DCIT 10(2), MUMBAI V. LAXMI BOARD & PAPER MILLS LTD, MUMBAI

ITA 5896/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2297 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 04-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH , MUMBAI BEFORE SRI MAHAVIR SINGH, J M AND SRI RAMIT KOCHAR , AM ITA NO . 5 896 /MUM/2013 (A.Y: 2010 - 11 ) THE D Y. COMMISSIONER OF INCOME TAX - 10 ( 2 ), ROOM NO.432, 4 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI 400 0 20 VS. M/S. LAXMI BOARD & PAPER MILLS LTD., 308, RUNWAL CENTRE C. H. S. LTD., B. S. G. MARG, GOVANDI, MUMBAI - 88 PAN:AAACI 0662Q APPELLANT .. RESPONDENT APPELLANT BY .. SRI A. RAMACHANDRAN, SR. DR RESPONDENT BY .. NONE DATE OF HEARING .. 20 - 10 - 2 016 DATE OF PRONOUNCEMENT .. 20 - 10 - 2016 O R D E R PER MAHAVIR SINGH , JM : THIS APPEAL BY THE REVENUE IS ARISING OU T OF THE ORDER OF THE CIT - (A) - 21 , MUMBAI IN APPEAL NO. CIT (A) 21/ IT /172 / 2 0 12 - 13 DATE D 31 ST JULY, 2013 . ASSESSMENT WAS FRAMED BY THE DC I T , RANGE - 10 (2) , MUMBAI FOR THE ASSESSMENT YEAR 2010 - 11 VIDE HIS ORDER DATED 08 - 02 - 2013 U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) . 2. THE ONLY ISSUE IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF TH E CIT ( A) , MUMBAI IN DELET ING THE ADDITION MADE BY THE AO ON ACCOUNT OF COMMISSION TREATED AS NON - GENUINE IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962 (HEREINAFTER THE RULES). FOR THIS THE REVENUE HAS RAISED THE FOLLOWING GROUND NO.1: - 1. ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT (A) ERRED IN DELETING ADDITION OF RS.54,90,364/ - REPRESENTING COMMISSION PAID ADMITTING ADDITIONAL EVIDENCED WITHOUT CONFRONTING THE SAME WITH THE AO IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962. 3. WE HAVE HEARD THE LEARNED SR. DR AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS ENGAGED IN ITA NO. 5 896 /MUM/20 1 3 2 THE BUSINESS OF MANUFACTURING OF M. G. / M. F. KRAFT PAPER, KRAFT LINER WHITE & KRAFT BOARD. DURING TH E ASSESSMENT PROCEEDINGS, ON VERIFICATION OF PROFIT & LOSS ACCOUNT, THE AO NOTICED THAT THE ASSESSEE HAS PAID COMMISSION OF RS.2,07,14,282/ - ON SALE OF ON SALE OF 108,94,79,533/ - PAID TO 28 AGENTS. THE ASSESSEE FILED A LIST OF AGENTS. THE AO REQUIRED THE A SSESSEE TO PROVE THE PAYMENT OF COMMISSION AND SERVICES RENDERED BY THESE COMMISSION AGENTS. THE ASSESSEE CLAIMED THAT IN EARLIER YEAR I.E. ASSESSMENT YEAR 2009 - 10, THE COMPANY HAS PAID COMMISSION AND THE SAME WAS DELETED BY THE CIT (A). BUT THE AO, IN THE ABSENCE OF SUBSTANTIVE DOCUMENTARY EVIDENCES OF RENDERING OF SERVICES NOTED THAT IT IS NOT PROVED THAT SERVICES HAVE BEEN RENDERED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE. ACCORDINGLY, HE DELETED THE PART OF THE COMMISSION PAID TO THE AGENTS AMOUN TING TO RS.54,90,360/ - . AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A). THE ASSESSEE BEFORE THE CIT (A) FILED FRESH EVIDENCES IN THE SHAPE OF CONFIRMATION FROM THESE AGENTS INCLUDING THEIR PERMANENT ACCOUNT NUMBER, INCOME TAX DETAILS, AMOUN T SHOWN IN THE PROFIT & LOSS ACCOUNT, LEDGER ACCOUNT, BANK STATEMENT, FORM NO.16A AND COMMISSION PAYMENT .THE CIT (A) WITHOUT REFERRING THESE EVIDENCES TO THE AO, DELETED THE DISALLOWANCE OF COMMISSION PAYMENT. AGGRIEVED, NOW THE REVENUE IS IN SECOND APPEA L BEFORE THE TRIBUNAL. 4. AFTER HEARING THE LEARNED SR. DR AND GOING THROUGH THE FACTS OF THE CASE, WE NOTED THAT THE ASSESSEE BEFORE THE CIT (A) FILED DETAILS IN RESPECT OF THESE COMMISSION AGENTS, COMMISSION PAID BUT, THESE EVIDENCES WERE NEVER CONFRON TED TO THE AO NOR ANY VERIFICATION WAS CARRIED OUT ABOUT THE GENUINENESS OF THE EVIDENCES. IN VIEW OF THE ABOVE FACT AND IN THE INTEREST OF JUSTICE, WE RESTORE THIS ISSUE BACK TO THE FILE OF THE CIT (A) TO ALLOW OPPORTUNITY TO THE AO AND CONFRONT THE EVIDE NCES TO THE AO FOR VERIFICATION. AFTER THAT, THE CIT (A) WILL DECIDE THE ISSUE. IN TERMS OF THE ABOVE, THE REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 5 896 /MUM/20 1 3 3 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 9 - 10 - 2016 . BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI SR. NO. PARTICULARS DATE INITIALS MEMBER CONCERNED 1 DICTATION GIVEN ON 20 / 1 0/16 LK DEKA JM 2 DRAFT PLACED BEFORE AUTHOR 21 /10/16 / 26/10/16 3 DRAFT PROPOSED/PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND ME MBER 5 APPROVED DRAFT COMES TO THE SR.PS 6 KEPT FOR PRONOUNCEMENT ON 7 FILE SENT TO THE BENCH CLERK 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER SD/ - (RAMIT KOCHAR ) ACCONTANT MEMBER MUMBAI, DATED: 20 - 10 - 2016 LAKSHMIKANTA DEKA/SR.PS SD/ - ( MAHAVIR SINGH ) JUDICIAL MEMBER COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//