DCIT. CIR-10, KOLKATA, Kolkata V. M/s Magnum Clothing (P) Ltd., Kolkata

ITA 61/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1113 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 13-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Section: 143(3); 133(6); 37

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.61/KOL/2014 ASSESSMENT YEAR:2008-09 DCIT, CIRCLE-10, P-7, CHOWRINGHEE SQUARE, 3 RD FLOOR, KOLKATA-69 / V/S . M/S MAGNUM CLOTHING (P) LTD., 133, CANNING STREET, KOLKATA-700 001 [ PAN NO.AACCM 0783 F ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SAURABH KUMAR, ADDL. CIT-DR /BY RESPONDENT SHRI ANIL KOCHAR, ADVOCATE /DATE OF HEARING 18-09-2017 /DATE OF PRONOUNCEMENT 26-10-2017 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLKATA DATED 08.10.2013. ASSESSMENT WAS FRAMED BY JCIT (OSD), CIRCLE-10, KOLKATA U/S 143(3) OF THE IN COME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 29.1 2.2011 FOR ASSESSMENT YEAR 2008-09. SAURABH KUMAR, LD. DEPARTMENTAL REPRESENTATIVE APPE ARED ON BEHALF OF REVENUE AND SHRIANIL KOCHAR, LD. ADVOCATE APPEARED ON BEHALF OF ASSESSEE. 2. SOLITARY ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY ASSESSING OFFICER FOR 3,58,78,841/- ON ACCOUNT OF NON CONFIRMATION. ITA NO.61/KOL/2014 A.Y. 2008-09 DCIT CIR-10 KOL. VS. M/S MAGNUM CLOTHING (P ) LTD. PAG E 2 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS A PRIV ATE LIMITED COMPANY AND ENGAGED IN BUSINESS OF MANUFACTURING AND EXPORT OF READY-MA DE GARMENTS. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS CLAIMED MANUFACTURING EXPENSES WHICH INTER ALIA INCLUDE PROCESSING, DYEING CHARGES, EMBROIDERY CHARGES, STI TCHING CHARGE, FINISHING CHARGES, WASHING AND IRONING CHARGES ETC. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ISSUED NOTICES TO SEVERAL PARTIES U/S 133(6) OF THE ACT TO ESTABLISH THE MANUFACTURING EXPENSES CLAIMED BY ASSESSEE. HOWEVER, IN MANY CASE S, NOTICES WERE NOT SERVED AND RETURNED BACK WITH DIFFERENT REMARKS LEFT, NO SUC H ADDRESSES AS WELL AS INSUFFICIENT ADDRESS. IN SOME CASES, NOTICES WERE DELIVERED TO T HE PARTIES BUT THEY DID NOT MAKE ANY REPLY TO THE NOTICE ISSUED U/S 133(6) OF THE ACT. I N ONE OF THE CASE THE CASE THE AO ALSO OBSERVED DIFFERENCE IN THE AMOUNT OF EXPENSES AND D ECLARED IN THE TDS CERTIFICATE. 4. ON QUESTION TO THE ASSESSEE ABOUT THE NON-DELIVE RY AS WELL AS NON RESPONSE OF THE NOTICES ISSUED U/S. 133(6) OF THE ACT, ASSESSEE FILED THE CONFIRMATION FROM ALL THE PARTIES. HOWEVER, THE AO WAS OF THE VIEW THAT THE C ONFIRMATION CANNOT BE RELIED FULLY IN VIEW OF NON RESPONSE / NON SERVICE OF NOTICES U/ S 133(6) OF THE ACT. THUS, AO MADE DISALLOWANCE OF 3,58,78,841/- AND ADDED TO THE TOTAL INCOME OF ASSE SSEE BY OBSERVING AS UNDER:- A STITCHING CHARGES NAME AMOUNT (RS) REMARKS 1. J.S. APPAREL 13,59,260 LEFT 2. M.M. EXPORTS 46,35,594 REPLY NOT RECEIVED 3. MARAN GARMENTS 11,20,883 -DO- 4. NARU EXPORTS INDIA LTD 9,94,519 -DO- 5. SAI APPARELS 9,67,448 LEFT 6. SRI ARUNAI GARMENTS 13,02,480 REPLY NOT RE CEIVED 7. SUN STAR GARMENTS 33,46,668 LEFT 8. TEX WEAR EXPORTS 24,38,339 BEING DIFFERENC E IN (33,99,996 + 94,206 - EXPENDITURE SHOWN AND 7,55,753) TDS 9. TARIKA APPARELS 11,75,772 LEFT B. WASHING & IRON CHARGES 1. UPENDRA ENTERPRISES 5,91,146 NO SUCH AD DRESS C. EMBROIDERY CHARGES 1. NEEDLECRAFT EMBROIDERY 15,50,316 RELY NOT RECEIVED 2. PIONEER EMBROIDERIES TRIMS 14,81,937 -DO- ITA NO.61/KOL/2014 A.Y. 2008-09 DCIT CIR-10 KOL. VS. M/S MAGNUM CLOTHING (P ) LTD. PAG E 3 D. PROCESSING AND DYEING CHARGES 1. GEETHA & COMPANY 78,14,403 -DO- 2. TEXVISION 55,55,186 INSUFFICIENT ADDRESS E. FINISHING CHARGES 1. SRI KAMATCHI GARMENTS 15,44,890 COULD NOT BE SERVED BY RS.3,58, 78,841/- POSTAL DEPARTMENT AND THEIR REMARKS ARE GIVEN IN LOCAL LANGUAGE 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT ALL THE BILLS / IN VOICE WERE FILED BEFORE AO IN SUPPORT OF THE MANUFACTURING EXPENSES CLAIMED DURIN G THE YEAR. THE PAYMENTS TO ALL THE PARTIES WERE MADE THROUGH ACCOUNT PAYEE CHEQUE. THESE MANUFACTURING EXPENSES WERE INCURRED IN THE AY 2007-08 AND CONFIRMATION LE TTERS WERE SENT IN THE YEAR 2011 ALMOST AFTER A GAP OF FOUR YEARS APPROXIMATELY. DUR ING THE PERIOD OF FOUR YEARS, MANY PARTIES MIGHT HAVE SHIFTED THEIR OFFICES OR MIGHT H AVE CLOSED DOWN THEIR ACTIVITIES. THUS, NON RESPONSE FROM THE PARTIES/ NON DELIVERY O F NOTICE ISSUED U/S. 133(6) OF THE ACT CANNOT THE BASIS FOR MAKING THE DISALLOWANCE IN THE HANDS OF ASSESSEE. LD. CIT(A) IN HIS APPELLATE PROCEEDINGS CALLED FOR REMAND REPO RT FROM THE AO WHEREIN CERTAIN PARTIES HAS CONFIRMED THE TRANSACTIONS WITH THE ASS ESSEE IN RESPONSE TO NOTICE U/S 133(6) OF THE ACT. THE DETAILS OF THE PARTY ARE REP RODUCED AS UNDER:- SL.NO NAME OF THE PARTY NATURE OF EXPENDITURE DATE OF RECEIPT OF CONFIRMATION BY A.O 1 M.M. EXPORTS STITCHING CHARGES 09.03.12 2 MARAN GARMENTS -DO- 04.07.13 3 UPENDRA ENTERPRISES WASHING & IRON CHARGES 15.06.13 4 PIONEER EMBROIDERIES EMBROIDERY CHARGES 06.01.12 5 TEXVISION PROCESSING & DYEING CHARGES 27.05.13 THE ASSESSEE IN RESPECT OF OTHER PARTIES MADE A SUB MISSION AS DETAILED UNDER:- 1. J. S. APPARELS THIS IS IN RESPECT OF STITCHING CHARGES. THE APPELL ANT STATES THAT THE PARTY WAS A PROPRIETORSHIP CONCERN AND HAS SINCE MOVED FROM THE ADDRESS,. THE ASSESSEE HAD NO DEALING WITH HIM AT PRESENT. THE ASSESSEE HAD TRANS ACTION WITH THE PARTY FROM ITA NO.61/KOL/2014 A.Y. 2008-09 DCIT CIR-10 KOL. VS. M/S MAGNUM CLOTHING (P ) LTD. PAG E 4 17.01.2008J027.06.2008.: COPIES OF-THE BILLS/CHALLA NS FOR THAT PERIOD WERE PRODUCED FOR PERUSAL. LT IS STATED THAT ALL THE PAYMENTS HA VE BEEN MADE BY ACCOUNT PAYEE CHEQUE ONLY. 2. NARU EXPORTS THE PAYMENTS ARE IN RESPECT OF STITCHING CHARGES. I T IS STATED THAT THE PARTY HAD SENT THE REPLY TO THE ASSESSING OFFICER AGAINST THE NOTI CE U/S, 133(6) VIA SPEED POST. THE COPY OF THE RECEIPT FROM THE POSTAL DEPARTMENT HAS BEEN FILED. 3. NEEDLECRAFT EMBROIDERY THE PAYMENTS ARE IN RESPECT OF EMBROIDERY WORK. ACC ORDING TO THE APPELLANT, THE PARTY HAD CONFIRMED THE BALANCE AND THE SAME HAD BE EN SUBMITTED TO THE ASSESSING :OFFICER. IT IS STATED THAT ALL THE BILLS, CHALLANS FOR THE PERIOD ARE MAINTAINED AND ALL THE PAYMENTS HAVE BEEN MADE BY A/C. PAYEE CHEQUES O NLY . 4. GEETHA & COMPANY THESE ARE FOR PROCESSING AND DYEING CHARGES. IT IS STATED THAT THE PROPRIETOR OF GEETA & COMPANY, LATE P. VASANTH KUMAR HAD EXPIRED ON 4TH APRIL 2010 AND THEREAFTER, THERE WERE NO TRANSACTION WITH THE PARTY. THE COPY OF DEATH CERTIFICATE OF MR. P. VASANTH KUMAR HAS BEEN FILED. 5. TEX WEAR EXPORTS THE APPELLANT 'FILED THE COPIES OF LEDGER SUMMARY F OR FINANCIAL YEAR 2006-2007 AND FINANCIAL YEAR: 2007, 2008 AND COPIES OF TDS CERTIF ICATES FOR THE AFORESAID PERIODS. IT IS STATED THAT DURING THE FINANCIAL YEAR2007-2008 T HERE IS OPENING BALANCE OF. RS.2438229/- FOR WHICH TDS HAS ALREADY BEEN DEDUCTE D IN THE FINANCIAL YEAR 2006- 2007. IT IS SUBMITTED THAT THE ASSESSING OFFICER HA D WRONGLY TREATED THE OPENING BALANCE AS EXPENSES INCURRED DURING THE YEAR AND LE VIED THE TAX THEREON. 6. SUN STAR GARMENTS IT IS STATED THAT THE PARTY HAS CLOSED ITS STITCHIN G UNIT UNDER THE FIRM'S NAME SUN STAR GARMENTS ARID THAT ALL THE BILLS/CHALLANS AND BANK STATEMENTS WHERE THE ASSESSES'S CHEQUES ARE MAINTAINED, WHICH HAVE BEEN PRODUCED BE FORE ME. 7. THARLKA APPARELS IT IS STATED' THAT THE ASSESSES HAD THE TRANSACTION S WITH THE PARTY FROM 21.01 2008 TO 06.04.2009 AND THAT AT PRESENT THE PARTY HAD CLOSED THE BUSINESS AND WHEREABOUTS OF THE FIRM IS NOT KNOWN. IT IS SUBMITTED THAT THE APP ELLANT ALL THE BILLS/CHALLANS COPY OF BANK STATEMENT WHERE OUR CHEQUES ARE CLEARED ARE KE PT AND PRODUCED BEFORE ME. 8. SAL APPARELS THE APPELLANT SUBMITS THAT IT HAD TRANSACTION WITH THE PARTY FROM 04.11.2005 TO 18.06:2010 AND THAT AT PRESENT;' THE WHERE-ABOUTS O F THE PARTY IS NOT KNOWN. IT IS SUBMITTED THAT ALL THE BILLS/CHALLANS AND BANK STAT EMENT WHERE OUR CHEQUES ARE CLEARED KEPT, WHICH HAVE BEEN PRODUCED BEFORE ME.. 9. SRI KAMATCHL GARMENTS THE APPELLANT STATED TO HOVE PAID FINISHING CHARGES TO THIS PARTY. IT IS FURTHER STATED THAT IT HAD TRANSACTIONS WITH THE PARTY FROM 18.03. 20D5TO 20.05.2011AND THAT AT PRESENT, THE PARTY HAD CLOSED ITS BUSINESS. ALL THE BILLS/CHALLANS FOR THE AFORESAID PERIOD HAVE BEEN PRODUCED. IT IS STATED THAT ALL TH E PAYMENTS HAVE BEEN MODE-BY ACCOUNT PAYEE CHEQUE ONLY. ITA NO.61/KOL/2014 A.Y. 2008-09 DCIT CIR-10 KOL. VS. M/S MAGNUM CLOTHING (P ) LTD. PAG E 5 AFTER CONSIDERING THE SUBMISSION OF ASSESSEE LD. CI T(A) DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER:- 5.1.4. DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE MATERIAL PLACED ON RECORD, THE REMAND REPORT OF THE ASSESSING OFFICER AND THE SUBM ISSIONS PUT FORTH ON BEHALF OF THE APPELLANT COMPANY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE APPELLANT COMPANY, DURING TH E RELEVANT FINANCIAL YEAR, WAS ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT O F READYMADE GARMENTS. THE ASSESSING OFFICER HAD EXAMINED THE BOOKS OF ACCOUNT S AND DOCUMENTS PRODUCED BY TEST CHECK. THE ASSESSING OFFICER FOUND THAT THE AC COUNTS OF THE APPELLANT WAS GOT AUDITED THROUGH CHARTERED ACCOUNTANT. AS REGARDS, T HE MANUFACTURING EXPENSES, THE APPELLANT FURNISHED DETAILS OF BILLS AND CHALLANS A ND BANK STATEMENTS SHOWING THAT THE PAYMENTS FOR STITCHING, EMBROIDERY WORK, FINISHING WORK, ETC., WERE PAID TO DIFFERENT PARTIES THROUGH ACCOUNT PAYEE-CHEQUES, ALONG WITH C ONFIRMATIONS AND COPIES OF LEDGER ACCOUNTS. THE APPELLANT ALSO PROVIDED ADDRES SEE OF PARTIES TO WHOM' THE ASSESSING OFFICER ISSUED NOTICES UNDER SEC. 133(6) OF THE ACT. SINCE NO COMPLIANCE HAS BEEN RECEIVED IN COMPLIANCE WITH THE SAID NOTICES, EXCEPT IN ONE CASE, WHERE DIFFERENCE WAS FOUND IN THE ACCOUNTS, THE ASSESSING OFFICER HELD THAT THE PARTIES WERE NON-EXISTENT END THE ENTIRE EXPENDITURE AGGREGATING TO RS.3,58,78,841/- WAS NOT ALLOWABLE. THE ASSESSING OFFICER DID NOT ACCEPT THE CONFIRMATION AND OTHER DETAILS FURNISHED BY THE APPELLANT ON THE GROUND THAT IT W AS NOT ' SACROSANCT ', WHEN NOTICES UNDER SEC.133(6) WERE NOT COMPLIED WITH. 5.1.5. THE FACT THAT THE APPELLANT COMPANY CARRIED ON MANUFACTURING AND EXPORT BUSINESS IS NOT DOUBTED. THE ASSESSING OFFICER HAS NOT EXAMINED THE REASONABILITY OF THE EXPENDITURE INCURRED. HE HAS ALSO HOT RECORDED ANY DEAR FINDING THAT THE EXPENDITURE WAS NOT REAL THAT IT WAS BOGUS. HE HAS SIMPLY DISALLOWED THE SAME IN THE LIGHT OF THE NON-COMPLIANCE WITH NOTICES UNDER SEC. 133(6). FROM THE MATERIAL AVAILABLE ON RECORD, IT IS CLEAR THAT THE APPELLANT HAS DISCHARGED ITS ONUS OF PROVIDING THE IDENTITY OF THE PAYEES. IT IS ALSO A FACT THAT IN THE REMAND REPORT THE ASSESSING OFFICER HIMSELF HAS MENTIONED THAT CONFIRMATION HAS BEEN RECEIVED IN THE CASES OF AT LEAST 5 PARTIES. ADMITTEDLY, IN THE CASE OF ONE PAR TY, NAMELY, TEX WEAR EXPORTS, IT WAS ONLY OPENING BALANCE WHICH THE AO HAS BROUGHT TO TA X. THERE IS ALSO NO DENYING THE FACT THAT THE PAYMENTS WERE MADE THROUGH ACCOUNT PA YEE CHEQUES CLEARED FROM THE APPELLANT'S BANK ACCOUNT AS IS EVIDENCED FROM THE B ANK STATEMENTS. IN THE CASE OF MOTHER & PLATT (INDIA) LTD .V. CIT[1987] 16S ITR 49 3 (CAL.), THE CALCUTTA HIGH COURT HAS HELD THAT 'WHERE ASSESSEE HAD ESTABLISHED IDENTITIES OF COMM ISSION AGENTS TO WHOM IT HAD MADE PAYMENTS, THE FACT THAT SUMMONS SENT TO THEM BY DEPARTMENT COME BACK UNDELIVERED FOUR YEARS LATER WOULD NOT ME AN THAT THEY WERE NON-EXISTENT AT TIME OF PAYMENT. IN THAT CASE, THE HON'BLE HIGH COU RT OBSERVED THAT IN THE ENTIRETY OF THE EVIDENCE, IT CANNOT BE HELD THAT IF A PERSON IS NOT FOUND IN AN ADDRESS AFTER FOUR YEARS, HE IS NON-EXISTENT. THE ASSESSEE HAS DISCHAR GED ITS PRIMARY ONUS AND ESTABLISHED THE IDENTIFIES OF THE SAID TWO COMMISSION AGENTS AN D NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO REBUT THE CASE OF THE ASSE SSEE. ON THE ENTIRETY OF THE EVIDENCE, IT WOULD BE UNREASONABLE TO HOLD THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE IDENTITY OF THE SAID TWO COMMISSION AGENTS AND THE PAYMENTS TO THE SAID COMMISSION AGENTS WERE NOT GENUINE' . SIMILAR IS THE FACTS AND CIRCUMSTANCES OF THE APPE LLANT'S CASE. THERE IS NO FINDING THAT THE EXPENDITURE WAS NOT LAID OUT WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSES AND THAT THE CONDITIONS LAID DOWN UNDER SEC. 37 (1) WERE NOT ITA NO.61/KOL/2014 A.Y. 2008-09 DCIT CIR-10 KOL. VS. M/S MAGNUM CLOTHING (P ) LTD. PAG E 6 FULFILLED. THEREFORE, HAVING REGARD -TO THE FACTS A ND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE REPORTED CASE, I AM OF THE VIEW THAT THE ASSESSING OFFICER W AS NOT JUSTIFIED IN MAKING THE IMPUGNED DISALLOWANCE OF RS.3,58,78,841/-, THE CONS EQUENT ADDITION IS, THEREFORE, DELETED. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOW ED. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFORE U S. 6. BEFORE US LD. DR HEAVILY RELIED ON THE ORDER OF AO WHEREAS LD. AR FOR THE ASSESSEE REITERATED THE SUBMISSIONS THAT WERE MADE BEFORE LD. CIT(A) AND ALSO RELIED ON THE ORDER OF LD. CIT(A). HE FILED LEDGER COPY OF ALL THE PARTIES WHICH ARE PLACED ON RECORD AND DEMONSTRATED THAT IT HAS BEEN DEALING WI TH ALL THE PARTIES IN EARLIER YEAR AS WELL AS IN THE SUBSEQUENT YEAR. THEREFORE, THE DISA LLOWANCE CANNOT BE MADE ON ACCOUNT OF NON IDENTITY OF THE PARTIES AS THE IDENT ITY OF THESE PARTIES HAVE NOT DOUBTED IN OTHER YEARS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE CASE ON HAND, THE AO HAS MADE THE DISALLOWANCE OF THE FOLLOWING EXPENDITURE:- SL. NO. PARTICULARS AMOUNT 1. STITCHING CHARGES 1,73,40,963 2. WASHING AND IRON CHARGES 5,91,146 3. EMBROIDERY CHARGES 30,32,257 4. PROCESSING AND DYEING CHARGES 1,33,69,589 5. FINISHING CHARGES 15,44,890 3,58,78,841/- THE ABOVE EXPENSES WERE DISALLOWED BY AO ON THE GRO UND THAT NOTICE ISSUED U/S. 133(6) OF THE ACT TO THE RESPECTIVE PARTIES WERE EI THER NOT DELIVERED OR NO RESPONSE WAS RECEIVED. HOWEVER, LD. CIT(A) GRANTED RELIEF TO ASSESSEE AFTER HAVING RELIANCE ON THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF MATHER & PLATT (INDIA) LTD. VS. CIT (1987) REPORTED IN 68 ITR 493 (CAL) AND RELEVANT E XTRACT OF THE SAID JUDGMENT IS REPRODUCED BELOW:- ON THE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES , IT APPEARS THAT BY TAKING AN OVERALL VIEW, IT IS FOUND THAT THE ASSESSEE HAD BEEN ENTERI NG INTO TRANSACTIONS IN ITS REGULAR COURSE OF BUSINESS THROUGH COMMISSION AGENTS AND PAYING THE A GENTS' COMMISSION ON THE BASIS OF THE TRANSACTION HAD. IN RESPECT OF COMMISSION PAID TO T HE TWO COMMISSION AGENTS WHICH ARE IN DISPUTE, THE ASSESSEE HAD ESTABLISHED THAT IN 1974 THE ASSESSEE WAS IN CORRESPONDENCE WITH THE SAID AGENTS. THE ASSESSEE HAD ENTERED INTO THE TRANSACTIONS THROUGH THE SAID AGENTS AND THE ASSESSEE HAD PAID COMMISSION TO THE SAID AGENTS , IN ONE CASE BY BANK DRAFT AND IN THE ITA NO.61/KOL/2014 A.Y. 2008-09 DCIT CIR-10 KOL. VS. M/S MAGNUM CLOTHING (P ) LTD. PAG E 7 OTHER CASE BY AN ACCOUNT PAYEE CHEQUE WHICH WAS ENC ASHED THROUGH A BANK ACCOUNT OF THE AGENT. IT STANDS ESTABLISHED THAT AT THE MATERIAL T IME AT LEAST ONE OF THE COMMISSION AGENTS WAS MAINTAINING A BANK ACCOUNT. ON THE ENTIRETY OF THE EVIDENCE, IT CANNOT BE HELD THAT IF A PERSON IS NOT FOUND IN AN ADDRESS AFTER FOUR YEARS, HE IS NON-EXISTENT. THE ASSESSEE HAS DISCHARGED ITS PRIMARY ONUS AND ESTABLISHED THE IDENTITIES OF THE SAID TWO COMMISSI ON AGENTS AND NO EVIDENCE HAD BEEN BROUGHT ON RECORD BY THE REVENUE TO REBUT THE CASE OF THE ASSESSEE. ON THE ENTIRETY OF THE EVIDENCE, IT WOULD BE UNREASONABLE TO HOLD THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE IDENTITY OF THE SAID TWO COMMISSION AGENTS AND THAT PAYMENTS TO THE SAID COMMISSION AGENTS WERE NOT GENUINE. NOW, THE ISSUE BEFORE US ARISES FOR OUR ADJUDICATIO N SO AS TO WHETHER THE EXPENSE WHICH HAVE NOT BEEN CONFIRMED U/S. 133(6) OF THE AC T CAN BE ALLOWED AS DEDUCTION IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. THE UNDISPUTED FACT IS THAT THE AO HAS NOT BROUGHT ANY INFIRMITY IN THE NATURE OF ALL EXPE NSES AS CLAIMED BY ASSESSEE DURING THE YEAR. SIMILARLY, THERE WAS NO ALLEGATION OF THE AO THAT THE EXPENSES WERE UNREASONABLE. THE SOLE REASON FOR THE DISALLOWANCE OF THE EXPENSES WAS THAT THE NOTICES ISSUED U/S 133(6) OF THE ACT WERE UN-SERVED OR WHERE THE NOTICES WERE SERVED BUT THE PARTY FAILED TO RESPOND. THUS, AN INFERENCE CAN BE DRAWN THE DISALLOWANCES WERE MADE ON ACCOUNT OF NON-EXISTENT OF THE PARTY. IN THIS REGARD, WE FIND THAT ALL THE ABOVE PARTIES IN RESPECT OF WHICH DISALLOWANCES WERE MADE BY THE AO WERE OLD PARTIES. FURTHERMORE, THE ASSESSEE HAS DONE ITS BUSINESS TRANSACTIONS WITH THESE PARTIES IN THE EAR LIER YEAR AS WELL AS IN THE SUBSEQUENT YEAR ALSO. IN THOSE YEARS, THE EXISTENCE OF THE PAR TIES HAS NOT BEEN DOUBTED AND ALL THE TRANSACTIONS WERE DULY ACCEPTED BY THE REVENUE. THE DETAILS OF THE TRANSACTIONS WITH ALL THE PARTIES ARE ENCLOSED A PER ANNEXURE-I . FROM THE PERUSAL OF SAID ANNEXURE-I WHICH IS ENCLOSED WITH THE ORDER, WE FIND THAT THE EXISTENCE OF THE PARTIES HAVE BEEN DULY ACCEPTED BY THE REVENUE IN EARLIER YEAR AS WEL L AS IN SUBSEQUENT YEARS. THEREFORE, IN SUCH SITUATION THE DISALLOWANCE CANNOT BE MADE M ERELY ON THE GROUND THAT THE NOTICE U/S. 133(6) OF THE ACT HAVE NOT BEEN SERVED OR PARTIES FAILED TO RESPONSE TO THE NOTICE ISSUED U/S. 133(6) OF THE ACT. BESIDES THE A BOVE, WE ALSO FIND THAT THE ASSESSEE HAS CLAIMED TO HAVE MADE PAYMENT TO ALL THE ABOVE P ARTIES THROUGH BAKING CHANNEL AND AO HAS NOT DOUBTED THE GENUINENESS OF THE SAME. THU S, IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE EXPENSE CLAIMED BY ASSESSEE CA NNOT BE DISALLOWED MERELY DUE TO NON SERVICE / NON RESPONSE OF THE NOTICE ISSUED U/S . 133(6) OF THE ACT. WHILE DOING SO, ITA NO.61/KOL/2014 A.Y. 2008-09 DCIT CIR-10 KOL. VS. M/S MAGNUM CLOTHING (P ) LTD. PAG E 8 WE ALSO FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MATHER & PLATT (INDIA) LTD. (SUPRA) . IN VIEW OF THIS PROPOSITION, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) AND WE UPHOLD THE SAME. HENCE, THIS GROUND OF REVENUES APPEAL IS DIS MISSED. 8. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 26/10/2017 SD/- SD/- (% ') ( ') (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP-SR.PS ) - 26/10/2017 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, CIRCLE-10, P-7, CHOWRINGHEE SQUARE , 3 RD FL, KOLKATA-69 2. /RESPONDENT-M/S MAGNUM CLOTHING (P) LTD., 133, CANI NG STREET, KOLKATA-01 3. , - / CONCERNED CIT 4. - - / CIT (A) 5. . %%, , , / DR, ITAT, KOLKATA 6. 2 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO ,,