M/s. Addagio Overseas, New Delhi V. DCIT, New Delhi

ITA 5512/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3913 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 04-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 16-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: S K CHATHURVEDI
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NOS.5512 & 5513/DEL/2015 ASSESSMENT YEARS : 2010-11 & 2011-12 ADDAGIO OVERSEAR, 1/18B, ASAF ALI ROAD, NEW DELHI. PAN: AAFFA4164Q VS. DCIT, CENTRAL CIRCLE-2, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. CHATHURVEDI, CA DEPARTMENT BY : SHRI T. VASANTHAN, SR. DR DATE OF HEARING : 14.09.2017 DATE OF PRONOUNCEMENT : 15.09.2017 ORDER THESE TWO APPEALS BY THE ASSESSEE ARISE OUT OF THE SEPARATE ORDERS PASSED BY THE LD. CIT(A) ON 14.7.2015 IN RELATION T O THE ASSESSMENT YEARS 2010-11 & 2011-12. SINCE BOTH THE APPEALS ARE BASED ON SIMILAR FACTS, I AM PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.5512 & 5513/DEL/2015 2 2. THESE ARE RECALLED MATTERS INASMUCH AS THE EARLI ER EX PARTE ORDER PASSED BY THE TRIBUNAL FOR BOTH THE YEARS WAS SUBSE QUENTLY RECALLED VIDE ITS ORDER DATED 28.07.2017 IN MA NOS.09 & 10/DEL/20 17 3. THE ONLY ISSUE RAISED IN THESE APPEALS IS AGAINS T THE CONFIRMATION OF DISALLOWANCE OF COMMISSION PAYMENT. 4. BRIEFLY STATED, THE FACTS FOR THE ASSESSMENT YEA R 2010-11 ARE THAT THE ASSESSEE DEBITED A SUM OF RS.16,83,734/- AS BRO KERAGE PAID ON SALES AND RS.1,25,000/- BY WAY OF DEBIT IN PROFIT & LOSS ACCOUNT AS BROKERAGE. SIMILARLY, A SUM OF RS.10,47,592/- WAS ALSO DEBITED IN THE TRADING ACCOUNT ON ACCOUNT OF BROKERAGE PAID ON PUR CHASES. THE ASSESSEE WAS CALLED UPON TO FURNISH COMPLETE DETAIL S ABOUT THE PARTICULARS OF THE PERSONS TO WHOM BROKERAGE WAS PA ID AND THE NATURE OF SERVICES RENDERED. ON GOING THOUGH THE DETAILS CON SISTING OF THE PARTICULARS OF THE RECIPIENTS ONLY DE HORS THE NATURE OF SERVICES, THE ASSESSING OFFICER OBSERVED THAT 66% OF SALE AND PUR CHASES EFFECTED DURING THE YEAR WERE CLAIMED TO BE MADE WITH THE HE LP OF ONE FAMILY ONLY. OUT OF THE TOTAL PAYMENT MADE AS COMMISSION/ BROKERAGE, THE ITA NO.5512 & 5513/DEL/2015 3 ASSESSING OFFICER FOUND THAT A SUM OF RS.16,72,241/ - WAS PAID TO FOUR FEMALE MEMBERS OF THE FAMILY, NAMELY, ASTHA GUPTA, ANUPAMA GUPTA, SUMAN GUPTA AND SHAILJA GUPTA. SUMMONS WERE ISSUED U/S 131 OF THE ACT TO THESE FOUR FEMALE MEMBERS REQUIRING THEM TO PRODUCE THE BOOKS OF ACCOUNT AND VOUCHERS ALONG WITH THEIR ANNUAL ACC OUNTS FOR THE LAST THREE YEARS. NONE OF THE FOUR PERSONS APPEARED ON THE GIVEN DATE. ON 22.10.2012, THE ASSESSING OFFICER CALLED UPON THE A SSESSEE TO PRODUCE THE ABOVE REFERRED FOUR PERSONS. INSTEAD OF PRODUCI NG THESE FOUR PERSONS, WRITTEN SUBMISSIONS WERE FILED IN DAK ALONG WITH CONFIRMATIONS AND COPY OF ITRS. THE ASSESSING OFFICER REQUIRED THE A SSESSEE TO PRODUCE THESE PERSONS FOR SHOWING THE SERVICES RENDERED BY THEM FOR WHICH THE SAID COMMISSION WAS PAID. ONCE AGAIN, SUMMONS WERE ISSUED U/S 131, BUT, OF NO AVAIL. THE ASSESSING OFFICER MADE DISALL OWANCE OF RS.16,72,241/-, BEING THE PAYMENT MADE TO THESE FOU R FEMALE MEMBERS OF THE SAME FAMILY. UNDER SIMILAR CIRCUMSTANCES AN D PROCEEDINGS IN WHICH NO EVIDENCE OF SERVICES WAS PRODUCED BY THE A SSESSEE FOR WHICH COMMISSION/BROKERAGE WAS PAID TO THE FEMALE MEMBERS , THE ASSESSING OFFICER MADE AN ADDITION OF RS.10 LAC IN HIS ORDER FOR THE ASSESSMENT ITA NO.5512 & 5513/DEL/2015 4 YEAR 2011-12. THE ASSESSEE REMAINED UNSUCCESSFUL I N THE FIRST APPEAL. NOW THE ASSESSEE IS AGGRIEVED BEFORE THE TRIBUNAL. 5. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELE VANT MATERIAL ON RECORD, IT IS OBSERVED THAT DESPITE GIVING SEVERAL OPPORTUNITIES AND ISSUING SUMMONS U/S 131 OF THE ACT TWICE, THE ASSES SEE FAILED TO PRODUCE FEMALE MEMBERS FROM ONE FAMILY TO WHOM THE COMMISSI ON WAS PAID. THERE IS A COMPLETE ABSENCE OF ANY PROOF OF THEIR H AVING RENDERING ANY SERVICES TO THE ASSESSEE. THE POSITION CONTINUED TO REMAIN THE SAME BEFORE THE LD. CIT(A) AND THE TRIBUNAL AS WELL. UN DER THESE CIRCUMSTANCES, IT BECOMES APPARENT THAT THE ASSESSE E COULD NOT LEAD ANY EVIDENCE TO ESTABLISH THAT THE SERVICES WERE RENDER ED BY THESE PERSONS. AS SUCH, THERE CANNOT BE ANY QUESTION OF ALLOWING SUCH COMMISSION AS DEDUCTION. THE MERE FACT THAT THE COMMISSION WAS R ECORDED BY THE RECIPIENTS IN THEIR RETURNS CANNOT ABSOLVE THE ASSE SSEE FROM ESTABLISHING THE FACTUM OF THEM HAVING RENDERED SERVICES AS A QUID PRO QUO FOR THE PAYMENT OF BROKERAGE. SINCE THE ASSESSEE MISERABLY FAILED TO PRODUCE AN IOTA OF EVIDENCE OF THE FEMALE MEMBERS OF A FAMILY RENDERING ANY ITA NO.5512 & 5513/DEL/2015 5 SERVICES FOR EFFECTING SALES FOR WHICH COMMISSION W AS PAID, I AM SATISFIED THAT THE AUTHORITIES BELOW WERE FULLY JUS TIFIED IN MAKING AND SUSTAINING THE DISALLOWANCE FOR BOTH THE YEARS UNDE R CONSIDERATION. 6. IN THE RESULT, BOTH THE APPEALS ARE DISMISSE D. THE ORDER PRONOUNCED IN THE OPEN COURT ON 15.09.201 7. SD/- [R.S. SYAL] VICE PRESIDENT DATED, 15 TH SEPTEMBER, 2017. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.