ALIS TRAVEL TREND P .LTD, MUMBAI V. ITO WD 2(1)(1), MUMBAI

ITA 6353/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0721 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 27-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Assessee Lawyers: VISHAL D S HAH RAJESH P SHAH
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO.6353/MUM/2016 (ASSESSMENT YEAR 2011-12) M/S. ALIS TRAVEL TREND PRIVATE LTD. 1, AKHALWAYA BUILDING, 42/44 AGIYARI LANES, FORT, MUMBAI 400 001. PAN:AAACA 4866D ...... APPELLANT VS. THE INCOME TAX OFFICER, WARD 2(1)(1) MUMBAI -400 051 .... RESPONDENT APPELLANT BY : S/SHRI VISHAL D. S HAH/ RAJESH P.SHAH RESPONDENT BY : SHRI A.K.KARDAM DATE OF HEARING : 11/05/2017 DATE OF PRONOUNCEMENT : 17/05/2017 ORDER THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO ASSESSMENT YEAR 2011-12 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-4, MUMBAI DATED 28/07/2016, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3)R.W.S.147 OF THE INC OME TAX ACT, 1961 (IN SHORT THE ACT) DATED 26/03/2015. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS A PPEAL IS WITH REGARD TO A DISALLOWANCE OF RS.34,69,254/- SUSTAINED BY THE CIT (A) OUT OF COMMISSION EXPENSES BY APPLYING SECTION 40A(2)(B) OF THE ACT. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE APPELL ANT IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT AND IS, INTER-ALIA, 2 ITA NO.6353/MUM/2016 (ASSESSMENT YEAR 2011-12) ENGAGED IN THE BUSINESS OF TRAVEL AGENCY. THE ASSE SSING OFFICER NOTED THAT THE ASSESSEE HAD PAID COMMISSION TO WIVES OF ITS DI RECTORS AMOUNTING TO RS.34,69,254/-, AND ASKED THE ASSESSEE TO JUSTIFY S UCH PAYMENTS UNDER SECTION 40A(2)(B) OF THE ACT . THE EXPLANATION FURN ISHED BY THE ASSESSEE WAS NOT TO THE SATISFACTION OF THE ASSESSING OFFICER AN D, THEREFORE, AN ADDITION OF RS.34,69,254/- WAS MADE TO THE RETURNED INCOME BY I NVOKING SECTION 40A(2)(B) OF THE ACT. THE SAID ADDITION HAS ALSO A FFIRMED BY THE CIT(A), AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE ME. 4. BEFORE ME, THE LD. REPRESENTATIVE FOR THE ASSESS EE POINTED OUT THAT SIMILAR PAYMENTS HAVE BEEN MADE IN THE EARLIER ASSE SSMENT YEARS ALSO AND THE SAME STANDS ALLOWED. THE LD. REPRESENTATIVE FO R THE ASSESSEE POINTED OUT THAT IN THE INSTANT YEAR ASSESSEE COULD NOT FU LLY SUBSTANTIATE ITS PLEA BEFORE THE LOWER AUTHORITIES SINCE THE RELEVANT DOC UMENTS, NAMELY, THE INCOME-TAX RETURNS OF THE WIVES OF THE DIRECTORS WE RE NOT AVAILABLE AT THE RELEVANT POINT OF TIME. THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT SUCH PAYMENTS TO THE WIVES OF THE DIRECTORS AR E COMPARABLE TO THE PAYMENTS MADE IN THE EARLIER YEARS AND THAT NOW THE ASSESSEE HAS BEEN ABLE TO OBTAIN COPIES OF THE INCOME-TAX RETURNS FILED B Y THE WIVES OF THE DIRECTORS, WHICH SUBSTANTIATES THAT SUCH INCOMES HAVE BEEN E ARNED AND DECLARED BY THE RECIPIENTS. THE LD. REPRESENTATIVE FOR THE AS SESSEE POINTED OUT THAT THE SAID ADDITIONAL DOCUMENTS BE ADMITTED UNDER RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES,1963. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE HAS POINTED OUT THAT ADDITION WAS MADE BY THE LOWER AUTHORITIES NOTICING THE FAILURE OF THE ASSESSEE TO SUBSTANTIATE THE IMPUGNED PAYMENTS. 3 ITA NO.6353/MUM/2016 (ASSESSMENT YEAR 2011-12) 6. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S. THE FIRST AND THE FOREMOST PLEA OF THE ASSESSEE IN THIS CASE IS FOR ADMISSION OF ADDITIONAL EVIDENCES IN THE SHAPE INCOME TAX RETURNS OF THE WI VES OF THE DIRECTORS, WHO HAVE BEEN PAID THE IMPUGNED COMMISSION EXPENSES. I N THE PAPER BOOK FILED BEFORE US, ASSESSEE HAS PLACED COPIES OF SUCH ADDIT IONAL EVIDENCE AND ALSO THE DETAILS OF PAYMENTS MADE TO SUCH INDIVIDUALS IN OTHER ASSESSMENT YEARS RIGHT FROM ASSESSMENT YEAR 2007-08 TO 2013-14. IT HAS ALSO BEEN ASSERTED BY THE LD. REPRESENTATIVE FOR THE ASSESSEE THAT IN OTH ER ASSESSMENT YEARS NO SUCH DISALLOWANCE HAS BEEN MADE. CONSIDERING THE E NTIRETY OF CIRCUMSTANCES, IN MY VIEW, IT WOULD BE IN THE FITNE SS OF THINGS THAT THE ADDITIONAL DOCUMENTS ARE ADMITTED FOR ADJUDICATION SINCE THE SAME ARE GERMANE TO DECIDE THE CONTROVERSY IN QUESTION. THE REFORE, THE MATTER IS RESTORED BACK TO THE FILE OF ASSESSING OFFICER, WHO SHALL CONSIDER THE PLEA OF THE ASSESSEE REGARDING THE ALLOWABILITY OF EXPENDIT URE ON ACCOUNT OF COMMISSION PAYMENTS NOT ONLY IN THE LIGHT OF THE AD DITIONAL EVIDENCE NOW SOUGHT TO BE PRODUCED, BUT ALSO ON THE BASIS OF ANY OTHER SUBMISSIONS THAT THE ASSESSEE MAY ADOPT TO JUSTIFY ITS RETURN OF INC OME. NEEDLESS TO MENTION, THE ASSESSING OFFICER SHALL CONSIDER THE PLEA OF TH E ASSESSEE AND, THEREAFTER PASS AN ORDER AFRESH ON THIS LIMITED ASPECT IN ACC ORDANCE WITH LAW. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 17/05/2017 SD/- (G.S. PANNU) ACCOCUNTANT MEMBER MUMBAI, DATED 17/05/2017 VM , SR. PS 4 ITA NO.6353/MUM/2016 (ASSESSMENT YEAR 2011-12) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI