INCOME NOT CONNECTED O R RELATED WITH THE REASONS TO BELIEVE ON THE BASIS OF WHICH HE ASSUMED JURISDICTION. HE WOULD BE REQUIRED TO ISSUE A FRESH NOTICE UNDER S. 148 FOR EVERY NEW ISSUE COMING BEFORE HIM DURING THE CO URSE OF ASSESSMENT OR REASSESSMENT PROCEEDINGS WHICH HE INTENDS TO TAKE INTO ACCOUNT. AO HAD JURISDICTION TO REASSESS INCOME OTHER THAN THE INCOME IN RESPECT OF WHICH PROCEEDINGS UND ER S. 147 WERE INITIATED BUT HE WAS NOT JUSTIFIED IN DOING SO WHEN THE VERY REASONS FOR INI TIATION OF THOSE PROCEEDINGS CEASED TO SURVIVE. IN THE CASE OF CIT V ATLAS CYCLE INDUSTRIES (1989) 180 ITR 319 (R & H), THE HON'BLE COURT HELD THAT THE AO DID NOT HAVE JURISDICTION TO PROCEED WITH T HE REASSESSMENT, ONCE HE FOUND THAT THE TWO GROUNDS MENTIONED IN THE NOTICE U/S 148 WER E INCORRECT OR NON EXISTENT. HON'BLE JURISDICTIONAL ITAT BENCH, AMRITSAR IN THE CASE OF R. KAKKAR GLASS & CROCKERY HOUSES VS DCIT (2007) 108 TTJ 1, HELD THAT ONCE REASSESSMENT PROCEEDINGS ARE INITIATED IN RESPECT OF CERTAIN INCOME THAT HAS ESCAPED ASSESSMENT, ANY OTHER INCOME WHICH HAS ESCAPED ASSESSMENT CAN ALSO BE ASSESSED, PROVIDED THE ISSUE FOR WHICH .THE ASSESSM ENT WAS REOPENED RESULTS IN ADDITION. THEREFORE, ON THE BASIS OF ABOVE FACTS AND LEGAL PO SITION, I AM OF THE OPINION THAT THE ADDITIONS MADE BY THE AO ARE NOT SUSTAINABLE. T HESE GROUNDS OF APPEAL ARE ALLOWED AND A RELIEF OF RS.170146/-. 4. AGGRIEVED WITH THE ORDER OF CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 5. AT THE OUTSET THE LEARNED DR SUBMITTED THAT TH E ASSESSEE DID NOT FILE ANY DETAILS WITH ASSESSING OFFICER, DURING THE ASSESSME NT PROCEEDINGS AND LEARNED CIT(A) HAS NOT CONSIDERED THE OBSERVATIONS OF ASSES SING OFFICER, THEREFORE, THE 7. ITA NO.45 0, 457, 458 & 459(ASR)/2015 ASST. YEARS 20 08-09 TO 2011-12 ORDERS OF LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF ASSESSING OFFICER BE UPHELD. 6. THE LEARNED AR, ON THE OTHER HAND, HEAVILY PLACE D RELIANCE ON THE ORDERS OF LEARNED CIT(A) AND SUBMITTED THAT LEARNED CIT(A) HAS PASSED AN EXHAUSTIVE AND SPEAKING ORDER AND THEREFORE, SHOULD BE UPHELD. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE FIRST ISSUE IN D ISPUTE IS REGARDING CLAIM OF THE ASSESSING OFFICER THAT ASSESSEE SHOULD HAVE DED UCTED TAX AT SOURCE UNDER THE PROVISIONS OF SECTION 194H AND IN VIEW OF NON D EDUCTION OF TAX THE ADDITIONS U/S 40 (A)(IA) OF THE ACT WERE WARRANTED. WE FIND THAT THE ASSESSEE IS A DISTRIBUTOR OF BHARTI AIRTEL LTD. FOR SALE OF CAR DS, RECHARGE COUPONS, ETC. THE ASSESSEE SELLS THESE PRODUCTS TO SMALL RETAILERS ON DISCOUNT, DISCOUNT BEING THE MARGIN OF THE RETAILERS. THE ASSESSING OFFICER HAD MADE ADDITION TO THE INCOME OF THE ASSESSEE U/S 40(A)(IA) OF THE ACT BY TREATIN G THE DIFFERENCE OF MRP AND SALE PRICE AS COMMISSION PAID BY THE ASSESSEE. WE F IND THAT AS PER THE TERMS OF AGREEMENT WITH THE ASSESSEE AND RETAILERS THERE WAS NO RELATIONSHIP OF PRINCIPAL AND AGENT. ON THE CONTRARY THERE WAS A RE LATIONSHIP OF PRINCIPAL TO PRINCIPAL THEREFORE, THERE WAS NO LIABILITY ON THE PART OF ASSESSEE TO DEDUCT TAX AT SOURCE. SECTION 194H DEALS WITH THE DEDUCTION OF TDS IN RESPECT OF ANY INCOME BY WAY OF COMMISSION OR BROKERAGE. FOR ATTRA CTING THE SAID PROVISIONS THE FOLLOWING REQUIREMENTS MUST BE MET. 8. ITA NO.45 0, 457, 458 & 459(ASR)/2015 ASST. YEARS 20 08-09 TO 2011-12 (I) THE ASSESSEE SHOULD BE RESPONSIBLE FOR PAYING A N INCOME BY WAY OF COMMISSION OR BROKERAGE TO THE DISTRIBUTOR. (II) THERE SHOULD BE A PAYMENT EITHER BY CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR ANY OTHER MODE OR CREDIT OF SUCH INCOME TO THE DISTRIBUTOR IN THE ACCOUNTS OF THE ASSESSEE. (III) TAX IS TO BE DEDUCTED AT THE TIME OF PAYMENT OR CREDIT THEREOF, WHICHEVER IS EARLIER. A COMMISSION IS DEFINED IN E XPLANATION 1 TO SECTION 194H AS ANY PAYMENT RECEIVED OR RECEIVABLE, DIRECTL Y OR INDIRECTLY BY AN AGENT FOR SERVICES RENDERED ON BEHALF OF THE PRINCI PAL. THE ELEMENT OF AGENCY IS AN ESSENTIAL REQUIREMENT FOR TREATING THE TRANSACTIONS AS COMMISSION. THE LEARNED CIT(A) HAS RIGHTLY HELD THAT MARGIN OF RETAILERS CANNOT BE TERMED AS COMMISSION AND AS SUCH THERE WAS NO LIABILITY ON TH E PART OF ASSESSEE TO DEDUCT TDS. IN VIEW OF THE ABOVE GROUND NO.1 OF THE APPEALS IS DISMISSED. 8. AS REGARDS GROUND NO.2, WE FIND THAT THE ASSESSI NG OFFICER HAD DISALLOWED THE CLAIM OF SET OFF OF LOSS MADE BY ASS ESSEE IN VARIOUS YEARS BY HOLDING THAT IN ABSENCE OF INFORMATION AS TO WHETHE R THE SAID LOSS QUALIFY FOR SET OFF AS PER PROVISIONS OF THE ACT THE LOSS CAN N OT BE ALLOWED TO BE SET OFF. THE LEARNED CIT(A) IN THIS RESPECT HAS MADE A FINDING O F FACT THAT THE LOSSES CLAIMED BY ASSESSEE REPRESENTED THE INTEREST ON LOAN TAKEN FOR CONSTRUCTION OF HOUSE PROPERTY AND WAS SHOWN AS NEGATIVE INCOME FROM SELF OCCUPIED PROPERTY WHICH IS ALLOWABLE AGAINST BUSINESS INCOME. THE LEARNED D R COULD NOT CONTROVERT THE 9. ITA NO.45 0, 457, 458 & 459(ASR)/2015 ASST. YEARS 20 08-09 TO 2011-12 ABOVE FINDINGS RECORDED BY LEARNED CIT(A), THEREFOR E, GROUND NO.2 OF THE APPEALS IS ALSO DISMISSED. 9. AS REGARDS GROUND NOS. 3 & 4, REGARDING DISALLOW ANCE OF VARIOUS EXPENSES, WE FIND THAT ASSESSING OFFICER HAD MADE A DDITIONS MERELY ON THE BASIS OF ASSUMPTION WITHOUT PINPOINTING ANY EXPENDI TURE WHICH WAS NOT INCURRED FOR THE PURPOSES OF BUSINESS. WE FURTHER F IND THAT LEARNED CIT(A) HAS RECORDED A FINDING OF FACT THAT THE ADDITIONS OF EX PENSES WERE NOT PART OF REASONS RECORDED FOR REOPENING U/S 148 OF THE ACT, THEREFORE, RELYING UPON THE CASE LAW OF HONBLE DELHI HIGH COURT IN THE CASE OF RANBAXY LABORATORIES LTD. VS. CIT(2011) 336 ITR 136 HAS RIGHTLY DELETED THE D ELETION. THE HONBLE DELHI HIGH COURT IN THE SAID CASE HAS HELD AS UNDER: AS PER EXPLN. 3 TO SECTION 147, AO MAY ASSESSEE OR REASSESS ANY INCOME WHICH HAS ESCAPED ASSESSMENT IF SUCH INCOME COMES T O HIS NOTICE IN THE COURSE OF PROCEEDINGS UNDER THIS SECTION EVEN THOUG H THE SAID ISSUE DOES NOT FIND MENTION IN THE REASONS RECORDED AND THE NO TICE ISSUED UNDER S. 148. HOWEVER, LEGISLATURE CANNOT BE PRESUMED TO HAV E INTENDED TO GIVE BLANKET POWERS TO THE AO THAT ON ASSUMING JURISDICT ION UNDER S. 147, HE CAN KEEP ON MAKING ROVING ENQUIRY AND THEREBY INCLU DING DIFFERENT ITEMS OF INCOME NOT CONNECTED OR RELATED WITH THE REASONS TO BELIEVE ON THE BASIS OF WHICH HE ASSUMED JURISDICTION. HE WOULD BE REQUIRED TO ISSUE A FRESH NOTICE UNDER S. 148 FOR EVERY NEW ISSUE COMING BEFO RE HIM DURING THE COURSE OF ASSESSMENT OR REASSESSMENT PROCEEDINGS WH ICH HE INTENDS TO TAKE INTO ACCOUNT. AO HAD JURISDICTION TO REASSESS INCOME OTHER THAN THE INCOME IN RESPECT OF WHICH JURISDICTION TO REASSES S INCOME OTHER THAN INCOME IN RESPECT OF WHICH PROCEEDINGS UNDER S. 147 WERE INITIATED BUT HE WAS NOT JUSTIFIED IN DOING SO WHEN THE VERY REASONS FOR INITIATION OF THOSE PROCEEDINGS CEASED TO SURVIVE. 10. ITA NO.4 50, 457, 458 & 459(ASR)/2015 ASST. YEARS 20 08-09 TO 2011-12 WE FIND THAT LEARNED CIT(A) HAD RIGHTLY DELETED THE ADDITIONS. IN VIEW OF THE ABOVE GROUND NO. 3 & 4 ARE ALSO DISMISSED. 10. IN NUTSHELL, THE APPEALS FILED BY THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DECEMBER, 2015. SD/- SD/- (A.D.JAIN) (T.S.KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29.12.2015 PK/PS COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.