M/s. Madhu Industries Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-2(1)(4), Ahmedabad

ITA 59/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9887 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 07-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Depreciation
• Section: 40(a)(ia)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA.NO.59/AHD/2016 / ASSTT. YEAR: 2012-13 M/S.MADHU INDUSTRIES P.LTD. 39, PHASE-II, GIDC VATVA, AHMEDABAD. PAN : AAFCM 2587 A VS. ITO, WARD - 2(1)(4) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI SUNIL H. TALATI, AR REVENUE BY : SHRI KAMLESH MAKWANA, SR.DR / DATE OF HEARING : 05/12/2018 / DATE OF PRONOUNCEMENT: 10/12/2018 +,/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-2, AHMEDABAD DATED 16.11.2015 PASSED THE ASSTT.YEAR 20 12-13. 2. THOUGH THE ASSESSEE HAS TAKE FOUR GROUNDS OF APP EAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE LD.CIT(A) H AS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.65,87,433/- WHICH WAS CLAIMED BY THE ASSESSEE AS EXPORT COMMISSION PAID TO NON-RESIDENT AGENT. 3. THE LD.COUNSEL FOR THE ASSESSEE, AT THE VERY OUT SET, SUBMITTED THAT THE ASSESSEE HAS FILED AN APPLICATION UNDER RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 FOR PERMISSION TO LEAD ADDITI ONAL EVIDENCE. HE CONTENDED THAT THE ASSESSEE AT THE RELEVANT TIME WA S ENGAGED IN THE BUSINESS ITA NO.59/AHD/2016 2 OF MANUFACTURING AND PROCESSING GREY CLOTHS. IT HA S DISCLOSED INCOME FROM SALE OF RS.34,71,23,615/-. THE RETURN OF INCOME WA S FILED ON 22.9.2012 ELECTRONICALLY DECLARING NIL INCOME AFTER SETTING O FF OF THE BROUGHT DEPRECIATION LOSS OF RS.7,45,069/-. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE HAS DEBITED EXPORT COMMISS ION OF RS.41,44,457/-. THE LD.AO HAS MADE A DETAILED ANALYSIS AND THEREAFT ER DISALLOWED THE CLAIM AT RS.65,87,433/-. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. BEFORE US, THE ASSESSEE HAS FILED A PAPER BOOK R UNNING INTO 305 PAGES. OUT OF THE ABOVE, IT HAS PLACED DOCUMENTS FROM PAGE NO.76 TO 305 FOR THE FIRST TIME BEFORE THE TRIBUNAL. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT THE LD.CIT(A) HAS C ONFIRMED THE DISALLOWANCE BECAUSE THE ASSESSEE FAILED TO PRODUCE CONFIRMATION FROM THE RECIPIENTS, THEIR IDENTITY, SERVICES RENDERED BY THEM BY FILING COPY OF ANY AGREEMENT WITH FOREIGN AGENTS. ACCORDING TO THE LD.CIT(A) ASSESSE E FAILED TO DEDUCT TDS, THEREFORE, DISALLOWANCE UNDER SECTION 40(A)(IA) HA S ALSO BEEN MADE. THE LD.CIT(A) FURTHER OBSERVED THAT THE ASSESSEE FAILED TO COMPLY WITH PROVISIONS OF RULE 37BB OF I.T.RULES. THUS, BASICALLY DISALLO WANCE HAS BEEN CONFIRMED ON THE GROUND THAT THE ASSESSEE HAS FAILED TO COMPL Y BASIC DETAILS IN SUPPORT OF HIS CLAIM. THE LD.COUNSEL FOR THE ASSESSEE CONTEND ED THAT CERTAIN DOCUMENTS WERE NOT COLLECTED BY THE TAX CONSULTANT AT THAT PO INT OF TIME BY WAY OF EVIDENCE. IT SOUGHT TO PLACE ON RECORD COPY OF EMA IL SENT ON 4.4.2011 (PAGE NO.77). THUS, THERE ARE LOT OF COMMUNICATIONS BETW EEN THE ASSESSEE AND THE ALLEGED RECIPIENT OF COMMISSION BY WAY OF EMAIL, FA X ETC. ON THE STRENGTH OF THESE DOCUMENTS, IT HAS BEEN CONTENDED THAT THE ASS ESSEE WOULD BE ABLE TO DEMONSTRATE NATURE OF SERVICES RENDERED BY FOREIGN AGENTS AND WHY THE ASSESSEE MADE PAYMENT OF COMMISSION. RULE 29 OF THE IT(AT) RULES THOUGH ITA NO.59/AHD/2016 3 PROHIBITS PARTIES TO THE APPEAL FOR PRODUCING ANY E VIDENCE EITHER ORAL OR DOCUMENTARY, BUT IF THE TRIBUNAL REQUIRES ANY DOCUM ENTS TO BE PRODUCED TO ENABLE IT TO PASS ORDER, THEN TRIBUNAL MAY DIRECT P ARTIES FOR PRODUCTION OF SUCH EVIDENCE. BASICALLY, THIS IS A PROVISION WHICH EMP OWERS THE TRIBUNAL TO TAKE ON RECORD ANY MATERIAL FOR SUBSTANTIAL CAUSE OF JUS TICE BETWEEN PARTIES. PRIMA FACIE ON THE STRENGTH OF THESE COMMUNICATIONS, IT REVEAL THAT FOREIGN AGENTS HAVE ACTED ON BEHALF OF THE ASSESSEE. THUS, TO SOM E EXTENT NATURE OF SERVICES AND THEIR IDENTITY COULD BE DEMONSTRATED. THEREFOR E, IN VIEW OF NATURAL OF JUSTICE, WE DEEM IT APPROPRIATE TO TAKE THESE EVIDE NCES ON RECORD. THE EVIDENCE COULD BE READ ONLY IF AN OPPORTUNITY IS BE ING GIVEN TO THE AO FOR REBUTTING THESE EVIDENCES. THEREFORE, WE DEEM IT A PPROPRIATE TO SET ASIDE THIS ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION. THE LD.AO SHALL PERMIT THE ASSESSEE TO FILE THESE DOCUMENTS AFRESH OR ANY OTHE R EXPLANATION IN SUPPORT OF ITS CASE. THE AO SHALL DECIDE THE ISSUE IN ACCORDA NCE WITH LAW AFTER PROVIDING DUE OPPORTUNITY OF HEARING. THE OBSERVATION MADE BY US WILL NOT IMPAIR OR INJU RE THE CASE OF THE ASSESSING OFFICER AND ALSO WILL NOT CAUSE ANY PREJU DICE TO THE DEFENCE/EXPLANATION OF THE ASSESSEE. THE ISSUE BE DECIDED IN ACCORDANCE WITH LAW AFTER TAKING INTO CONSIDERATION FRESH EVIDENCE. THUS, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 10 TH DECEMBER, 2018 AT AHMEDABAD. SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 10/12/2018