ITO,Ward-7(1), Kolkata, Kolkata V. M/s Hitech Visual Channel Pvl. Ltd., Kolkata

ITA 624/KOL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4867 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 04-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 18-04-2012
• Court: TRIBUNAL
• Department Lawyers: S S ALAM
• Assessee Lawyers: A K UPADHYAY
• Keywords: Business expenditure; Additional evidence; Assessment record; Capital expenditure
• Section: 133(6); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI P.M.JAGTAP, AM & SRI N.V.VA SUDEVAN, JM ] I.T.A NO. 624/KOL/201 2 ASSESSMENT YEAR : 2008-0 9 I.T.O., WARD-7(1), -VS.- M/S.HITECH VISU AL CHANNEL PVT. LTD. KOLKATA KOLKATA [PAN : AABCH7580A] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : S.S.ALAM, JCIT, SR .DR FOR THE RESPONDENT : SHRI A.K.UPADHYAY, ADVO CATE DATE OF HEARING : 04.04.2016. DATE OF PRONOUNCEMENT : 11.05.2016. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 23.01.2012 OF CIT(A)- VIII, KOLKATA, RELATING TO AY 2008-09. 2. THERE IS A DELAY OF ABOUT 4 DAYS IN FILING APPE AL BY THE REVENUE. THE SAME HAS BEEN EXPLAINED IN AN AFFIDAVIT FILED BEFORE US AS OWING TO INABILITY TO TRACE THE ASSESSMENT RECORDS. AFTER CONSIDERING THE REASONS GIVEN IN TH E AFFIDAVIT, WE ARE SATISFIED THAT THE DELAY IN FILING THE APPEAL WAS DUE TO REASONABLE AN D SUFFICIENT CAUSE. ACCORDINGLY THE DELAY IN FILING THE APPEAL IS CONDONED. 3. THE ONLY GROUND OF APPEAL RAISED BY THE REVENUE IN THIS APPEAL IS THAT THE CIT(A) ERRED IN LAW AND FACTS BY DELETING THE ADDITION OF RS.2,35,97,622/- MADE BY THE AO. THE ASSESSEE IS A COMPANY. THE ASSESSEE PROVIDES CABLE TV SERVICES TO SUBSCRIBERS. ASSESSEE OBTAINS CABLE TV SIGNALS FROM MULTI SYSTEM OPERATOR M/S.WIRE AND WIRELESS (INDIA) PVT. LTD. (WWIL). MULTI-SYSTEM OPERATOR (MSO) MEANS A CABLE OPERATOR WHO RECEIVES A PROGRAMMING SERVICE FROM A BROADCAST ER AND RE-TRANSMITS THE SAME DIRECTLY OR THROUGH ONE OR MORE LOCAL CABLE OPERATO RS. BROADCASTER ARE PERSONS PROVIDING PROGRAMMING SERVICES. 2 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 2 4. WWIL APART FROM ACTING AS MSO IS ALSO ENGAGED I N THE BUSINESS OF PRODUCING AND OR ACQUIRING VARIOUS TELEVISIONS PROGRAMS AND MOTION P ICTURES. WWIL WANTED TO MARKET AND SELL THE TELEVISION PROGRAMS AND MOTION PICTURE PRODUCED BY IT TO VARIOUS BROADCASTERS. THE ASSESSEE REPRESENTED TO WWIL THAT IT HAS GOOD CONTACTS AND EXPOSURE IN THE BROADCASTING SECTOR AND WAS PROVIDING SERVIC ES PERTAINING TO LIAISON WITH BROADCASTERS. WWIL AND THE ASSESSEE HAVE ENTERED I NTO AN AGREEMENT DATED 1.4.2007 WHEREBY WWIL APPOINTED THE ASSESSEE TO RENDER LIAIS ON SERVICES BY IDENTIFYING AND ASCERTAINING REQUIREMENT OF BROADCASTERS FOR VARIOU S PROGRAMS, NEGOTIATE AND SETTLE FEE WITH BROADCASTERS, ARRANGE FOR EXECUTION OF REQUIRS ITE AGREEMENT WITH BROADCASTERS AND GENERALLY LIAISON AND CO-ORDINATE WITH BROADCASTERS . IN CONSIDERATION OF THE ABOVE SERVICES TO BE RENDERED BY THE ASSESSEE, WWIL AGREE D TO PAY 50% OF THE CONSIDERATION THAT IT RECEIVES FROM BROADCASTERS AS CONSIDERATION THAT THE ASSESSEE MIGHT RENDER. 5. THE ASSESEE RECEIVED A SUM OF RS.2,52,44,35 1/- AS LIAISON & CONSULTANCY CHARGES FROM WWIL. THE ASSESSEE CLAIMED THAT IT OUTSOURCED THE JOB OF DOING LIAISON BY APPOINTING THE FOLLOWING FIVE PERSONS AS SUB AGENTS , NAMELY 1. VASHNAVI TRADE (P) LTD.. 2. BMA STAINLESS LTD: 3. C P RE-ROLLERS LTD. 4. MAXPRO TRACON PVT. LTD 5. STATT INVESTMENT & SERVICES P. LTD. ACCORDING TO THE ASSESSEE, THE ABOVE PERSONS RENDER ED LIAISON SERVICES. THE ASSESSEE FURTHER SUBMITTED THAT FROM AND OUT OF THE COMMISSI ON RECEIVED FROM WWIL, THE ASSESSEE PAID THE FOLLOWING AMOUNT AS CONSULTANCY & LIAISON CHARGES TO THEIR SUB AGENTS 1. VAISHNAVI TRADE (P) LTD. RS. 5,4 7,707 2. BMA STAINLESS LTD RS. 44,74,961 3. C P RE-ROLLERS LTD. RS. 1 ,82,44,954 3 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 3 4. MAXPRO TRACON PVT. LTD. RS. 1,25 ,000 5. STATT INVESTMENT & SERVICES P. LTD RS. 2,05,000 TOTAL RS. 2,35,97,622 6. THE ASSESSEE CLAIMED THE AFORESAID PAYMENT AS D EDUCTION WHILE COMPUTING ITS INCOME FROM BUSINESS. THE ASSESSEE CLAIMED THAT IT HAD MADE PAYMENTS TO ALL THESE PERSONS BY ACCOUNT PAYEE CHEQUES AND AFTER DULY DED UCTING TAX AT SOURCE. IT WAS FURTHER CLAIMED THAT THE AFORESAID PERSONS TO WHOM IT PAID SERVICES CHARGES ARE INCOME TAX PAYEE WITH PERMANENT ACCOUNT NUMBERS. THE DETAILS O F THE RECIPIENTS WITH COMPLETE ADDRESS AND PAN, MODE OF PAYMENT AND DETAILS OF TDS THEREON WERE PROVIDED TO THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS. 7. UNDER SEC.37(1) OF THE INCOME TAX ACT, 1961(AC T), ANY EXPENDITURE (NOT BEING EXPENDITURE OF THE NATURE DESCRIBED IN SECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR PERSONAL EXPENSES OF THE ASS ESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OR PROFESSION SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PRO FITS AND GAINS OF BUSINESS OR PROFESSION. EXPLANATION-1 TO SEC.37(1) OF THE ACT PROVIDES THAT ANY EXPENDITURE INCURRED BY AN ASSESSEE FOR ANY PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW SHALL NOT BE DEEMED TO HAVE BEEN INCURRED FOR T HE PURPOSE OF BUSINESS OR PROFESSION AND NO DEDUCTION OR ALLOWANCE SHALL BE MADE IN RESP ECT OF SUCH EXPENDITURE. THE LAW BY NOW IS WELL SETTLED THAT TO CLAIM COMMISSION EXP ENDITURE AS AN ALLOWABLE DEDUCTION U/S.37(1) OF THE ACT, THE ASSESSEE HAS TO PROVE THA T SERVICES WERE RENDERED BY THE RECIPIENT OF THE COMMISSION AND THAT THE PAYMENT OF SUCH COMMISSION SHOULD NOT FOR PURPOSE WHICH IS AN OFFENCE OR WHICH IS PROHIBITED BY LAW. 8. THE ASSESSING OFFICER NOTICED THAT THE C.P.RERO LLERS LTD., AND BMA STAINLESS LTD., WERE IN THE BUSINESS OF STEEL AND DOUBTED THEIR EXP ERTISE IN RENDERING LIAISON WORK FOR MARKETING TELEVISION PROGRAMS TO TELEVISION BROADCA STERS. SIMILARLY THERE WAS NO EVIDENCE WHATSOEVER TO SHOW THAT M/S.VAISHNAVI TRAD E PVT.LTD., ANOTHER RECIPIENT OF 4 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 4 COMMISSION FROM THE ASSESSEE HAD SUCH EXPERTISE TO DO LIAISON WORK FOR MARKETING PROGRAMS TO TELEVISION BROADCASTERS. 9. THE AO ISSUED NOTICES U/S.133(6) OF THE ACT TO C.P.REROLLERS LTD., CALLING UPON THEM TO FURNISH CERTAIN INFORMATION. ONE OF INFORMATION SOUGHT FOR BY THE AO WAS THE NAME AND DESIGNATION OF THE PERSON WHO LIAISED ON BEHALF OF C P REROLLERS LTD., AND THE PARTIES WITH WHOM THEY CONCLUDED BUSINESS FOR THE A SSESSEE. IN REPLY TO THE SAID NOTICE, C.P.REROLLERS LTD., SENT A REPLY DATED 22.8.2010 WH EREIN THEY TOOK A STAND THAT ONE MR.MAHANDRA MAURYA, ACCOUNTS MANAGER WAS LOOKING AF TER THE BUSINESS WITH THE ASSESSEE AND WAS DOING LIAISON WORK. THE AO WAS NO T SATISFIED WITH THE SAID REPLY AND WANTED TO EXAMINE MR.MAHENDRA MAURYA. ACCORDINGLY THE AO ISSUED SUMMONS U/S.131 OF THE ACT FOR APPEARANCE BEFORE HIM AND FO R RECORDING HIS STATEMENT ON OATH. CPREROLLERS LTD., SENT A REPLY TO THE SAID SUMMONS TAKING A STAND THAT MR.MAHENDRA MAURYA HAD ALREADY LEFT THEIR SERVICES AND THAT ONE MR.MRITYUNJOY DUTTA, ACCOUNTANT WILL APPEAR IN RESPONSE TO THE SUMMONS U/S.131 OF T HE ACT. 10. THE AO WAS NOT SATISFIED WITH THE AFORESAID RE PLY OF CPREROLLERS LTD., AND HE THEREFORE ADDRESSED ANOTHER NOTICE U/S.133(6) OF TH E ACT, CALLING FOR THE FOLLOWING DETAILS: I.FURNISH THE NAME OF EMPLOYEE WITH HIS PAN WHO LI AISE WITH BROADCASTERS WHO PLACED ORDER WITH WWIL ON ACCOUNT OF YOUR EFFORT. II. FURNISH THE NAME OF THE EMPLOYEES OF THE BROADC ASTERS WITH WHOM YOUR EMPLOYEE MET FOR DISCUSSION REGARDING PLACING ORDER WITH WWIL; III. TELEPHONE COMPANY PROVIDES THE CALLS DETAILS-I N THE .BILL. YOU CAN ALSO GET A STATEMENT FROM THEM ABOUT THE CALLS MADE. THEREFORE , IN SUPPORT OF YOUR CLAIM THAT YOU HAVE LIAISE WITH BROADCASTERS .FURNISH THE TELEPHONE ;RECORD AS A PROOF THAT YOUR EMPLOYEE HAD MADE CALLS TO THE ,EMPLOYEES , OF THE BROADCASTER, WHOSE NAME YOU HAVE ANSWERED AS PER QUESTION NO.2 ;' IV, LIAISON WORK REQUIRES TRAVEL, MORE SO WHEN THE BROADCASTERS ARE BASED IN OTHER CITIES. THEREFORE FURNISH THE DETAILS OF TOUR S MADE BY YOUR EMPLOYEE TO CITIES OUTSIDE YOUR PLACE OF WORK IN FOLLOWING FORM AT V. PLACE VISITED MODE OF VISIT (RAIL/AIR/BY CAR DATE OF VISIT PLACE OF STAY WITH COMPLETE 5 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 5 ADDRESS IN SUPPORT OF YOUR ANSWER, PROVIDE EVIDENCE IN FORM OF HOTEL BILLS , AIR TICKET OR TRAIN TICKET ETC. X. NATURALLY BROADCASTERS MUST HAVE WRITTEN YOU SOM ETIME REGARDING THE NEGATION OR EVE ORDER PLACEMENT .FURNISH COPY OF, A NY LETTER WRITTEN BY BROADCASTER TO YOU? XI. FURNISH COPY OF ORDER PLACEMENT LETTER- WRITTEN BY BROADCASTER WITH WHOM YOUR EMPLOYEE LIAISE. XII. HOW DID YOU KNOW ABOUT THE BUSINESS YOU GOT FR OM CHANNELS? : XIII. HOW DID THE WWIL CAME TO KNOW WHICH CHANNEL . IS GOING TO TAKE THEIR SERVICES. XIV. HOW DID YOU KNOW HOW MUCH MONEY OR RATE IS TO BE. PAID BY THE CHANNELS TO WWIL? XV. WHO COLLECTED THE PAYMENTS - YOU HI 'I'ECH OR WWIL? XVI. HOW MUCH BUSINESS DID YOU DO IN FOUR YEARS BEF ORE AND-AFTER THE' RELEVANT IT 2007 -08? FURNISH EVIDENCE IN SUPPORT OF YOUR CLAIM XVII. FURNISH EVIDENCE IN SUPPORT OF YOUR CLAIM :TH AT YOU HAVE QUALIFICATION EXPERIENCE AND REQUIRED SKILL 'FOR PROCURING A BUSI NESS WHICH COMPLETELY DIFFERENT TO YOUR TRADITIONAL BUSINESS WHICH IS STE EL. 11. CPREROLLERS LTD., SENT REPLY TO THE SAID LETTE R IN WHICH THE MODUS OPERANDI BY WHICH PROGRAMS ARE SELECTED BY BROADCASTERS WAS GIVEN BUT THE IMPORTANT DETAIL REGARDING PERSONS WHO LIAISED AND THE OTHER QUERIES RAISED BY THE AO AS ABOVE REMAINED UNANSWERED. 12. A NOTICE U/S.133(6) OF THE ACT WAS ISSUED TO B MA STAINLESS LTD., CALLING UPON THEM TO FURNISH CERTAIN INFORMATION. ONE OF INFORMATION SOUGHT FOR BY THE AO WAS THE NAME AND DESIGNATION OF THE PERSON WHO LIAISED ON BEHALF OF BMA STAINLESS LTD., AND THE PARTIES WITH WHOM THEY CONCLUDED BUSINESS FOR THE A SSESSEE. THERE WAS NO COMPLIANCE TO THIS NOTICE BY BMA STAINLESS LTD. A FURTHER NOT ICE U/S.133(6) OF THE ACT TOGETHER WITH A QUESTIONNAIRE RAISING THE SAME QUESTION SET OUT IN THE EARLIER PARAGRAPH OF THIS ORDER WAS SENT TO THIS PERSON BY THE AO. BMA STAIN LESS LTD., SENT A REPLY DATED 15.12.2010 WHICH DID NOT ANSWER THE SPECIFIC QUERY RAISED BY THE AO IN AS MUCH AS THE 6 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 6 PERSON WHO LIAISED ON BEHALF OF BMA STAINLESS LTD., AND THE PARTIES WITH WHOM THEY CONCLUDED BUSINESS FOR THE ASSESSEE REMAINED UNANSW ERED. IN RESPONSE TO A SUMMON U/S.131 OF THE ACT, BMA STAINLESS STEEL LTD., TOOK A STAND THAT THE PERSON WHO HAD LIAISED HAD LEFT THE SERVICES. 13. AS FAR AS M/S.VAISHNAVI TRADE PVT.LTD. IS CONC ERNED A NOTICE U/S.133(6) OF THE ACT WAS SENT BY THE AO CALLING FOR SOME PARTICULARS. I N REPLY THEY SUBMITTED THAT ONE MR.DILIP KUMAR SHETH HAD LIAISED ON BEHALF OF M/S.V AISHNAVI TRADE PVT.LTD., WITH BROADCASTERS ON BEHALF OF THE ASSESSEE TO MARKET PR OGRAMS OF WWIL BUT THE SAID PERSON WAS NO MORE. 14. IN THIS STATE OF AFFAIRS, THE AO THEN ADDRESSE D A NOTICE U/S.133(6) OF THE ACT TO ALL THE BROADCASTERS WHO PAID CONSIDERATION TO WWIL AND 50% OF WHICH WAS GIVEN BY WWIL AS LIAISON FEE TO THE ASSESSEE. THREE BROADCA STERS TV TODAY NETWORK, ZOOM ENTERTAINMENT AND VIACOM 18 HAD SENT REPLIES IN WHI CH THEY MAINTAINED THAT THEY DID NOT NEGOTIATE WITH ANY OF THE THREE COMPANIES REFER RED TO ABOVE AND THAT ONE MR. SURESH SETHIA OF WWIL WAS NEGOTIATING WITH THEM. 15. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE FO R DEDUCTION OF A SUM OF RS.2,35,97,622/- BEING COMMISSION PAID TO THE SUB-A GENTS. THE FOLLOWING WERE THE CONCLUSIONS DRAWN BY THE AO: 12.QUESTIONABLE CONDUCT OF THE LIAISING PERSONS .: BMA STAINLESS LTD APART FROM THE COMPLETE FAILURE TO BRING A ' SINGLE PIECE; OF EVIDENCE .IN SUPPORT OF ITS CLAIM THAT IT HAD DONE LIAISON JOB, FOLLOWING SERIO US QUESTIONS ARISES : (I) BMA STAINLESS LTD. COULD NOT EVEN SAY WHO ACTUA LLY PERFORMED THE LIAISING JOB. IT SIMPLY DID NOT ANSWER THE QUESTION' NO.4 OF NOTICE U/S 133(6) DT. 4/8/2010 .WHICH WAS 'NAME OF THE EMPLOYEE AND HIS DESIGNATION IN SOUR C OMPANY WHO LIAISON ON BEHALF OF, YOU FOR HTVCPL'. -LETTER OF ASSESSEE [ANNEX VII] (II) WHEN SUMMON U/S131 WAS SERVED ON BMA, IT DID N OT APPEAR BUT SUBMITTED A LETTER DT 09/12/22010 IN WHICH STATES: IN THIS CONNECTION, WE WOULD FURTHER LIKE TO INFORM YOU THAT THE PERSONS WHO HAS DEALT THIS MATTER HAS ALREADY LEFT .OUT ORGANIZATION [ ANNEX III] 7 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 7 SO, A COMPANY CLAIMING' TO LIAISON SERVICE FAILED EVEN NAME ITS EMPLOYEE WHO HELPED IT EARN INCOME, FROM HTVCL AND WHEN IT WAS TIME TO BR ING TRUTH ON RECORD, IT INFORMS THAT SUCH PERSON HAS LEFT THE JOB. CONDUCT OF C.P. REROLLERS LTD:: I. G.P.REROLLER REPLIED TO 133(6) NOTICE VIDE. ITS LETTER DT, 22/8/2010 AND AGAINST QUESTION NO.4 REGARDING THE EMPLOYEE WHO DID LIAISON JOB, TH E SAID LETTER INFORM AS UNDER. ' MR. MAHENDRA MAURYA, AS LOOKING THE BUSINESS WITH M /S. HVCPL AND HE IS WORKING AS MANAGER ACCOUNTS AS WELL AS LIAISON WORKS. [ANNEXUR E I] II. AFTER 131 NOTICE WAS SERVED ON ASSESSEE; AND MR . MAHENDRA MAURYA WAS CALLED FOR EXAMINATION UNDER OATH, A LETTER DT. 11/12/2010 WAS SUBMITTED ON13/12/2010 WHICH SAYS IN LAST PARA ASUNDER: 'IN THIS CONNECTION WE WOULD HAVE BY INFORM YOU THA T THE PERSONS WHO HAS WORKED IN THIS MATTER HAS ALREADY LEFT OUR COMPANY. SO, IN THIS CASE ALSO, SIMILAR TO BMA STEEL, PERSON S RESPONSIBLE FOR LIAISON JOB HAS LEFT THE COMPANY [ANNEX II] IS IT COINCIDENCE THAT BOTH THE PERSONS WERE WITH T HEM ONLY THREE-MONTHS BACK I.E. IN AUGUST WHEN THEY REPLIED NOTICE U/S 133(6)AND BOTH QUIT THE EMPLOYMENT AT THE TIME OF STATING TRUTH. ' ON THE AFORESAID GROUND, I CONCLUDE THAT THE CLAIM OF ASSESSEE THAT IT INCURRED EXPENDITURE IN FORM OF LIAISING AND CONSULTANCY CHARGES PAID T O AFORESAID THREE PERSONS ARE BOGUS AND SHAM. .IT NEVER HAPPENED ALTHOUGH, ASSESSEE TRIES T O GARB IT AS EXPENSE BY DEDUCTING TAX AND PAYMENT BY CHEQUE. THE WORK FOR WHICH WWIL HAS PAID TO ASSESSEE WAS DONE BY ASSESSEE ITSELF. I THEREFORE DISALLOW EXPENSE OF RS .2,35,97,622 DEBITED TO P & L ACCOUNT UNDER THE HEAD 'LIAISING & CONSULTANCY CHARGES. 16. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A). NO ADDITIONAL EVIDENCE WHATSOEVER WAS PRODUCED BY T HE ASSESSEE BEFORE THE CIT(A). BASED ON MATERIAL ALREADY AVAILABLE ON RECORD SUBMI SSIONS WERE MADE BY THE ASSESSEE THAT THE EXPENDITURE IN QUESTION OUGHT NOT TO HAVE BEEN DISALLOWED BY THE AO. THE CIT(A) AGREED WITH THE CONTENTION OF THE ASSESSEE T HAT THE EXPENDITURE IN QUESTION WAS TO ALLOWED AS BUSINESS EXPENDITURE. THE FOLLOWING WERE THE RELEVANT OBSERVATIONS OF THE CIT(A): AFTER CAREFULLY GOING THROUGH THE DETAILED SUBMIS SION OF THE AR OF THE APPELLANT, PERUSING THE ASSESSMENT ORDER INCLUDING THE EVIDENC ES AND DOCUMENTS PRODUCED FURNISHED BEFORE THE AO' AND ME AND THE MATERIALS AVAILABLE ON RECORDS, I AM DECIDING THE ISSUE IN FAVOUR OF THE APPELLANT DUE, THE FOLLOWING REASONS: (I) THE AO HAD NOT QUESTIONED THE AUTHENTICITY OF W ORK AND MERELY HE OPINED THAT BASED ON HIS JUDGMENT THE LIAISON JOB HAS BEEN DONE BY AP PELLANT HIMSELF WHEREAS, IT WAS STATED 8 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 8 TO HIM THAT THE APPELLANT HAS NO MARKETING SET UP, PROPER MANPOWER STRENGTH OR NET WORK TO DO THE JOB. THE APPELLANT DUE TO ITS CONNECTION WITH WWIL AS CABLE OPERATOR, HAD OBTAINED THE WORK. HOWEVER DUE TO ITS LACK OF MARKE TING STRENGTH AND ADEQUATE SET UP OFF LOADED THE JOBS TO ASSIGNS. (IL) THE APPELLANT HAD APPOINTED SUB AGENTS OR ASS IGNS, NAMELY BMA STAINLESS LTD, C.P.RE-ROLLERS LTD, VAISHNAVI TRADERS PVT LTD, MAX PRO TRACON (P) LTD AND STATT INVESTMENT & SECURITAS (P) LTD WITH THE PERMISSION AND IN DUE KNOW EDGE OF THE WIRE AND WIRELESS INDIA LTD. ONLY AS MENTIONED IN THE LETTER OF WIRE AND WIRELESS INDIA LTD , COPY OF WHICH WAS ALSO GIVEN TO AO DURING THE COURSE OF HEARING. THE AO HAS NOT COMMENTED ON IT OR NOT TAKEN INTO COGNIZANCE. III) THE ASSESSING OFFICER DID NOT PROVIDE THE PROP ER OPPORTUNITY TO REPRESENT THE CASE UNDER VARIOUS PLEAS, AS APPEAR FROM THE LETTERS FIL ED BY THE PARTIES. DESPITE OF THE FACT, THE APPELLANT SOUGHT THE COOPERATION OF SUCH PAYEE TO F ILE THEIR REPLY AND SUPPORTING DOCUMENTS. IV)THE AO DREW THE CONCLUSION WRONG OR MISCONCEIVED REASONING WITH PROPERLY APPRECIATING THE FACTS AND ONLY BY ANALYZING THE RE PLIES FILED BY THE ASSIGNS WHICH CAN BE OBSERVED FROM THE COMMENTS IN THE ASSESSMENT ORDER BY COMPARING THE REPLIES SUBMITTED BY THE ASSIGNS. V) THE AO FAILED TO APPRECIATE THE FACT THAT WITH E FFECT FROM 1 ST APRIL 2008 FROM THE SUBSEQUENT PERIODS, WWIL HAD DIRECTLY APPOINTED BMA STAINLESS LTD AS ITS LIAISON AGENT IN PLACE OF THE APPELLANT. THUS THE QUESTION ON THE CAPABILITY OF THE SAID PARTY TO WORK AS ASSIGN OF THE APPELLANT DOES NOT ARISE. MORE SO WHE N THE AUTHENTICITY OF THE JOB IS NOT IN DOUBT. (VI) . THE AO DID NOT ENQUIRE ABOUT THE PAYMENT WIT H OTHER TWO PARTIES, NAMELY M/S. MAXPRO TRACON (P) LTD. AND . STATT INVESTMENT & SER VICES (P) LTD. HOWEVER HE ADDED TO THE TOTAL INCOME, THE AMOUNT OF LIAISON FEES PAID TO THESE TWO PARTIES TOO. (VII) THE APPELLANT DECLARED AND CONFIRMED ALL THE SUPPORTING AND DOCUMENTS RELIED UPON HAVE BEEN DULY FILED AND DISCUSSED BEFORE THE AO. (VIII) ALTERNATIVELY, IT IS ARGUED THAT THE APPELLA NT HAS NOT MADE ANY EXPENDITURE' TO EARN THAT INCOME SAVE AND EXCEPT THE EXPENSES ADMISSIBIL ITY THEREOF ARE IN DISPUTE. THE EXPENSES ARE THE PAYMENTS .TO SUCH ASSIGNS AND COMM ISSION .PAYMENT TO THE SUBAGENTS, WHO ARRANGED THE ASSIGNMENT JOB FOR THE APPELLANT. (IX) IT HAS NOT BEEN DENIED THAT THE APPELLANT HAD EARNED SUCH INCOME AND THE PRINCIPAL HAS PAID THE SUM ON THE EXECUTION OF THE JOB ONLY. IT CANNOT BE DENIED THAT WWIL HAD APPOINTED THE APPELLANT TO DO LIAISON JOB WITH THE BROADCASTERS. IT CAN CONVERSELY. STATED THAT THE LIAISON JOB HAS TAKEN PLACE. THE AO HAD NO DIFFERENT VIEW ON THIS. THE POINT OF DISPUTE IS WHO DID THIS JOB. WHETHER APPELLANT ITSE LF DID THE SAME JOB OR IT ASSIGNED. TO ANY THIRD PARTIES. THE APPELLANT HAD NOT CLAIMED ANY EX PENDITURE THAN THE EXPENDITURES IN DISPUTE. IF IT IS ASSUMED THAT APPELLANT HAD EXECUT ED THE JOB, THEN THERE MUST BE SOME EXPENDITURE ON SALARY, TELEPHONE, TRAVELLING OR CO NVEYANCE. NONE OF SUCH EXPENSES IS DEBITED TO THE AUDITED ANNUAL ACCOUNTS OF THE APPEL LANT. ON. THE OTHER HAND, THE PAYEES OF THE LIAISON FEES HAD ADMITTED THE TRANSACTIONS AND RECEIPT OF SUCH FEES FROM THE APPELLANT. (X)THE TRANSACTIONS RELATING TO THE PAYMENT OF LIAI SING FEES TOOK PLACE THROUGH PROPER BANKING CHANNEL. THE PAYEES ARE INCOME TAX ASSESSE S AND THEIR TOTAL INCOME INCLUDES SUCH 9 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 9 FEE, WHICH IS SUBJECT TO TAX. THE ACCOUNTS OF THE RECIPIENTS ARE .DULY CHECKED AND AUDITED BY THE STATUTORY AUDITORS UNDER THE COMPANIES ACT A ND INCOME TAX ACT. (XI) SUCH PAYMENTS OF LIAISING FEES WERE SUBJECT TO PROPER DEDUCTION OF TAX AT SOURCE AND SUCH COMPLIANCES HAVE BEEN DULY MADE. THE COPIES OF THE RESPECTIVE INCOME TAX RECORDS AND AUDITED ANNUAL ACCOUNTS OF THE ASSIGNS ARE FUR NISHED. (XII) IN VIEW OF THE ABOVE OBSERVATION/FINDINGS AND DISCUSSION, THE CLAIM OF THE APPELLANT THAT IT HAD APPOINTED THE ASSIGNS TO DO THE JOB IN ITS BEHALF AND HAS NOT DONE THE JOB BY ITSELF CANNOT BE DENIED. KEEPING IN VIEW THE ABOVE, CONSIDERING THE FACTS AN D CIRCUMSTANCES OF THE CASE AND PERUSING THE IMPUGNED ASSESSMENT ORDER AND OTHER MA TERIALS ON RECORDS, I AM OF THE OPINION THAT DISALLOWANCE OF RS.2,35,97,622/- AND A DDITION MADE THEREOF TO THE TOTAL INCOME OF THE APPELLANT TO DELETE THE ADDITION SO M ADE OF RS.2,35,97,622/- ON ACCOUNT OF DISALLOWANCES OF LIAISING FEES TO THE SUB-AGENTS. 17. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVE NUE IS IN APPEAL BEFORE THE TRIBUNAL. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED DR AND THE LEARNED COUNSEL FOR THE ASSESSEE. THE LEARNED DR POINTED OUT THE ENQUIRIES MADE BY THE AO AND SUBMITTED THAT THERE WAS COMPLETE FAILURE ON THE PART OF THE ASSES SEE TO LET IN ANY EVIDENCE TO PROVE THAT SERVICES WERE RENDERED BY THE PERSONS TO WHOM THE ASSESSEE MADE PAYMENT OF COMMISSION. IT WAS HIS SUBMISSION THAT IN THE ABSE NCE OF ANY EVIDENCE TO SHOW THAT SERVICES WERE IN FACT RENDERED BY THE PERSON TO WHO M COMMISSION WAS PAID, THE DEDUCTION CLAIMED CANNOT BE ALLOWED. IT WAS HIS SU BMISSION THAT THE CIT(A) HAD IGNORED THIS VITAL REQUIREMENT OF LAW AND HAS PROCE EDED TO GIVE RELIEF TO THE ASSESSEE BASED ON IRRELEVANT CONSIDERATIONS. HE PRAYED THAT THE ORDER OF THE AO BE RESORTED. 18. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATE D SUBMISSIONS AS WAS MADE BEFORE THE CIT(A) AND RELIED ON THE ORDER OF THE CIT(A). IN P ARTICULAR IT WAS SUBMITTED BY HIM THAT OUT OF THE FIVE PERSONS TO WHOM COMMISSION WAS PAID BY THE ASSESSEE, ENQUIRES WERE CONDUCTED BY THE AO ONLY FROM 3 PERSONS AND THERE W AS NO JUSTIFICATION FOR DISALLOWANCE OF COMMISSION PAID TO THE OTHER TWO PE RSONS. 19. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. AS WE HAVE ALREADY OBSERVED THE BURDEN IS ON THE ASSESSEE TO P ROVE THAT SERVICES WERE INDEED RENDERED BY THE PERSONS TO WHOM COMMISSION WAS PAID . THE ASSESSEE HAS NOT LET IN ANY EVIDENCE TO SHOW THAT THE PERSONS TO WHOM IT PAID C OMMISSION IN FACT RENDERED SERVICES. 10 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 10 FROM THE ENQUIRES CONDUCTED BY THE AO AND THE REPLI ES GIVEN BY CP REROLLERS LTD., BMA STAINLESS LTD., AND VAISHNAVI TRADE PVT.LTD., I T IS CLEAR THAT THEY WERE NOT ABLE TO GIVE EVEN THE NAMES OF THE PERSON OF THE BROADCASTE RS WITH WHOM THEY LIAISED AND THE PERSON WHO LIAISED FROM THEIR ORGANIZATION. NONE O F THE REASONS GIVEN BY THE CIT(A) FOR COMING TO THE CONCLUSION THAT THE EXPENDITURE O N ACCOUNT OF PAYMENT OF COMMISSION WAS TO BE ALLOWED AS A DEDUCTION, ARE SUSTAINABLE. 20. THE REASONS GIVEN BY THE CIT(A) AND THE SUBMIS SIONS MADE ON BEHALF OF THE REVENUE ARE GIVEN IN THE CHART GIVEN BELOW: SL.NO. REASONS OF LD CIT(A) WHY REASON IS NOT ACCEPTABLE? I) I) THE AO HAD NOT QUESTIONED THE AUTHENTICITY OF WORK AND MERELY HE OPINED THAT BASED ON HIS JUDGMENT THE LIAISON JOB HAS BEEN DONE BY APPELLANT HIMSELF. WHEREAS, IT WAS STATED TO HIM THAT THE APPELLANT HAS NO MARKETING SETUP, PROPER MANPOWER STRENGTH OR NET WORK TO DO THE JOB. THE APPELLANT DUE TO ITS CONNECTION WITH WWIL AS CABLE OPERATOR, HAD OBTAINED THE WORK. HOWEVER DUE TO ITS LACK OF MARKETING STRENGTH AND ADEQUATE SET UP OFF LOADED THE JOBS TO ASSIGNS. THE A.O NEVER QUESTION THE AUTHENTICITY OF THE LIAISON JOB BY ASSESSEE . IN FACT THERE IS EVIDENCE OF RECORD THAT ONLY ASSESSEE HAD DONE THE LIAISON JOB. THIS IS STATED BY THE BROADCASTERS WHO PAID ,THE AMOUNT. SO, LD CIT(A) WRONGLY ASSUMED THAT THE ASSESSEE HAS NO ADEQUATE SET UP. 2. II) THE APPELLANT HAD APPOINTED SUB AGENTS OR ASSIGNS, NAMELY BMA STAINLESS LTD, C P RE-ROLLERS LTD, VAISHNAVI TRADERS PVT LTD, MAX PRO TRACON PVT LTD AND STATT INVESTMENT & SECURITIES PVT LTD WITH THE PERMISSION AND IN DUE KNOWLEDGE OF THE WIRE AND FIRELESS INDIA LTD ONLY AS MENTIONED M THE LETTER OF WIRE AND WIRELESS INDIA LTD, COPY OF WHICH IS ALSO GIVEN TO THE AO- DURING THE COURSE OF HEARING. THE AO HAS NOT COMMENTED ON IT OR NOT IT IS SURPRISING THAT LD CIT(A) HAS RAISED SUCH QUESTION IN FAVOUR OF ASSESSEE DESPITE THE FACT THAT A.O HAS ON THE BASIS OR THE EVIDENCE GATHERED HAS CONCLUDED THAT THE THOSE PARTIES CLAIM OF DOING ANY LIAISON. JOB IS NOT CORRECT, NOT COMMENTING ON THE FAKE AGREEMENTS, DOES NOT BECOME A PROOF OF JOB DONE BY PARTIES. WHERE IS NOT QUESTIONING THE AGREEMENT ARISES? 11 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 11 TAKEN INTO COGNIZANCE. III) THE ASSESSING OFFICER DID NOT PROVIDE THE PROPER OPPORTUNITY TO REPRESENT THE CASE UNDER VARIOUS PLEAS, AS APPEAR FROM THE LETTERS FILED BY THE PARTIES. DESPITE OF THE FAD, THE APPELLANT SOUGHT THE CO- OPERATION OF SUCH PAYEE TO FILE THEIR REPLY AND SUPPORTING DOCUMENTS. THIS IS FACTUALLY INCORRECT. BMA STAINLESS RECEIVED THE NOTICE ON 23/1112010. THEY PRAYED FOR TIME VIDE ITS LETTER DT 24111/2010 ON THE GROUND THAT CONCERNED PERSON ,IS OUT OF STATION. THE TIME WAS ALLOTTED ON 06/12/2010 . NO BODY APPEARED ON THE SAID DATE. ON 10/12/2010, BMA WRITES WE. WOULD LIKE TO INFORM YOU THAT THE PERSONS WHO HAS DEALT THIS MATTER HAS ALREADY LEFT OUR ORGANIZATION' SO WHERE IS THE QUESTION OF NOT GIVING PROPER OPPORTUNITY? LD CIT(A) DID NOT GIVE ATTENTION TO A.O REMARK IN HIS ASSESSMENT ORDER THAT THE SAME PARTY WAS NOT EVEN ABLE TO IDENTIFY THE STAFF WHO ACTUALLY DID THE JOB IN ITS LETTER DT 04/08/2010'. REGARDING CP RE-ROLLER PVT.LTD C.P REROLLER VIDE ITS LETTER DT 22/08/2010 IN COMPLIANCE TO NOTICE U/S 133(6) STATED THAT' MR MAHENDRA MAURYA ' WAS THE' PERSON WHO WORKED 'ON THE LIAISON JOB, - WHEN NOTICE U/S. 131 WAS ISSUED FOR EXAMINATION .PURPOSE, THE , IT STATED VIDE ITS LETTER DT 11112/2010 'INFORM YOU THAT THE PERSONS WHO HAS WORKED IN THIS MATTER HAS ALREADY LEFT OUR COMPANY' ' SO WHERE IS QUESTION OF NOT GIVING OPPORTUNITY. IN FACT JUST AFTER THAT ALL THE PARTIES INCLUDING THE ASSESSEE WERE ISSUED. THE QUESTIONNAIRE, SO THAT EVEN BY ANSWERING THOSE QUESTION THEY COULD PROVE AND BRING' ON RECORD THE EVIDENCE' THAT THE PARTIES, HAD INDEED DONE LIAISON JOB. THESE LETTER W ERE ISSUED ON 12 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 12 08/12/2010 IV THE AO DREW THE CONCLUSION ON WRONG OR MISCONCEIVED REASONING WITH PROPERLY APPRECIATING THE FACTS AND ONLY BY ANALYZING THE REPLIES FILED BY THE ASSIGNS WHICH CAN BE OBSERVED FROM THE COMMENTS IN THE ASSESSMENT ORDER BY COMPARING THE REPLIES SUBMITTED BY THE ASSIGNS. FACT IS THAT, A.O DID NOT GET ANY REPLIES TO HIS POINTED QUESTION; SO THIS REMARK IS WITHOUT ANY FACT ON RECORD. V THE AO FAILED TO APPRECIATE THE FACT THAT WITH EFFECT FROM 1ST APRIL 2008 FROM THE SUBSEQUENT PERIODS, WWIL HAD DIRECTLY APPOINTED BMA STAINLESS LTD, AS ITS LIAISON AGENT IN PLACE OF THE APPELLANT. THUS THE QUESTION ON THE CAPABILITY OF THE SAID PARTY TO WORK AS ASSIGN OF THE APPELLANT DOES NOT _ ARISE. MORE SO WHEN THE AUTHENTICITY OF THE JOB IS NOT IN DOUBT. SINCE THE PERIOD FROM 0110'4/2008 IS NOT UNDER CONSIDERATION, IT CAN HELP THE CASE OF BMA.. SO , IT WOULD HAVE BEEN BETTER THAT BMA STAINLESS SHOULD HAVE PLACED SOME EVIDENCE THAT DURING FY 2007-08 , IT ACTUALLY DID THE LIAISON JOB. VI THE AO DID NOT ENQUIRE ABOUT THE PAYMENT WITH OTHER TWO PARTIES NAMELY M/S. MAXPRO TRACON PVT LTD AND STATT INVESTMENT & SERVICES PVT LTD. HOWEVER, HE ADDED TO THE TOTAL INCOME, THE AMOUNT OF LIAISON FEES PAID TO THESE TWO PARTIES TOO. THE THREE PARTIES WHO WERE ENQUIRED INTO GOT 99% OF. THE PAYMENT FOR ALLEGED LIAISON JOB. THEREFORE, A. 0 CONCENTRATED HIS EFFORT ON THE SAME. EVEN IF NO ENQUIRY WAS DONE, HOW COME THAT PROVES OTHER THREE PARTIES' DEALING CORRECT . WITHOUT AGREEING LD CIRCA) , IT CAN BE' AT BEST CAN BE SAID THAT IF LD CIT(A) HAS THOUGHT THAT THE A.O DID NOT ENQUIRE INTO AFFAIR OF MAXPRO & SATT INVESTMENT , THE AT BEST HE CAN DELETE AT BEST AMOUNTS RELATED TO THEM. THE BENEFIT CAN NOT BE EXTENDED TO PARTIES WHO WERE ENQUIRED INTO AND ABJECTLY FAILED TO BRING ON RECORD EVEN MOST FUNDAMENTAL EVIDENCE ON RECORD. VII THE APPELLANT ,DECLARED AND CONFIRMED ALL THE SUPPORTING AND THE STATEMENT OF LD CIT(A) IS FACTUALLY INCORRECT . NEITHER THE ASSESSMENT FOLDER 13 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 13 DOCUMENTS RELIED UPON HAVE BEEN DULY FILED AND DISCUSSED BEFORE THE AO. WAS CALLED FOR ,NOR THE STATEMENT OF A.O WAS ASKED FOR, NOR WAS HE. CALLED FOR HEARING. HOW CAN LD CIT(A) GIVE CERTIFICATE OF AUTHENTICITY THAT ASSESSEE HAD GIVEN ALL THE DOCUMENTS'. THE FACT IS ON RECORD THAT NONE OF THE PARTIES APPEARED U/S 131 OF THE I T ACT. DID NOT SUBMIT ANY EVIDENCE WHICH WAS LATER ASKED U/S 133(6). ON 27/12/2010 ,JUST THREE DAYS BEFORE IT MERELY FILED LETTER IN OFFICE WITHOUT ANY CORROBORATIVE EVIDENCE ASKED FOR . EVEN THAT LETTER ITSELF SAYS AT ANY PLACES 'ENCLOSURE ' .HOWEVER NO ENCLOSURE WAS ATTACHED . THE DATE OF LETTER WAS CHOSEN ON 27112/2010 , KNOWING FULLY WELL THAT LETTER CANNOT BE COUNTERED FOR PAUCITY OF FUND. VIII ALTERNATIVELY, IT IS ARGUED THAT APPELLANT HAS NOT MADE ANY EXPENDITURE TO EARN THAT INCOME SAVE AND EXCEPT THE EXPENSES ADMISSIBILITY THEREOF ARE IN DISPUTE. THE EXPENSES ARE THE. PAYMENTS IN SUCH ASSIGNS AND COMMISSION PAYMENT TO THE SUBAGENTS, WHO ARRANGED THE ASSIGNMENT JOB FOR THE APPELLANT. THIS ARGUMENT CAN NOT BE SUBSTITUTE FOR THE COMPLETE LACK OF EVEN BASIC EVIDENCE THAT THE PARTIES HAD DONE ANY LIAISON JOB THE EXPENSE IS ALLOWABLE UNDER INCOME TAX ACT ONLY WHEN IT IS INCURRED FOR THE PURPOSE OF ONE'S BUSINESS. ONLY POINT WHICH HAS BEEN PROVED BY ASSESSEE IS THAT A CERTAIN AMOUNTS WERE ISSUED THROUGH CHEQUE AND TDS WAS DEDUCTED., THAT IS NOT A PROOF OF A GENUINE EXPENDITURE..A GENUINE EXPENDITURE REQUIRE .SUPPORTING DOCUMENTS. IN THE INSTANT CASE THE PARTIES WHO RECEIVED THE PAYMENT THEMSELVES. ABJECTLY. FAILED TO BRING ON RECORD EVEN ONE EVIDENCE THAT ANY WORK WAS DONE BY THEM. THEREFORE ,THE CHEQUE PAYMENT IS NOT FOR ANY BUSINESS EXPENDITURE. ONE CAN GIVE ANY NAME TO IT BUT AN EXPENDITURE. 14 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 14 IX IT HAS NOT BEEN DENIED THAT THE APPELLANT HAD EARNED SUCH INCOME AND THE PRINCIPAL HAS PAID THE SUM' ON THE EXECUTION OF THE JOB ONLY. IT CANNOT BE DENIED THE WWIL HAD APPOINTED THE APPELLANT TO DO LIAISON JOB WITH THE BROADCASTERS. IT CAN CONVERSELY STATED THAT THE LIAISON JOB HAS TAKEN PLACE. THE AO HAD NO DIFFERENT VIEW ON THIS. THE POINT OF DISPUTE IS WHO DID THIS JOB. WHETHER APPELLANT ITSELF DID THE SAME JOB OR IT ASSIGNED TO ANY THIRD PARTIES. THE APPELLANT HAD NOT CLAIMED ANY EXPENDITURE THAN THE EXPENDITURES AN DISPUTE. IF IT IS ASSUMED THAT APPELLANT HAD EXECUTED THE JOB THEN THERE MUST BE SOME EXPENDITURE ON SALARY, TELEPHONE, TRAVELLING OR CONVEYANCE. NONE OF SUCH EXPENSES IS DEBITED TO THE AUDITED ANNUAL ACCOUNTS OF THE APPELLANT. ON THE OTHER HAND, THE PAYEES OF THE LIAISON FEES HAD ADMITTED THE TRANSACTIONS AND RECEIPT OF SUCH FEES FROM THE APPELLANT. THE A.O ACCEPTS THAT THE ASSESSEE RECEIVED THE JOB, THAT HE CONCLUDED THAT THE JOB WAS PERFORMED BY ITSELF ONLY WHICH IS CONFIRMED BY THE BROADCASTER THAT SRI SURESH SETHIA, DIRECTOR OF ASSESSEE HAD DONE THE JOB. NON CLAIMING EXPENSE WAS OPTED BECAUSE WHOLE FACTIOUS. EXPENSE CLAIM LEFT NO AMOUNT TO CLAIM AS EXPENSE. ANYWAY THE ASSUMPTION THAT THE ASSESSEE DID NOT CLAIM EXPENSE , CAN NOT BECOME PROOF OF ANY LIAISON JOB BY OTHERS. X) THE TRANSACTIONS RELATING TO THE PAYMENT OF LIAISING FEES TOOK PLACE THROUGH PROPER BANKING CHANNEL. THE PAYEES ARE INCOME TAX ASSESSEES AND THEIR TOTAL INCOME INCLUDES SUCH FEES, WHICH IS SUBJECT TO TAX. THE ACCOUNTS OF THE RECIPIENTS ARE DULY CHECKED AND AUDITED BY THE STATUTORY AUDITORS UNDER THE COMPANIES ACT AND INCOME-TAX ACT. IT IS TOTALLY IRRELEVANT BECAUSE THE ISSUE INVOLVED IS NOT REGARDING-SOURCE OF THE PAYMENT. HOW COME THIS FACT PROVES ANY WORK DONE BY PARTIES ?? XI) SUCH PAYMENTS OF LIAISING FEES WERE SUBJECT TO PROPER DEDUCTION OF TAX AT SOURCE AND SUCH COMPLIANCES HAVE SAME AS ABOVE . THESE ACTION DOES NOT MAKE A FAKE EXPENSE AS AUTHENTIC EXPENSE. 15 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 15 BEEN DULY MADE. THE COPIES OF .THE RESPECTIVE INCOME TAX RECORDS AND AUDITED ANNUAL ACCOUNTS OF THE ASSIGNS ARE FURNISHED. XII) IN VIEW OF THE ABOVE OBSERVATION / FINDINGS AND DISCUSSIONS-THE CLAIM OF THE APPELLANT THAT IT HAD APPOINTED THE ASSIGNS TO DO THE JOB IN ITS BEHALF AND HAS NOT DONE THE JOB BY ITSELF CANNOT BE DENIED. IN ALL THE AFORESAID 11 POINTS , NOT A SINGLE EVIDENCE IN SUPPORT OF THE PARTIES WHO ABJECTLY- FAILED , PARTIES WHO DID NOT ABIDE BY LAW WERE DISCUSSED IN THE ASSESSMENT ORDER. FOR EXAMPLE LD CIT (A) DID NOT EVEN WROTE A WORD REGARDING THE DENIAL BY THE BROADCASTER ABOUT .THE INVOLVEMENT OF PARTIES. ' LD CIT (A) DID NOT EVEN STATE AT ANY PLACE WHY THE QUESTIONS WHICH WERE ASKED BY A.O U/S 133(6) WERE ANSWERED BEFORE HIM 21. WE ARE OF THE VIEW THAT THE REASONS GIVEN BY T HE CIT(A) ARE IRRELEVANT CONSIDERATIONS. WE AGREE WITH THE CONTENTIONS PUT FORTH BY THE REVENUE IN THE TABLE GIVEN ABOVE, THAT THE CONCLUSIONS OF THE CIT(A) ARE UNSUSTAINABLE. IN THE ABSENCE OF ANY EVIDENCE TO SHOW THAT SERVICES WERE IN FACT REN DERED BY THE PERSONS TO WHOM THE ASSESSEE PAID COMMISSION, ALL THESE CONSIDERATIONS FADE INTO INSIGNIFICANCE. THE CIT(A) HAS PROCEEDED UNDER THE ASSUMPTION THAT IT I S THE REVENUE THAT HAS TO PROVE THAT SERVICES WERE IN FACT NOT RENDERED BY THE PERSON TO WHOM COMMISSION WAS PAID. THIS APPROACH IS LEGALLY NOT CORRECT. WHEN THE PRIMARIL Y EVIDENCE OF NATURE OF SERVICES RENDERED FOR WHICH ASSESSEE PAID COMMISSION IS NOT ON RECORD, IT IS NOT POSSIBLE TO SAY WHETHER THE EXPENDITURE WAS WHOLLY AND EXCLUSIVELY INCURRED FOR THE PURPOSE OF BUSINESS AND ALSO AS TO WHETHER EXPLANATION TO SEC. 37(1) OF THE ACT WOULD BE ATTRACTED. 16 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 16 22. FOR THE REASONS GIVEN ABOVE, WE REVERSE THE OR DER OF THE CIT(A) AND RESTORE THE ORDER OF THE AO. IN THE RESULT, APPEAL BY THE REVE NUE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 11.05.2016. SD/- SD/- [P.M.JAGTAP] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11.05.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. HITECH VISUAL CHANNEL PVT. LTD., 5C, RADIANT PARK, 201, NEW PARK STREET, 5 TH FLOOR, KOLKATA-700017. 2. I.T.O., WARD-7(1), KOLKATA. 3. CIT(A)-VIII, KOLKATA 4. CIT-III, KOLKAT A. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES 17 ITA NO.624/KOL/2012 M/S. HITECH VISUAL CHANNEL PVT. LTD. A.YR.2008-09 17