Shri Vishal Aggarwal, New Delhi V. ITO, New Delhi

ITA 6324/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7522 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 09-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Section: 40(a)(ia)

Judgement Text

1 , , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI , . , ) BEFORE MS. SUSHMA CHOWLA, VICE PRESIDENT & DR. B.R.R. KUMAR, ACCOUNTANT MEMBER . / ITA NOS.6323 & 6324/DEL/2016 * * / ASSESSMENT YEARS. 2010-11 & 2011-12 VISHAL AGGARWAL, PROP. M/S VISHAL ENTERPRISES, A-7, KRISHAN PARK, DEVLI ROAD, KHANPUR, NEW DELHI-110062 PAN-AKYPA6849F .......... /APPELLANT VS ITO, WARD-31(4), NEW DELHI . / RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SH. SARAS KUMAR, SR.DR. / DATE OF HEARING : 07.01.2020 / DATE OF PRONOUNCEMENT: 30.01.2020 / ORDER PER SUSHMA CHOWLA, VP THESE TWO APPEALS FILED THE ASSESSEE ARE AGAINST TH E ORDER OF LD. CIT(A)- 11, NEW DELHI, DATED 21/10/2016 AND 20/10/2016 FOR THE ASSESSMENT YEAR ITA NO.5777/DEL/2016 & ORS. ASSESSMENT YEAR 2013-14 2 2010-11 AND 2011-12 RESPECTIVELY UNDER SECTION 143( 3)/147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS FILED FOLLOWING GROUNDS OF APP EAL IN ITA NO.6323/DEL/2016:- 1. IN SUSTAINING THE DISALLOWANCE OF GENUINE EXPEN SES OF RS.57,11,102/- DISALLOWED BY THE ASSESSING OFFICER. 2. IN SUSTAINING THE ADDITION OF RS.57,11,102/- U/S 40(A)(IA) R/W SECTION 194H OF THE ACT TAKING IT AS ALLEGED COMMIS SION PAID BY THE ASSESSEE TO THE VARIOUS DEALERS IN CONTEXT WITH REC HARGE COUPONS OF RELIANCE MOBILES WHICH IS FACTUALLY NOT A COMMISSIO N COVERED U/S 194H OF IT ACT. 3. IN NOT FOLLOWING THE VARIOUS JUDICIAL DECISIONS TERMING THE ABOVE EXPENSES AS NOT BEING COMMISSION PAID BY THE APPELLANT AND THUS NOT COVERED BY THE PROVISIONS OF SECTION 194H OF THE AC T. 4. IN APPLYING THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT V. IDEA CELLULAR LTD. (2010) 325 ITR 148 WHEN THE FACT S OF THE APPELLANTS ARE DIFFERENT AND DISTINGUISHABLE. 5. IN IGNORING OUR SUBMISSIONS AND CONFIRMATION FRO M M/S RELIANCE COMMUNICATION LTD. THAT THE PAYMENTS MADE TO THE RE TAILERS BY THE APPELLANT ARE DETERMINED/INSTRUCTED BY THE PRINCIPA L COMPANY AND PAID ON ITS BEHALF WHICH MEANS THAT THE APPELLANT HAS NO T PAID ANY PAYMENT TO THE RETAILER ON ITS OWN BEHALF TO WHICH SECTION 194H CAN APPLY. 2. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEH ALF OF THE ASSESSEE, SINCE THE PRESENT ISSUE IS COVERED, WE PROCEED TO DEICE T HE SAME AFTER HEARING THE LD. DR FOR THE REVENUE. 3. THE ONLY ISSUE RAISED IN BOTH APPEALS IS AGAINST THE DISALLOWANCE OF ALLEGED COMMISSION PAID BY THE ASSESSEE AND WHETHER THE SAME WAS EXIGIBLE TO TAX DEDUCTION AT SOURCE UNDER SECTION 194H OF TH E ACT. 4. BRIEFLY IN THE FACTS OF THE CASE, THE ASSESSEE W AS A DISTRIBUTOR OF RELIANCE MOBILE RECHARGE COUPONS AND PARLE BISCUITS IN WHOLESALE TRADING. ITA NO.5777/DEL/2016 & ORS. ASSESSMENT YEAR 2013-14 3 THE ASSESSEE HAD DECLARED THE INCOME UNDER THE HEAD INCOME FROM BUSINESS. THE ASSESSEE HAD CLAIMED COMMISSION EXPE NSES OF RS.57,11,102/-. THE ASSESSEE HAD NOT DEDUCTED ANY TAX AT SOURCE OUT OF SUCH COMMISSION PAYMENTS. THE ASSESSING OFFICER WAS OF THE VIEW THA T THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE OUT OF SUCH PAYMENTS. HOWEV ER, THE ASSESSEE FAILED TO FILE ANY DETAILS BEFORE THE ASSESSING OFFICER, HENC E, THE SAID EXPENSES WERE DISALLOWED AS NON-GENUINE AND ALSO DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT. 5. BEFORE THE CIT(A), THE LD. AR FOR THE ASSESSEE P OINTED OUT THAT THE ASSESSEE WAS ENGAGED IN SALE OF RECHARGE COUPONS AN D THE SAME WERE SOLD TO SUB-DISTRIBUTORS ON PRINCIPLE TO PRINCIPLE BASIS, H ENCE, THERE WAS NO REQUIREMENT TO DEDUCT TAX AT SOURCE UNDER SECTION 1 94H OF THE ACT. RELIANCE WAS PLACED ON SEVERAL DECISIONS IN THIS REGARD. THE LD. CIT(A) RELYING ON THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS IDEA CELLULAR LTD. (2010) 325 ITR 148 (DEL.) HELD THAT T HE EXPENDITURE INCURRED BY THE ASSESSEE IS EXIGIBLE TO TAX DEDUCTION AT SOURCE UNDER SECTION 194H OF THE ACT.. SINCE, THE ASSESSEE HAD FAILED TO DEDUCT TAX AT SOURCE UNDER SECTION 194H OF THE ACT, THE SAID AMOUNT WAS TO BE DISALLOW ED IN THE HANDS OF THE ASSESSEE. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT(A). 7. THE NOTICE OF HEARING WAS SENT TO THE ASSESSEE F OR 17/10/2019 AND ALSO FOR 07/01/2020, HOWEVER, THE NOTICE OF HEARING HAS BEEN RETURNED BY THE ITA NO.5777/DEL/2016 & ORS. ASSESSMENT YEAR 2013-14 4 POSTAL AUTHORITY WITH THE REMARK LEFT. NO ALTERNA TE ADDRESS IS AVAILABLE ON RECORD, HENCE, THE APPEAL IS DECIDED EX-PARTE QUA THE ASSESSEE. 8. ON PERUSAL OF THE RECORD AND AFTER HEARING THE L D. DR FOR THE REVENUE, WE FIND THAT THE SAID ISSUE STAND COVERED BY THE RA TIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS IDEA CELLULAR L TD. (2010) 325 ITR 148 (DEL.). THE SAID PRINCIPLE HAS BEEN APPLIED BY THE CIT(A), WHILE DECIDING THE SAID ISSUE AGAINST THE ASSESSEE. SINCE, THE ASSESSE E HAD FAILED TO DEDUCT TAX AT SOURCE OUT OF PAYMENTS MADE TO DIFFERENT PARTIES UNDER SECTION 194H OF THE ACT. 9. FOLLOWING THE RATIO LAID DOWN BY THE HONBLE DEL HI HIGH COURT IN CIT VS IDEA CELLULAR LTD. (SUPRA), WE HOLD THAT THERE WAS LIABILITY ON THE ASSESSEE TO DEDUCT TAX AT SOURCE ON THE RECHARGE COUPONS SOLD B Y THE ASSESSEE AND AS THE ASSESSEE HAS FAILED TO DEDUCT TAX AT SOURCE, THE SA ID EXPENDITURE IS NOT ALLOWABLE UNDER SECTION 40(A)(IA) OF THE ACT. HENCE , THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE DISMISSED. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSE E ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY 2020. SD/- SD/- (B.R.R. KUMAR) (SUSHMA CHO WLA) ) /ACCOUNTANT MEMBER /VICE PRESIDENT / DATED : 30 TH JANUARY, 2020 SHEKHAR, SR. P.S. ITA NO.5777/DEL/2016 & ORS. ASSESSMENT YEAR 2013-14 5 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT 2. / TH E RESPONDENT 3. ! ( ) / THE CIT(A) 4. # ! / THE PR. CIT 5. 6. , , ' / DR, ITAT, DELHI ) / GUARD FILE. / BY ORDER , -. , , ASSISTANT REGISTRAR, ITAT, DELHI