Ashu Enterprises, Cuttack V. ITO, Cuttack

ITA 570/CTK/2013

• Counselvise Citation: 57022114 RSA 2013
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 23-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK . . , . . , BEFORE SHRI P.K.BANSAL , AM & SHRI D.T.GARASIA , JM ./ ITA NO. 570 / C TK /20 1 3 ( / ASSESSMENT YEAR : 20 0 8 - 0 9 ) M/S ASHU ENTERPRISES, C/O, R.C.SWAIN AT MAHATGAB ROAD, P.O. ARUNODAYA MARKET, CUTTACK - 753012 VS. ITO, WARD - 2 (1) , CUTTACK. ./ ./ PAN/GIR NO. : A AJFA 0195 K ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI KESHAV DUBEY /REVENUE BY : SHRI S.C.MOHANTY / DATE OF HEARING : 1 ST MAY , 201 4 / DATE OF PRONOUNCEMENT : 02/05 /20 14 / O R D E R PER BENCH : TH IS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT ( A ) DATED 23 - 9 - 2013 BY TAKING FOLLOWING GROUNDS OF APPEAL : - 1) THAT, ON THE FACTS & CIRCUMSTANCES OF THE CASE THE LEARNED AUTHORITIES BELOW HAVE ERRED IN NOT ACCEPTING THE FACT THAT MERE NETTING OFF THE COMMISSION EXPENSES LEDGER DOES NOT HAVE ANY ADVERSE EFFECT ON REVENUE & THERE IS NEITHER ANY SUPPRESSION OF INCOME NOR ANY DIFFERENCE AS ALLEGED. 2) THAT, ON THE FACTS & CIRCUMSTANCES OF THE CASE THE L EARNED AUTHORITIES BELOW HAVE ERRED IN MAKING ADDITION OF RS. 7,20,000/ - AS SUPPRESSION OF INCOME ESPECIALLY WHEN THE AUDITED BOOKS OF ACCOUNTS PRODUCED BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS & NO DEFECTS IN ACCOUNTS WERE POINTED OUT. 3) TH AT, THE LEARNED AUTHORITIES BELOW SHOULD HAVE ALLOWED RS. 27,29,008.35 UNDER COMMISSION EXPENSES INSTEAD OF RS. 19,88,630/ - AS CLAIMED ESPECIALLY WHEN CREDIT SIDE OF P&L A/C INCREASED TO RS. 39,40,222/ - INSTEAD OF RS. 32,70,222/ - AS CLAIMED. 2 ITA NO. 5 70 /CTK /201 3 4) THAT, LEARNED C IT(APPEALS) ERRED IN LAW IN NOT ACCEPTING THAT RAISING & RECOVERING OF DEMAND OF TAX AMOUNTING TO RS. 2,64,974/ - WITHOUT SERVING NOTICE OF DEMAND U/S. 156 IS ILLEGAL & BAD IN LAW. 2 . THE ISSUE INVOLVED IN THE ALL THESE GROUNDS RELATES TO ADDITION OF RS. 7 ,20,000/ - AS SUPPRESSION OF INCOME UNDER THE HEAD COMMISSION. 3 . BRIEF FACTS OF THE CASE ARE THAT THE AO DURING THE SCRUTINY FOUND FROM THE 26AS DETAILS AND THE TDS CERTIFICATES, NOTED THAT THE ASSESSEE HAS RECEIVED GROSS COMMISSION AMOUNTING TO RS. 39,90 ,222/ - WHEREAS THE ASSESSEE HAS TAKEN THE COMMISSION AT RS. 32,70,222/ - IN ITS PROFIT AND LOSS ACCOUNT. THEREFORE, THE AO ADDED A SUM OF RS. 7,20,000/ - . THE MATTER WENT BEFORE THE CIT(A) , WHO DISMISSED THE APPEAL OF THE ASSESSEE. 4. WE HEARD RIVAL SUBMISSION S AND CAREFULLY CONSIDERED THE SAME . WE NOTED FROM PAGE 33, WHICH IS COMMISSION AND INCENTIVE ACCOUNT APPEARING IN THE LEDGER OF THE ASSESSEE THAT A SUM OF RS. 7,20,000/ - AS COMMISSION RECEIVED FROM VINSON INDUSTRIES PVT. LTD. HAS BEEN CREDITED BY THE ASSES SEE UNDER THIS HEAD THROUGH GENERAL ENTRIES. IN VIEW OF THIS, THE ASSESSEE HAS CREDITED A SUM OF RS. 20 , 378.35 RECEIVED AS INCENTIVE. THE ASSESSEE HAS ALSO DEBITED EXPENSES WHAT HAS BEEN INCURRED BY THE ASSESSEE IN RESPECT OF HIS COMMISSION IN THE ACCOUNT , THE TOTAL EXPENSES INCURRED BY THE ASSESSEE AT RS. 27,29,008.35. THE ONLY NET SUM OF RS. 19,88,630/ - HAS BEEN CHARGED BY THE ASSESSEE TO THE PROFIT AND LOSS ACCOUNT. THUS, THE SUM OF RS. 7,20,000/ - SINCE 3 ITA NO. 5 70 /CTK /201 3 CREDITED BY THE ASSESSEE SEPARATELY IS IN BUILT STAND CREDITED IN THE EXPENSES CLAIMED BY THE ASSESSEE. THE ACTUAL EXPENDITURE CLAIMED BY THE ASSESSEE COMES TO RS. 27,29,008.35 , WHICH IS ONLY AFTER DEDUCTING A SUM OF RS. 7,40,378.35. THE ASSESSEE HAS DEBITED A SUM OF RS. 19,88,630/ - . T H E AO AS WELL AS CIT(A),I N OUR OPINION, COULD NOT CORRECTLY APPRECIATED THE FACTS AND ADDITION OF RS.7,20,000/ - WAS SUSTAINED IN THE INCOME OF THE ASSESSEE. HENCE, WE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE ADDITION OF RS. 7,20,000/ - . 5 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 02/05 / 201 4 . 02/05 /2014 SD/ - SD/ - ( . . ) ( D.T.GARASIA ) ( . . ) ( P.K.BANSAL ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 02/05 /2014 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) , BHUBANESWAR 4. / CIT , BHUBANESWAR 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//