DCIT, Alwar V. ASHIANA ISPAT. LTD., BHIWADI

ITA 535/JPR/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99424 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 29-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA SINGH
• Assessee Lawyers: P K MISHRA C A DHK
• Keywords: Additional evidence
• Section: 37(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 535/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11. DEPUTY COMMISSIONER OF INCOME TAX, (CENTRAL) CIRCLE- ALWAR CUKE VS. M/S ASHIANA ISPAT LTD., A-1116, IND. AREA, BHIWADI. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AACCA 8749 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA SINGH (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI NIRAJ JAIN & SHRI P.K. MISHRA (C.A.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06/10/2015. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 30/10/2015. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 30/03/2015 OF THE LEARNED C.I.T.(A)-4, JAIPUR FOR A. Y. 2010-11. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY TH E A.O. ON ACCOUNT OF COMMISSION EXPENSES OF RS. 95,44,810/- CLAIMED BY THE ASSESSEE ON SALES. 2 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY TH E A.O. ON ACCOUNT OF COMMISSION EXPENSES ON SALES, IGNORING THAT MERELY FURNISHING OF CONFIRMATIONS, P AN, COPY OF RETURN AND BANK STATEMENTS CANNOT IN ALL CA SES TANTAMOUNT TO SATISFACTORY DISCHARGE OF ONUS THE PA RT OF THE ASSESSEE COMPANY, IN ESTABLISHING THAT SERVICES WERE ACTUALLY RENDERED BY THE BROKERS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY TH E A.O. ON ACCOUNT OF COMMISSION EXPENSES ON SALES, IGNORING THAT THE BUSINESS USE OF THE EXPENDITURE CLAIMED WAS NOT PROVED, AND THEREFORE, THE EXPENDITU RE WAS NOT ALLOWABLE U/S 37(1) OF THE IT ACT, 1961. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY TH E A.O. ON ACCOUNT OF COMMISSION EXPENSES ON SALES, IGNORING THAT THE HONBLE ITAT ORDER HAS BEEN ACCEPT ED BY THE DEPARTMENT AS HAS BEEN CHALLENGED BEFORE THE HON'BLE HIGH COURT. 2. THE ASSESSEE FILED RETURN ON 27/09/2010 DECLARING TOTAL INCOME OF RS. 2,43,32,535/-. THE ASSESSEE COMPANY IS ENGAGED IN M ANUFACTURING AND TRADING OF TMT BARS AND MS INGOTS. ALL THE GROUNDS OF REVENUES APPEAL ARE INTERLINKED AND AGAINST DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF COMMISSION EXPENSES OF RS. 95,44,810/ - THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD CLAIMED EXPE NSES UNDER THE HEAD 3 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. BROKERAGE AND COMMISSION AT RS. 95,44,810/-. THE LD ASSESSING OFFICER ASKED TO FILE COPY OF LEDGER ACCOUNT OF ALL THE PER SONS TO WHOM COMMISSION/BROKERAGE WAS PAID AND DETAILS OF SERVICE S RENDERED. THE ASSESSEE WAS ALSO ASKED TO PRODUCE THE COMMISSION AG ENT/BROKERS FOR EXAMINATION. THE CASE WAS FIXED FOR HEARING ON 04/3/2 013. ON 04/3/2013, THE AR OF THE ASSESSEE ATTENDED BUT NOT PRODUCED AN Y COMMISSION AGENT FOR EXAMINATION. THE ASSESSEE FILED COPY OF AGREEMENTS WI TH BROKER AND THEIR LEDGER ACCOUNTS AND NAME AND ADDRESS ETC. ON 11/3/2 013 THE ASSESSEE AGAIN HAD NOT PRODUCED THE BROKERS/COMMISSION AGENT FOR EXAMINATION. HE FURTHER OBSERVED THAT THE BROKERAGE COMMISSION WAS P AID ON THE SALES TO THE ASSOCIATE CONCERNED LIKE RMIL. THE COMMISSION PA YMENT WAS ROUND FIGURE AND EXPENSES WERE BOOKED ON 31/3/2010 I.E. FA G END OF THE FINANCIAL YEAR. THE ASSESSEE WAS ASKED TO FILE CONFIRMATIONS FR OM THE PURCHASER OF ITS GOODS THAT BROKERS WERE INVOLVED IN SALES AFFECTED B Y ASSESSEE COMPANY. THE CASE WAS FIXED FOR HEARING ON 21/3/2013 AND ON TH AT DATE, THE ASSESSEE FILED A DETAILED REPLY. IT IS FOUND THAT ALL THE BR OKERAGE PAYMENTS WERE CREDITED ON THE LAST DAY OF THE ACCOUNTING YEAR AND THE PAYMENT HAD BEEN MADE IN THE NEXT YEAR. IN ADDITION, THE BILLS RAIS ED BY ALL THESE SAID BROKERS MOSTLY HAVE BEEN RAISED ON THE LAST DAY OF THE ACCO UNTING YEAR OR IN THE LAST 4 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. MONTH OF THE ACCOUNTING YEAR. NORMAL PRACTICE OF TH E BUSINESS REQUIRED A BILL TO BE RAISED AS AND WHEN IT BECOMES DUE.. RAIS ING OF BILLS BY ALMOST ALL THE BROKERS ON THE LAST DAY OR LAST MONTH OF THE AC COUNTING YEAR GIVES THE IMPRESSION THAT THE BILLS WERE ISSUED AT THE INSISTE NCE OF THE ASSESSEE AS PER ITS REQUIREMENT TO MAKE ADJUSTMENT IN THE P&L ACCOU NT TO BRING DOWN THE PROFIT TO THE DESIRED LEVEL OF THE ASSESSEE. THE LD ASSESSING OFFICER FURTHER OBSERVED THAT IT WAS SURPRISING TO NOTE THAT THESE S O CALLED BROKERS CLAIMED TO PROVIDE SERVICES FOR THE WHOLE YEAR AND SILENTLY WAIT FOR NEXT 6 MONTHS OR MORE TO RECEIVE PAYMENT AGAINST THE SERVICE PROVIDE D. NO PRUDENT PERSON WOULD LIKE TO DO A JOB AND DEMAND REMUNERATION AGAIN ST IT AFTER SIX MONTHS OR A YEAR. ON VERIFICATION OF SALE BILLS, IT WAS NOT ICED BY THE ASSESSING OFFICER THAT THE NAME OF ANY BROKER WAS NOT APPEARING ON ANY SALE BILL FOR WHICH THEY SAID BROKERS HAD ARRANGED SALES. IT WAS A TRADE PRACTICE TO MENTION THE NAME OF BROKER ON THE SALE BILL FOR THE SALES WHICH HAD INVOLVEMENT OF ANY BROKER TO MAINTAIN RECORD REGARDING CLAIM OF BROKER AGE. HOWEVER, ABSENCE OF ANY MARK REGARDING BROKERAGE ON SALE BILL, REVEA LS THAT ASSESSEE HAD MADE A MAKE BELIEVE ARRANGEMENT TO CLAIM COMMISSION EXPENSES. IT WAS ALSO NOTICED THAT COMMISSION HAD BEEN PAID TO SOME LADIES, WHO HAPPENS TO BE THE RELATIVES OR WIVES OF BROKERS, THEREFORE, THE SE LADIES APPEARED TO BE 5 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. JUST NAME LENDERS. WHOLE GAUMT OF RAISING BILL FOR COMMISSION AT THE FAG END OF THE YEAR AND RECEIVING CHEQUES FROM THE ASSESSEE COMPANY FOR COMMISSION IN THE NEXT YEAR WAS A MADE BELIEVE ARRAN GEMENT BETWEEN THE ASSESSEE COMPANY AND THESE SO CLAIMED BROKERS TO SI PHON OFF THE PROFIT TO EVADE TAX. THE BILLS WERE RAISED AT THE FAG END OF TH E YEAR AFTER CALCULATING THE ADJUSTMENT TO BE MADE IN THE P&L ACCOUNT TO RED UCE THE PROFIT. THE LD ASSESSING OFFICER RELIED ON THE FOLLOWING DECISIONS: (I) NIEMLA TEXTILES FINISHING MILLS PVT. LTD. VS. C IT 100 ITR 611 (P&H) FOR AGREEMENT MADE AND MAKE BELIEVE ARRANGEME NT. (II) PRECISION INSTRUMENT MANUFACTURING CO. VS. CI T 137 ITR 5 (DEL) FOR AGREEMENT MADE, CORRESPONDENCE MADE BETWEEN BROK ER AND THE COMPANY. (III) VISHNU COTTON MILLS VS. CIT 117 ITR 754 (CAL) FOR NATURE OF SERVICE RENDERED BY THE BROKER. 2.1 THE LD ASSESSING OFFICER FURTHER OBSERVED THAT T HERE WERE AGREEMENTS OF BROKER APPOINTMENT WITH THESE BROKERS BUT IT WAS N OT THE CONCLUSIVE PROOF THAT THESE BROKERS HAD REALLY RENDERED SOME S ERVICE TO THE ASSESSEE COMPANY. ALL THESE AGREEMENTS WERE STEREO TYPE IN NA TURE AND IT APPEARS THAT THESE HAD BEEN PREPARED BY THE ASSESSEE. FURTH ER THE SO CALLED 6 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. CONFIRMATIONS GIVEN WERE ALSO STEREO TYPE IN NATURE, MOST PROBABLY PREPARED BY THE ASSESSEE. PERUSAL OF THE AGREEMENTS FILED SH OWED THAT A SPECIFIC CLAUSE HAD BEEN INSERTED THAT NO WRITTEN COMMUNICATI ONS WAS NECESSARY. THE LD ASSESSING OFFICER FURTHER OBSERVED THAT THIS WAS INCORPORATED PERHAPS WITH A VIEW TO PREEMPT THE REVENUE FROM ASKING FOR PR OOF OF THE WRITTEN COMMUNICATION. THE ASSESSEE COULD NOT PROVIDE ANY EV IDENCE OF CORRESPONDENCE BETWEEN THEM EXCEPT AGREEMENT OF APPO INTMENT AND ONE BILL RAISED AT THE FAG END OF THE YEAR FOR COMMISSI ON. AS PER ASSESSING OFFICER ANOTHER INTERESTING FEATURE WAS THAT MOST OF THE FIGURES WERE DEBITED BY THE ASSESSEE IN AMOUNTS JUST ABOVE ROUND FIGURES LIKE 1 LAC, 1.5 LAC, 2 LACS, 2.5 LACS ETC. THE ROUND FIGURE WAS SHOWN TO BE P AID IN CHEQUE AND THE BALANCE PETTY AMOUNTS WERE SHOWN AS PAID IN CASH. NO CASH RECEIPTS OF THESE PETTY AMOUNTS WERE AVAILABLE IN THE VOUCHERS. THE LD ASSESSING OFFICER FURTHER ANALYSED THE COMMISSION PAYMENT OF LAST THREE F.Y. AS PER ASSESSING OFFICER, IT WAS NOTICED THAT THERE WERE CER TAIN PURCHASERS WHO WERE BEING SERVED BY DIFFERENT BROKERS IN DIFFERENT YEARS, WHICH WAS PRACTICALLY NOT POSSIBLE. SOME OF THE INSTANCES ARE AS UNDER:- NAME OF PURCHASER NAME OF BROKER A.Y. BALAJI TRADING JAGDISH BHANDER CHUG 2008-09 BALAJI TRADING YES TRADING COMPANY 2009-10 BATTU RAM MAHENDRA KUMAR MAHENDRA KUMAR GOENKA 2007 -08 7 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. BATTU RAM MAHENDRA KUMAR MANJO GOYAL 2008-09 BATTU RAM MAHENDRA KUMAR MANJU GOYAL 2009-10 BHARAT BHUSHAN CONTRACTOR CS GOEL & CO 2008-09 BHARAT BHUSHAN CONTRACTOR MAMAN CHAND GOEL 2009-10 BHARAT STEEL CO ANKIT GARG 2009-10 BHARAT STEEL CO CHANDER SHEKHAR GOYAL 2007-08 BHARAT STEEL CO SHAKTI STEEL & CEMENT CO 2008-09 BHARAT STEEL TRADERS JAIPUR APPORVA ARORA 2007-08 BHARAT STEEL TRADERS JAIPUR GANPATI STEEL CORPORATI ON 2009-10 BHARAT STONE CO BEENA GOAL 2008-09 BHARAT STONE CO GARG STEEL 2009-10 BIHARI LAL KISHAN LAL NARESH GARG 2008-09 BIHARI LAL KISHAN LAL VINAYAK IMPEX 2009-10 BIHARI LAL KISHAN LAL ROHTAK SANGITA ARORA 2007-08 KRISHNA CONSTRUCTION GULSHAN GUPTA 2009-10 KRISHNA CONSTRUCTION PANKAJ GARG 2008-09 MEHTAB ENTERPRISES SHIKHA GARG 2008-09 MEHTAB ENTERPRISES SUMIT KATARIA 2009-10 NEERAJ STEEL SANJAY MITTAL 2008-09 NEERAJ STEEL VINAYAK IMPEX 2009-10 THE ASSESSING OFFICER FURTHER HELD THAT THIS IS AGA INST HUMAN PROBABILITIES AND FURTHER REVENUE-ENFORCES THE FACT OF ACCOMMODAT ION ENTRIES AND HE FOUND THAT NO SERVICES HAD BEEN RENDERED BY THE SO CLAIMED BROKERS TO WARRANT ANY COMMISSION AND HELD THAT COMMISSION DEBI TED AT RS. 95,44,810/- HAS NOT BEEN INCURRED FOR BUSINESS PURP OSES, ACCORDINGLY HE DISALLOWED COMMISSION DEBITED AT RS. 95,44,810/-. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE THE MATTER BEFORE THE LD CIT(A), WHO HAD DELETED THE ADDITION BY PASSING A 8 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. DETAILED SPEAKING ORDER. THE MAIN FINDING OF THE LD CIT(A) IS REPRODUCED AS UNDER:- 5.4 THE FACTS AND CIRCUMSTANCES DISCUSSED ABOVE WILL INDICATE THAT IN THE SIMILAR CIRCUMSTANCES THE CLAIM OF THE APPEL LANT OF PAYMENT OF BROKERAGE AND COMMISSION ON SALES AS WELL AS ON PURCHASES HAS BEEN ALLOWED BY THE HONBLE ITAT. IN FA CT IN RESPECT OF ASSESSMENT YEAR 2007-08 TO 2009-10 WHEN T HE LD CIT(A) DISALLOWED THE CLAIM OF BROKERAGE/COMMISSION O N SALES IN RESPECT OF THOSE BROKERS WHO HAVE NOT EXECUTED AG REEMENTS FOR SUCH WORK IN THE BEGINNING FOR THE F.Y., THE HON BLE ITAT EVEN ALLOWED PAYMENT OF BROKERAGE/COMMISSION IRRESPE CTIVE OF FACT THAT NO AGREEMENTS ON STAMP PAPER WERE EXECUTED WITH THE BROKERS. IN THE A.Y. UNDER CONSIDERATION THE AP PELLANT HAS ALSO EXECUTED AGREEMENTS ON STAMP PAPER WITH THE BRO KERS. THE FACTS OF THE CLAIM OF BROKERAGE/COMMISSION IN RE SPECT OF A.Y. UNDER CONSIDERATION IS SIMILAR TO THE FACTS OF EARLIER ASSESSMENT YEARS, PARTICULARLY A.Y. 2007-08 TO 2009 -10 AND THE HONBLE ITAT HAS ALLOWED SUCH CLAIM TO THE APPELLANT IN EARLIER YEARS. THE FINDINGS OF THE JURISDICTIONAL ITAT IN THE APPELLANT OWN CASES IS OF BINDING NATURE. RELIANCE IS PLACED O N THE FOLLOWING CASE LAWS:- I) AGARWAL WARE HOUSE AND LEASING LTD. VS. CIT 257 I TR 235 (MP) II) BANK OF BARODA VS. HON'BLE HIGH COURT SRIVASTA VA & ANOTHER 256 ITR 385 (BOMBAY) 9 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. III) VOEST ALPINE IND. GBBH VS. ITO 246 ITR 745 (CAL .) IV) AVON APPARELS VS. ITO 22, TAXWORLD 399 (ITAT JAIPU R) V) EAGLE FLASK INDUSTRIES VS. DCIT 72 ITD 458 (ITA T PUNE). RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ITAT IN APPELLANT OWN CASE IN EARLIER ASSESSMENT YEARS AND T HE FACTS OF THE APPELLANT CASE IN RESPECT OF ASSESSMENT YEAR UN DER CONSIDERATION FOR CLAIM OF BROKERAGE/COMMISSION ON SALE FOUND TO BE IDENTICAL, THE CLAIM OF BROKERAGE/COMMISSION ON SALES AMOUNTING TO RS. 95,44,810/- IS TO BE ALLOWED. ACCOR DINGLY ADDITION MADE BY THE ASSESSING OFFICER IS DELETED. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HEAVILY RELIED ON THE FINDING OF THE ASSESSING OFFICER AND ARGUED TH AT THE ASSESSEE HAD NOT PRODUCED THE COMMISSION AGENT FOR EXAMINATION BEFOR E THE ASSESSING OFFICER EVEN ON TWO OPPORTUNITIES PROVIDED BY THE LD ASSESSING OFFICER TO THE ASSESSEE. THE ASSESSEE FURNISHED THE CONFIRMATION, C OPY OF LEDGER ACCOUNT BEFORE THE ASSESSING OFFICER BUT BROKERAGE WAS PAID AT THE FAG END OF THE YEAR AND PAYMENTS WERE MADE THROUGH CHEQUES IN ROUND AMOUNTS AND REMAINING AMOUNT WAS PAID IN CASH. THE ASSESSEE COULD NOT PRODUCE THE CORRESPONDENCES MADE BETWEEN THE ASSESSEE AND BROKER S. THE NAMES OF THE BROKERS HAVE NOT BEEN SHOWN IN THE SALE BILLS, WHICH INDICATE THAT THE BROKERS WERE NOT INVOLVED IN THE SALE TRANSACTION. TH E ASSESSEES ALLEGED AGREEMENT WITH THE BROKERS ARE STEREO TYPE ON STAMPS BUT THE ASSESSEE HAD 10 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. NOT ESTABLISHED SERVICES RENDERED BY THE BROKERS AN D JUSTIFICATION TO COMMISSION PAYMENT, THEREFORE, HE PRAYED TO CONFIRM THE ORDER OF THE LD ASSESSING OFFICER. 5. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS SUB MITTED THAT SIMILAR COMMISSIONS/BROKERAGE WERE PAID FROM A.Y. 2003-04 TO 2009-10 AND SIMILAR ADDITIONS WERE MADE BY THE ASSESSING OFFICER, WHICH WA S CHALLENGED BEFORE THE LD CIT(A). THE ASSESSEE HAD FILED COPY OF AGREEME NT WITH BROKERS, COPY OF CONFIRMATIONS OF COMMISSION PAYMENT, LIST OF BRO KERAGE/COMMISSION PAID WITH NAME AND ADDRESS OF BROKERS/COMMISSION AGENT. H E FURTHER ARGUED THAT THE ASSESSEE IS IN INGOTS BUSINESS AND RUNNING A STEEL PLANT. MOST OF THE SALES WERE MADE THROUGH BROKERS. IT IS A COMMON PRAC TICE IN THIS LINE OF BUSINESS AND NO SALES CAN BE MADE WITHOUT THE HELP O F BROKERS. THE PERCENTAGE OF BROKERAGE IS MORE OR LESS FIXED. HE H AS PARTICULARLY DRAWN OUR ATTENTION ON PAPER BOOK VOLUNE-1 AND VOLUMN-2. THE A SSESSEE WAS ABLE TO MAKE SALE MORE THAN 209 CRORES DURING THE YEAR WITH THE HELP OF COMMISSION AGENT. HE FURTHER REITERATED THE ARGUMEN TS MADE BEFORE THE LD CIT(A) AND RELIED THE CASE LAWS REFERRED BEFORE HIM, WHICH IS SUMMARIZED AS UNDER:- 11 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. (1) ALUMINIUM CORPORATION OF INDIA LTD. VS. CIT WE ST BENGAL (SUPREME COURT) WHEREIN IT HAS BEEN HELD THAT BROKE RS HAVE DULY CONFIRMED THE COMMISSION AND SERVICE PROVIDED VIA THE CONFIRM ATIONS AS WELL AS THE DECLARATIONS. THESE DETAILS ARE SUFFICIENT THAT BROK ERS HAVE PROVIDED THE SERVICE. THE LD ASSESSING OFFICER SHOULD COLLECT SOM E CONCRETE EVIDENCE TO PROVE THE SHOW CALLED NEXUS TO PROVE HIS SUSPICION. THE LD ASSESSING OFFICER MERELY HELD SUSPICION BUT COMMISSION WAS PAID WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE CASE LAW CITED BY THE AS SESSING OFFICER ARE NOT APPLICABLE IN THE CASE OF ASSESSEE. THE LD AR HAS DR AWN OUR ATTENTION ON CASE LAWS, WHICH WAS REFERRED BY THE ASSESSING OFFICE R IN THE ASSESSMENT ORDER. HE FURTHER RELIED ON THE DECISION IN THE CAS E OF UMACHARAN SHAW & BROS VS. COMMISSIONER OF INCOME-TAX, WEST BENGAL [1 959] 37 ITR 271 (SC), A. S. SIVAN PILLAI VS COMMISSIONER OF INC OME-TAX, MADRAS [1958] 34 ITR 328 (MAD), COMMISSIONER OF AGRICULTURA L INCOME- TAX, KERALA VS. M. J. CHERIAN [1979] 117 ITR 371 (KE R). HE FURTHER ARGUED THAT THE HONBLE ITAT JAIPUR BENCH, JAIPUR IN ASSESSEES OWN CASE HAS CONSIDERED SIMILAR ISSUE FOR A.Y. 2003-04 TO 20 09-10 VIDE ORDER DATED 19/12/2014 WHEREIN THE HONBLE ITAT HAS ALLOWED THE AP PEAL IN FAVOUR OF THE ASSESSEE AND CONSIDERED THIS ISSUE IN DETAIL. H E HAS DRAWN OUR ATTENTION 12 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. ON PAGE NO. 83 OF THE ORDER DATED 19/12/2014 AND PA RAGRAPH NO. 15, WHICH HAS BEEN CONSIDERED BY THE LD CIT(A). THEREFORE, HE PRAYED TO DISMISS THE REVENUES APPEAL. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE FACTS OF T HE CASE ARE IDENTICAL TO A.Y. 2003-04 TO 2009-10. THE ASSESSEE HAD FILED THE COPY OF AGREEMENT, CONFIRMATIONS AND IT IS A FACT THAT THE ASSESSEE HA D DEDUCTED TDS, THE RECIPIENT HAD PAN NUMBERS AND ASSESSEE HAS ESTABLIS HED THAT THEY HAVE RENDERED SERVICES TO PROVIDE THE CUSTOMER FOR SELLI NG THE TMT BAR & M S INGOTS. THE COORDINATE BENCH IN ASSESSEES OWN CASE F OR A.Y. 2003-04 TO 2009-10 HAS HELD AS UNDER:- 15. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAS FIL ED CONFIRMATION EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A). THE LEARNED CIT(A) HAD CALLED REMAND REPORT ON ADDITIONAL EVIDENCE FURNISHED BEFORE HIM. BESIDES C ONFIRMATION, THE APPELLANT ALSO SUBMITTED PAN NUMBER OF THE RECI PIENTS AND COPY OF RETURN AND ALSO DEDUCTED THE TDS ON IT. SER VICE TAX CHARGED ON THE COMMISSION BILL BY THE RECIPIENTS. T HE PAYMENTS WERE MADE TO THESE BROKERS THROUGH BANKING CHANNELS. IT IS TRUE THAT THE APPELLANT AS WELL AS S UPPLIERS HAS NOT MENTIONED IN BILL THE NAME OF THE BROKERS THROU GH WHOM 13 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. SALES OR PURCHASES HAVE BEEN MADE. IT IS A FACT THA T IN THE LINE OF BUSINESS, MOST GOODS IS BEING SOLD THROUGH BROKE RS, ON WHICH, COMMISSION IS PAID. THE PURCHASE IS ALSO MADE THROUGH BROKERS, THEREFORE, IT REQUIRES TO PAID COMMISSION TO MIDDLE MAN WHO MAKE AVAILABLE OF GOODS FROM THE MARKET AND ALSO GUARANTEED THE AMOUNT IS TO BE RECOVERED AND PAID. THIS BENCH HAD DECIDED IN THE CASE OF M/S KAMDHENU ISPA T LIMITED VS. ACIT IN ITA NOS. 662 TO 668/JP/2012 FOR A.Y. 200 3-04 TO 2009-10 ORDER DATED 21/11/2014 WHEREIN IDENTICAL AND SIMILAR ADDITIONS WERE MADE BY THE LEARNED ASSESSING OFFICE R AND PARTLY CONFIRMED BY THE LEARNED CIT(A). THE MODUS O PERANDI OF BOTH THE ASSESSEES ARE SAME. BOTH ARE PAYING COMMIS SION ON SALES AS WELL AS ON PURCHASES. IT IS NOTICED FROM TH E ORDER OF KAMDHENU ISPAT LTD. (SUPRA) THAT FOLLOWING PARTIES N AME WERE FIGURED IN COMMISSION PAYMENT LIST, WHICH HAS BEEN A CCEPTED BY THE LEARNED CIT(A) AS GENUINE AND ALLOWED THE APPE AL OF M/S KAMDHENU ISPAT LTD. WHERE NO SECOND APPEAL HAS B EEN FILED BY THE ASSESSING OFFICER. NAMES OF BROKERS AS PER ASSESSMENT YEARS WISE, M/S KAMDHENU ISPAT LTD. HAD PAID COMMISSION ARE AS UNDER:- A.Y. 2003-04 A.Y. 2004-05 PARTYS NAME PARTYS NAME 1. AJAY TRADERS 1. SH. MAMAN CHAND GOYAL 2. SH. VIKRANT MAHAJAN 2. SH. NARESH GARG 3. SH. GULSHAN GUPTA. 3. SH. VIKRANT MAHAJAN 4. SH. DHARMPAL KHERA 4. AJAY TRADERS 5. SH. MAMAN CHAND GOYAL 14 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. 6. SH. SANJAY GUPTA 7. SH. NARESH GARG 8. SH. ANIL KUMAR 9. RAJIV GARG (HUF) A.Y. 2005-06 A.Y. 2006-07 PARTYS NAME PARTYS NAME 1. AJAY TRADERS 1. AJAY TRADERS 2. SH. NARESH GARG 2. SH. ANIL KUMAR 3. AMAN STEEL. 3. SH. JAGDISH MANCHANDA 4. SH. CHANDRASHEKHAR STEEL 4. SH. NARESH KUMAR GA RG 5. SH. JAGDISH MANCHAND 5. SH. RAJIV GARG (HUF) 6. SH. KANTA MODI 6. SMT.SHARDA MANCHANDA 7. SH. MAMAN CHAND GOYAL 7. SMT. SHASHI BALA GARG . 8. PROJECT CONSULTANT 8. SH. VIKRANT MAHAJAN. 9. SMT. SHARDA MANCHANDA 10. SH. VIKRANT MAHAJAN. A.Y. 2007-08 A.Y. 2008-09 PARTYS NAME PARTYS NAME 1. SH. JAGDISH MANCHAND 1. AGARWAL STEEL CORP. 2. AJAY TRADERS 2. SH. ANIL KUMAR 3. SH. GULSHAN GUPTA 3. SH. ANIL KISHARA 4. SH. DHARMPAL KHERA 4. SH. ANKIT GARG 5. M/S GARG STEEL 5. SH.ASHOKA KR.DANG & SONS 6. SH. MANCHAND GUPTA 6. SH. DEEPAK MITTAL 7. SH. SANJAY GUPTA 7. SH. DHARAMPAL KHERA 8. SH. VIKRANT MAHAJAN 8. GANPATI STEEL CORP. 9. GARG STEEL 10. SH. GULSHAN GUPTA 11. SMT. KIRTIKA JAIN 12. SH. MANCHAND GOYAL 13. SH. MAMAN JAIN 15 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. 14. SH. NARESH KR. GARG 15. SH. NEERAJ JAIN 16. SH.NEERAJ JAIN & SONS HUF 17. SH. PURSHOTAM KR. GOYAL 18. SH. ROSHAN LAL GUPTA 19. SANGAM BUILDWAY 20. SANGAM IRON & STEEL CO. 21. SH. SANJAY GUPTA 22. SH. SANJAY MITTAL 23. SH. SANJAY DANG & SONS HUF 24. SH. SARTHAK GUPTA 25. SH. UMESH KUMAR HUF 26. SMT. VANDANA JAIN 27. SH. VIKRAM MAHAJAN. 28. SH. VIKRANT MAHAJAN. A.Y. 2009-10 PARTYS NAME 1. SH. ANIL KR. MAHAJAN (HUF) 2. BHAWAN STEEL 3. SH. DINESH GUPTA 4. ESS ENN ENTERPRISES 5. SH. NARESH GARG 6. PARASH CEMENT, IRON & STEEL CO. 7. SH. ROSHAN KUMAR DUA 8. SH. RAJENDRA GARG 9. SH. SACHIN GUPTA HUF HOWEVER, IN APPELLANTS CASE, THE COMMISSION PAID TO THE ABOVE PARTIES HAVE BEEN CHALLENGED BY THE DEPARTMEN T BEFORE US. IT IS TOTAL CONTRADICTORY ON PART OF THE REVENU E THAT IN ONE CASE, THEY ARE ACCEPTING THESE ABOVE PARTIES AS GEN UINE AND IN 16 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. ANOTHER NON-GENUINE. EVEN WE HAVE GONE THROUGH THE EVIDENCE FURNISHED BY THE APPELLANT BEFORE THE ASSE SSING OFFICER AS WELL AS THE LEARNED CIT(A), WHICH SHOWED THE ASSESSEE HAD DISCHARGED HIS ONUS CAST UPON IT. THE L EARNED CIT(A) ALSO SPECIFICALLY CONFIRMED THE ADDITION IN C ASE OF RUCHIRARAJ IN A.Y. 2008-09 UNDER THE HEAD COMMISSIO N PAID ON PURCHASE, SIDHBALI PAPER MILL LTD., MARUTI PAPER LT D. AND IN A.Y. 2007-08 IN THE NAME OF BALAJI CELLULOSE PRODUCT LTD ., BABA ALLOYS PVT. LTD. AND IN A.Y. 2004-05 IN THE NAME OF BIHAR RAFIA INDUSTRIES LTD., CULCUTTA, IN A.Y. 2005-06 IN THE N AME OF M/S SAND CHEM (I) LTD. WHEREIN THE LEARNED CIT(A) CONFIRM ED THE ADDITION ON THE BASIS OF PARTIES WERE NOT DEALING IN THE ITEM ON WHICH COMMISSION PAID BY THE APPELLANT AND THEIR MAI N OBJECT OF MEMORANDUM OF ARTICLE AS WELL AS ANCILLARY OBJECT HAVE NOT BEEN ALLOWED TO DEAL IN SUCH ITEMS. THE APPELLANTS A RGUMENTS THAT FOR COMMISSION BUSINESS NO SPECIFIC OBJECT IS TO BE PROVIDED IN THE MEMORANDUM OF ARTICLES BUT ALL THE COMPANIES ARE ALLOWED UNDER THE COMPANIES LAW TO DO MISCELLAN EOUS BUSINESS EITHER IN FORM OF COMMISSION OR ANY OTHER INCOME. FURTHER COMMISSION PAID TO RUCHIRARAJ IS GIVEN FOR SUPPLY OF GOODS, WHICH HAS BEEN ARRANGED BY THE BROKERS, IS NO BAR UNDER THE LAW THAT A CONTRACTOR OR CONSULTANT CANNOT SUPPLY THE GOODS ON COMMISSION BASIS. IT HAS BEEN CLAIMED BY T HE APPELLANT THAT SHRI RUCHIRARAJ HAS INFORMATION ABOU T SUPPLY AND DEMAND OF THE MATERIAL. THE APPELLANT HAD MADE AGREE MENT WITH HIM. THE ASSESSEE HAS FILED COPY OF BILL AND LED GER AND 17 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. PAYMENTS HAVE BEEN MADE THROUGH ACCOUNT PAYEE CHEQU ES TO HIM (PAGE NO. 58 OF PAPER BOOK OF A.Y. 2008-09), IN WHICH, THE RECIPIENT CHARGED SERVICE TAX, WHICH PROVES THAT HE HAS RENDERED SERVICE FOR THE APPELLANT. IT IS FURTHER FOUND THAT IN THE ASSESSEES GROUP, SEARCH SEIZURE OPERATION HAD CARRIED OUT BY THE DEPARTMENT BUT NO INCRIMINATING DOCUMENTS FO UND ON ACCOUNT OF COMMISSION PAYMENT. THE ASSESSEE HAD SHOW N TURNOVER IN A.Y. 2003-04 AT RS. 57.04 CRORES, IN A. Y. 2004-05 RS. 73.11 CRORES, IN 2005-06 RS. 99.45 CRORES, IN A .Y. 2006-07 RS. 117.75 CRORES, IN 2007-08 RS. 170.02 CRORES, IN A.Y. 2008- 09 RS. 196.05 CRORES AND IN A.Y. 2009-10 RS. 234.44 CRORES. THE ASSESSEE HAS DISCHARGED PRIMARY ONUS CAST UPON I T. THERE IS NO MATERIAL WITH THE ASSESSING OFFICER TO DISPUTE THE EVIDENCES SUCH AS CONFIRMATION, COPY OF PAN, COPY O F RETURN, TDS CERTIFICATE, COPY OF BANK ACCOUNT ETC. FILED BY THE ASSESSEE. IN CASE OF COMMISSION PAID TO M/S SIDHBAL I PAPER MILL LTD., THE ASSESSEE HAD DRAWN OUR ATTENTION ON PAGE N O. 451 OF PAPER BOOK AND MARUTI PAPER LTD. ON PAGE NO. 455 OF PAPER BOOK FOR A.Y. 2008-09. FOR BALAJI CELLULOSE PRODUCT LTD. PAGE NO. 176 OF PAPER BOOK AND BABA ALLOYS PVT. LTD. PAG E NO. 153 OF PAPER BOOK OF A.Y. 2007-08. FOR BIHAR RAFIA INDU STRIES LTD. CALCUTTA PAGE NO. 307 OF PAPER BOOK OF A.Y. 2004-05 AND FOR SEND CHEM (I) LTD. PAGE NO. 82 TO 85 OF PAPER BOOK OF A.Y. 2005-06, WHICH SHOWED THAT THE ASSESSEE HAD DEDUCTED TDS, PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES, GI VEN PAN NUMBER OF THE PARTIES AND CONFIRMED THE COMMISS ION 18 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. PAYMENT. THE LAW DOES NOT REQUIRE FROM THE ASSESSEE T O ENTER IN AGREEMENT ON STAMP PAPER FOR CLAIMING COMMISSION AS HELD IN THE CASE OF CHICAGO PNEUMATIC INDIA LTD. VS. DY. CIT (2007) 15 SOT 252 (MUM.). THE BOOKS OF ACCOUNT ARE AUDITED WH ICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER, SALE AN D PURCHASE HAVE BEEN TREATED GENUINE, BUT DOUBTED THE COMMISSI ON PAYMENT AND THE LEARNED ASSESSING OFFICER MADE ADDI TION ON SURMISES AND CONJECTURES. THEREFORE, WE ARE OF THE C ONSIDERED VIEW THAT COMMISSION PAID BY THE ASSESSEE EITHER ON SALE AND PURCHASE ARE ALLOWABLE AS THE EXPENSES INCURRED WHOLL Y AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS U/S 37 OF T HE ACT. BY RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECIS ION IN ASSESSEES OWN CASE ON IDENTICAL FACTS AND CIRCUMSTANCES, WE UPHOLD THE ORDER OF THE LD CIT(A). ACCORDINGLY, REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 30/10/2015. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 TH OCTOBER, 2015 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE DCIT, (CENTRAL) CIRCLE- ALWAR 19 ITA NO. 535/JP/2015 DCIT VS ASHIANA ISPAT LTD. 2. IZR;FKHZ @ THE RESPONDENT- M/S ASHIANA ISPAT LTD., BHIWADI. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.535/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR