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ITA 6400/DEL/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0434 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 18-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Principle of natural justice; Non compliance; Competent authority; Onus to prove; TDS
• Section: 69C; 143(3); 142(1); 133(6); 143(2); 72; 22; 131; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: E NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.6400/DEL./2017 ASSESSMENT YEAR: 2013-14 MADHYAM BUILDTECH PVT. LTD., C-20, GROUND FLOOR, SECTOR- 2, NOIDA VS. DCIT, CIRCLE-16(1), NEW DELHI PAN :AAGCM3594G (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 18.08.2017 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-6, DELHI [IN SHORT THE LEARNE D CIT(A)] FOR ASSESSMENT YEAR 2013-14, RAISING FOLLOWING GROUNDS: 1. THAT AUTHORITIES BELOW HAVE FAILED TO APPRECIAT E THAT SOURCE OF COMMISSION PAID BY ACCOUNT PAYEE CHEQUES WHICH ARE DULY ACCOUNTED FOR IN THE ACCOUNT BOOKS OF THE APPELLANT NOT HAVING BEEN DOUBTED AND EXPLANATION FURNISHED ABOUT THE SO URCE OF THE EXPENDITURE ALSO NOT HAVING BEEN FOUND UNSATISFACTO RY, EXPENDITURE ON ACCOUNT OF COMMISSION IS NOT COVERED BY THE PROVISIONS OF SECTION 69C OF THE IT ACT AND THEREFO RE, THE IMPUGNED DISALLOWANCE OF RS.48,07,109/- IS WITHOUT JURISDICTION AND LIABLE TO BE DELETED. APPELLANT BY NONE RESPONDENT BY MS. RINKU SINGH, SR.DR DATE OF HEARING 01.03.2021 DATE OF PRONOUNCEMENT 11.03.2021 2 ITA NO.6400/DEL./2017 2. THAT IN ANY CASE, THE AUTHORITIES BELOW HAVE FA ILED TO APPRECIATE THAT CONFIRMATORY LETTERS OF THE PAYEES OF THE COMM ISSION, THEIR PANS AND COPIES OF ITRS AS ALSO BANK STATEMENTS CON TAINING THE ENTRIES OF COMMISSION PAID HAVING BEEN FILED, THE A PPELLANT HAD DISCHARGED THE INITIAL ONUS TO PROVE THE GENUINENES S OF THE TRANSACTION AND IDENTITY OF THE PERSONS TO WHOM COM MISSION WAS PAID. THE APPROACH OF THE AUTHORITIES BELOW HOLDING OTHERWISE ON GROUND OF NON COMPLIANCE OF NOTICES/SUMMONS BY THE PAYEES IS ARBITRARY AND UNSUSTAINABLE. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, MODIFY OR ALTER THE GROUNDS OF APPEAL AT THE TIME OF HEARING OF THE APP EAL. 3. DESPITE NOTIFYING, NEITHER ANY ONE APPEARED, NOR AN Y ADJOURNMENT APPLICATION HAS BEEN FILED ON BEHALF OF THE ASSESSEE. ON EARLIER DATE, I.E., 04.01.2021, ALSO NONE APPEAR ED ON BEHALF OF THE ASSESSEE, AND THEREFORE, THE ASSESSEE WAS ISSUE D NOTICE THROUGH REGISTERED POST. IT IS SEEN FROM THE RECORD THAT THIS NOTICE DATED 04.01.2021 ISSUED BY THE REGISTRY FOR HEARING ON 01.03.2021 DID NOT RETURN BACK. THUS, IT IS ASSUMED THAT THIS NOTICE WAS DULY SERVED UPON THE ASSESSEE AND NO COM PLIANCE HAS BEEN MADE ON THE PART OF THE ASSESSEE. IN SUCH CIRC UMSTANCES, WE FEEL IT APPROPRIATE TO DECIDE THE APPEAL EX-PARTE . ACCORDINGLY, AFTER HEARING THE ARGUMENT OF THE LEARNED DR, WE PROCEEDE D TO DECIDE THE APPEAL. 4. THE FACTS IN BRIEF OF THE CASE ARE THAT THE ASSESS EE COMPANY WAS ENGAGED IN SALE/BOOKING OF THE BUILDERS FLATS ON THE COMMISSION BASIS ON BEHALF OF VARIOUS BUILDERS/REAL ESTATE DEVELOPERS. DURING THE YEAR UNDER CONSIDERATION, TH E ASSESSEE FILED RETURN OF INCOME ON 28.09.2013, DECLARING TOT AL INCOME OF RS.1,32,34,630/-. THE CASE WAS SELECTED FOR SCRUTIN Y AND NOTICE UNDER SECTION 143(2) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT) WAS ISSUED AND COMPLIED WITH. IN THE ASSESSME NT COMPLETED UNDER SECTION 143(3) OF THE ACT DATED 31.03.2016, T HE ASSESSING 3 ITA NO.6400/DEL./2017 OFFICER DISALLOWED THE COMMISSION EXPENSES AMOUNTIN G TO RS.48,07,109/-. ON FURTHER APPEAL, THE LEARNED CIT( A) UPHELD THE DISALLOWANCE. AGGRIEVED, THE ASSESSEE IS BEFORE THE INCOME TAX APPELLATE TRIBUNAL (IN SHORT THE TRIBUNAL) RAISIN G THE GROUNDS AS REPRODUCED ABOVE. 5. BEFORE US, THE LEARNED DR APPEARED THROUGH VIDEO CONFERENCING FACILITY AND RELIED ON THE ORDERS OF T HE LOWER AUTHORITIES. 6. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED DR AN D PERUSED THE RELEVANT MATERIAL ON RECORD. 6.1 WE FIND THAT THE ASSESSEE HAS CLAIMED COMMISSION E XPENSES OF RS.1,58,66,893/- OUT OF WHICH THE ASSESSING OFFI CER ON TEST CHECK BASIS CALLED FOR DETAILS FOR JUSTIFICATION OF THE EXPENSES IN FOLLOWING CASES: S. NO. NAME OF PARTY AMOUNT (IN RS.) 1. SHRI ANIL SHARMA 12,00,000/- 2. M/S. GOLDMINE DEVELOPERS PVT. LTD. 10,31,929/- 3. SHRI HARISH SHARMA 7,75,180/- 4. SHRI KUMAR GAURAV 5,00,000/- 5. MS. MITALI 6,00,000/- 6. M/S. PROPERTY POINT 7,00,000/- TOTAL 48,07,109/- 6.2 THE LEARNED ASSESSING OFFICER CALLED FOR COPY OF T HE RETURN, COMPUTATION, PROFIT AND LOSS ACCOUNT AND BALANCE-SH EET ETC. FILED BY THOSE PERSONS, USING AUTHORITY U/S 133(6) OF THE ACT. THE ASSESSING OFFICER WAS ALSO ASKED TO FILE COPY OF TH E BANK STATEMENT AND DETAILS OF PROPERTY SOLD OR PURCHASED BY THOSE PERSONS, FOR THE ASSESSEE COMPANY. THE ASSESSING OF FICER ON VERIFICATION UNDER SECTION 133(6) OF THE ACT FOUND THAT EITHER NO REPLY WAS RECEIVED OR THE LETTER SENT WAS RETURNED BACK. THE REPLY 4 ITA NO.6400/DEL./2017 FURNISHED BY THE ASSESSEE ON BEHALF OF THOSE PERSON S WAS FOUND IN THE SAME FORMAT WITH PART INFORMATION ONLY. THE ASSESSING OFFICER ACCORDINGLY ISSUED NOTICE UNDER SECTION 142 (1) TO THE ASSESSEE TO PRODUCE THOSE PERSONS ALONG WITH THEIR BOOKS OF ACCOUNT. HOWEVER, THE ASSESSEE SUBMITTED THAT THE P AYMENTS TO THOSE PERSONS WERE MADE BY COMPANY THROUGH CHEQUES, WHICH WERE SUBJECTED TO DEDUCTION OF TDS AND SERVICE TAX. THE ASSESSEE ALSO FILED COPY OF ITS BANK ACCOUNT. ON THE REQUEST OF THE ASSESSEE, THE ASSESSING OFFICER ISSUED SUMMONS UNDE R SECTION 131 OF THE ACT TO ALL THOSE PERSONS, HOWEVER, NONE APPEARED BEFORE HIM. IN THE CIRCUMSTANCES, THE LEARNED ASSES SING OFFICER DISALLOWED THE COMMISSION CLAIMED TO HAVE PAID TO T HOSE PERSONS OBSERVING AS UNDER: 2.7 THE ASSESSEE'S SUBMISSIONS ARE CONSIDERED ON M ERITS. HOWEVER, THE FRESH SUBMISSION OF THE ASSESSEE STILL DOES NOT ADDRESS THE REMARKS MADE IN PARA 2.5 ABOVE. FURTHER , IN LIGHT OF THE ASSESSEE'S REQUEST, SUMMONS U/S 131 WERE ISSUED TO ALL THE ABOVE PERSONS VIDE NOTICES DATED 15.3.2016. HOWEVER, NONE APPEARED IN RESPONSE THE SUMMONSES ISSUES. IN FACT, THE SUMMONS ES ISSUED TO SH. ANIL SHARMA AND MS. MITALI HAVE BEEN RECEIVED B ACK. FURTHER, THE DIRECTOR/S OF M/S GOLDMINE DEVELOPERS PVT. LTD DID NOT APPEAR IN RESPONSE TO THE SUMMONS ISSUED BUT SENT THEIR REPLY DATED 21.3.2016 THROUGH SPEED POST. THEREFORE, THE DOUBT THAT WAS CAST ON THE IDENTITY OF THE AFORESAID SIX PERSONS HAS NOT B EEN CLEARED. 2.8 IN VIEW OF THE ABOVE DISCUSSION, IT IS APPARENT THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS UPON IT T O PROVE THE IDENTITY OF PERSONS TO WHOM COMMISSION HAS BEEN PAI D AND THE GENUINENESS OF THE TRANSACTIONS UNDERTAKEN. THEREFO RE, THE AMOUNT OF RS. 48,07.109/-, BEING '' E AMOUNT OF COMMISSION PAID, IS DISALLOWED U/S 69 AND ADDED BACK TO THE INCOME OF T HE ASSESSEE. 6.3 ON FURTHER APPEAL, THE LEARNED CIT(A) UPHELD THE DISALLOWANCE OBSERVING AS UNDER: 3.2.3. THE FACTS OF THE CASE AND THE SUBMISSIONS O F THE APPELLANT HAVE BEEN CAREFULLY CONSIDERED. APPELLANT -COMPANY WAS ENGAGED IN SALE/BOOKING OF BUILDERS FLAT ON COMMISS ION BASIS ON BEHALF OF VARIOUS BUILDERS/REAL ESTATE DEVELOPERS T HROUGH ITS SALES 5 ITA NO.6400/DEL./2017 TEAM AT DIFFERENT LOCATIONS IN INDIA. DURING THE YE AR UNDER CONSIDERATION, IT HAD DEBITED COMMISSION EXPENSES A MOUNTING TO RS. 1,58,66,893/- IN ITS PROFIT AND LOSS ACCOUNT. ASSES SING OFFICER ISSUED NOTICE UNDER SECTION 133(6) TO VARIOUS PARTIES TO W HOM COMMISSION AGGREGATING TO RS. 48,07,109/- WAS PAID, VIZ., SHRI ANIL SHARMA, M/S GOLDMINE DEVELOPERS PVT. LTD., SHRI HARISH SHAR MA, SHRI KUMAR GAURAV, MS. MITALI AND M/S PROPERTY POINT, WHEREIN PARTIES WERE ASKED TO PRODUCE INCOME TAX RETURN, COMPUTATION OF INCOME, PROFIT & LOSS ACCOUNT, BALANCE SHEET, BANK STATEMENT, COPY O F LEDGER ACCOUNT OF APPELLANT IN BOOKS OF PARTIES, DETAILS OF PAYMEN T RECEIVED FROM APPELLANT ALONG WITH NATURE AND DETAILS OF PRODUCTS SOLD TO/PURCHASED FROM APPELLANT-COMPANY. THE REPLY TO N OTICE UNDER SECTION 133(6) WAS RECEIVED ONLY FROM SHRI HARISH S HARMA, HOWEVER, LEDGER AND CONFIRMATION WAS NOT FILED BY SAID PARTY . APPELLANT SUBMITTED RETURN AND CONFIRMATION OF REMAINING PART IES. THE CONFIRMATION FILED BY APPELLANT OF VARIOUS PARTIES WAS IN SAME FORMAT. FURTHER, OUT OF A1 PARTIES, ONLY MS. MITALI CLAIMED COMMISSION INCOME IN HER RETURN OF INCOME. BY VIRTU E OF NOTICE UNDER SECTION 142(1), APPELLANT WAS ASKED TO PRODUCE SAID PARTIES WITH BOOKS OTHERWISE ADDITION OF RS. 48.07 LAKH WOULD BE MADE. THE REPLY WAS RECEIVED ONLY FROM M/S GOLDMINE DEVELOPER S PVT. LTD ACKNOWLEDGING RECEIPT OF COMMISSION. IN THAT STAGE ALSO, APPELLANT FURNISHED COPY OF ACCOUNTS OF PARTIES IN ITS BOOKS AND BANK STATEMENT HIGHLIGHTING PAYMENT. APPELLANT STATED TH AT PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUE AND TDS & SE RVICE TAX WAS DEDUCTED THEREFROM. ON BEING ISSUED SUMMONS UND ER SECTION 131, NONE OF SAID PARTIES APPEARED. EVEN SUMMONS IS SUED TO SHRI ANIL SHARMA AND MS. MITALI WERE RECEIVED BACK. THUS , IDENTITY OF PAYEE OF COMMISSION AND GENUINENESS OF COMMISSION P AYMENT WERE NOT PROVED AND ACCORDINGLY, THE ASSESSING OFFICER M ADE ADDITION OF RS. 48,07,109/- UNDER SECTION 69. APPELLANT SUBMITT ED THAT ACTIVITY WAS DONE WITH SUB AGENTS TO WHOM COMMISSION PAID FO R SERVICES. APPELLANT CONTENDED THAT PROVISIONS OF SECTION 69 D EALS WITH UNEXPLAINED INVESTMENT, HENCE, NOT APPLICABLE IN IN STANT CASE. IN ADDITION TO IT, SINCE PAYMENT WAS MADE THROUGH CHEQ UES AND TDS & SERVICE TAX WAS DEDUCTED FROM PAYMENT OF COMMISSION MADE, THERE WAS NO DOUBT ON SOURCE OF EXPENDITURE, HENCE SECTIO N 69C IS ALSO NOT APPLICABLE. SO FAR AS CONTENTION OF APPELLANT THAT ADDITION MAD E BY ASSESSING OFFICER IS NOT SUSTAINABLE AS ADDITION WAS MADE UND ER SECTION 69 INSTEAD OF SECTION 69C, IT IS A WELL SETTLED PRINCI PLE OF LAW THAT MENTIONING OF WRONG SECTION DOES NOT INVALIDATE AN ORDER IF AUTHORITY HAD THE REQUISITE JURISDICTION UNDER LAW AND THE PR OCEEDINGS WERE CARRIED OUT IN CONFORMITY WITH THE INTENT AND PURPO SE OF THE LAW. THIS POSITION HAS BEEN EXPLICITLY LAID OUT IN SECTION 29 2B OF THE ACT. THUS, QUOTING OF WRONG PROVISION OF SECTION 69 IN THE ASS ESSMENT ORDER BY THE ASSESSING OFFICER DOES NOT TAKE AWAY THE JURISD ICTION OF THE 6 ITA NO.6400/DEL./2017 AUTHORITY UNDER SECTION 69C OF THE INCOME TAX ACT, 1961. THEREFORE, ASSESSMENT ORDER CANNOT BE QUASHED ON THIS SOLE GRO UND AS CONTENDED BY THE APPELLANT. IN SUPPORT THEREOF, REL IANCE MAY BE PLACED ON FOLLOWING DECISIONS : IN GALAXY NIRMAAN PVT. LTD. V. ACIT IN ITA NO. 1247 /DEL/2014 DT. 19-5-2017, ASSESSEE DID NOT FILE RETURN OF INCOME UP TO DUE DATE. THE ASSESSING OFFICER ISSUED NOTICE UNDER SEC TION 142(1) REQUIRING ASSESSEE TO FILE THE RETURN OF INCOME. TH E ASSESSEE DID NOT COMPLY THIS NOTICE. ANOTHER NOTICE UNDER SECTION 14 2(1) REQUIRING ASSESSEE TO FILE THE RETURN OF INCOME. THE ASSESSEE DID NOT COMPLY THIS NOTICE ALSO. AGAIN A FRESH NOTICE WAS ISSUED U NDER SECTION 142(1) FOR FILING RETURN OF INCOME. IN RESPONSE TO THIS NOTICE, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INC OME OF RS.2,39,16,490/-. THE CASE WAS SELECTED FOR SCRUTIN Y AND NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED. DURING THE ASSESSMENT PROCEEDING, THE ASSESSING OFFICER OBSERVED THAT TAX LIABILITY OF RS.1,09,71,691/- ON THE INCOME DECLARED IN THE RETU RN OF INCOME WAS SHOWN PAYABLE UNDER SECTION 140A. IN VIEW OF NO N-PAYMENT OF ADMITTED TAX LIABILITY UNDER SECTION 140A(1), THE A SSESSING OFFICER ASKED ASSESSEE TO FURNISH THE EVIDENCE OF TAX PAID AS COMPUTED IN THE RETURN OF INCOME AND ISSUED SHOW CAUSE THAT IN ABSENCE OF NO SUCH EVIDENCE AS WHY THE PENALTY MIGHT NOT BE LEVIE D FOR NON- PAYMENT OF ADMITTED TAX. IN THE SHOW CAUSE NOTICE, ASSESSING OFFICER MENTIONED THE SECTION 140A(3) FOR LEVY OF P ENALTY. IN RESPONSE, THE ASSESSEE SUBMITTED THE CIRCUMSTANCES UNDER WHICH THE ADMITTED TAX COULD NOT BE PAID INCLUDING LIQUID ITY CRUNCH. THE ASSESSEE ALSO REFERRED TO PROVISION OF SECTION 221, WHICH SAYS THAT IF THERE IS SUFFICIENT REASON FOR NON-PAYMENT OF TAX U NDER SECTION 140A, NO PENALTY SHOULD BE LEVIED. BUT, THE ASSESSEE ALSO REFERRED THE RELEVANT SECTION OF PENALTY AS UNDER SECTION 140A(3 ). THE ASSESSING OFFICER CONSIDERED THE SUBMISSION OF THE ASSESSEE, HOWEVER, IN ABSENCE OF ANY SUPPORTING DOCUMENTARY EVIDENCE OF L IQUIDITY CRUNCH, HE WAS NOT SATISFIED WITH THE REASONS CITED BY THE ASSESSEE FOR NON- PAYMENT OF ADMITTED TAX. THE ASSESSING OFFICER HELD THE ASSESSEE IN DEFAULT FOR NOT MAKING PAYMENT OF ADMITTED TAX LIAB ILITY OF RS.L,09,71,691/-AND LEVIED A PENALTY OF AN AMOUNT E QUAL TO ADMITTED TAX LIABILITY QUOTING SECTION 140A(3). BEF ORE COMMISSIONER OF INCOME-TAX (APPEALS), THE ASSESSEE RAISED THE GR OUND THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS LIABLE TO BE QUASHED AS THE PENALTY HAS BEEN LEVIED UNDER SECTION 140A(3), WHEREAS IT SHOULD HAVE BEEN LEVIED UNDER SECTION 221. THE CIT( A) HOWEVER, HELD THAT PROVISIONS OF SECTION 292B WOULD COVER SU CH INADVERTENT MISTAKE IN QUOTING THE CORRECT SECTION AS THE APPEL LANT HAD PARTICIPATED IN THE PROCEEDINGS WITHOUT RENDERING A NY OBJECTION AND ACCORDINGLY, DISMISSED THE APPEAL OF ASSESSEE. ASSE SSEE SUBMITTED THAT QUOTING WRONG SECTION WAS FATAL TO LEVY OF PEN ALTY AND THE ASSESSEE COULD NOT GET OPPORTUNITY TO DEFEND THE PE NALTY LEVIED. ON 7 ITA NO.6400/DEL./2017 THE OTHER HAND, REVENUE SUBMITTED THAT THE EXACT NA TURE OF CONTRAVENTION FOR WHICH THE ASSESSEE WAS LIABLE WAS DULY REFERRED IN THE SHOW CAUSE NOTICE AND THERE WAS A ONLY WRONG MENTION OF SECTION 140A(3) INSTEAD OF SECTION 221 AND ASSESSEE WAS DULY PROVIDED THE OPPORTUNITY AND WAS HEARD. FURTHER, AS SESSEE ALSO DULY COMPLIED AND SUBMITTED THE REASONS AS WHY THE ADMITTED TAX LIABILITY COULD NOT BE PAID, TO SATISFY THE ASSESSI NG OFFICER THAT THE DEFAULT WAS FOR GOOD AND SUFFICIENT REASONS. REVENU E SUBMITTED THAT IN VIEW OF THE ABOVE THE PENALTY LEVIED SHOULD BE S USTAINED. IT WAS HELD THAT THE ASSESSING OFFICER HAS ISSUED SHOW CAU SE NOTICE AS TO WHY THE PROCEEDINGS UNDER SECTION 140A(3) FOR IMPOS ING PENALTY SHOULD BE CONSIDERED. THE PERUSAL OF SHOW CAUSE NOT ICE, MAKES IT EVIDENT THAT THE ASSESSEE WAS FIRST INFORMED THE RE LEVANT PROVISIONS OF SECTION 140A(3) AND THEN IT WAS SHOW CAUSED AS W HY IT MAY NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT FOR NON-PAYM ENT OF SELF ASSESSMENT TAX. THEREAFTER, THE ASSESSING OFFICER S HOW CAUSED AS WHY THE PENALTY MIGHT NOT BE LEVIED FOR NON-COMPLIA NCE OF SECTION 140A. THIS SHOWS SUFFICIENT COMPLIANCE OF FIRST PRO VISO TO THE SECTION 221. FURTHER, IT IS EVIDENT THAT THE ASSESSEE HAS D ULY REPLIED THE REASONS FOR NONPAYMENT OF SELF-ASSESSMENT TAX AMOUN TING TO RS. 1,09,71,691/- IN ORDER TO DISCHARGE ITS ONUS TO SHO W 'GOOD AND SUFFICIENT CAUSE' FOR NON-PAYMENT OF TAX AT THE TIM E OF FILING OF RETURN, AS REQUIRED UNDER PROVISO TO SECTION 221. THUS, IN SUBSTANCE, THE ASSESSEE WAS DULY PROVIDED OPPORTUNITY OF HEARING A ND TO DISCHARGE ITS ONUS TO SHOW 'GOOD AND SUFFICIENT REASONS', WHI CH BEING REQUIREMENTS FOR LEVY OF PENALTY UNDER SECTION 221. THUS, BEFORE LEVY OF THE PENALTY, THE ASSESSEE HAS BEEN COMMUNICATED EXACT NATURE OF CONTRAVENTION, FOR WHICH THE ASSESSEE WAS LIABLE, F OR PENALTY UNDER SECTION 221. IT WAS FOUND THAT THE ASSESSING OFFICE R HAS MENTIONED ALL THE ALLEGATIONS AND CHARGES AGAINST THE ASSESSE E IN CLEAR TERMS IN THE SHOW CAUSE NOTICE AND THE ASSESSEE HAS ALSO DULY RESPONDED TO THOSE CHARGES. THE ASSESSEE IN ITS SUBMISSION AL SO REFERRED TO THE RELEVANT SECTION FOR LEVY OF PENALTY AS 140A(3). IN THE CIRCUMSTANCES, THE PROCEEDING OF THE ASSESSING OFFICER IN THE IMPU GNED ORDER, IN SUBSTANCE AND EFFECT IN CONFORMITY WITH PROVISIONS OF SECTION 221 OF THE ACT AND THUS, PROCEEDINGS IN QUESTION OF THE AS SESSING OFFICER CANNOT BE HELD AS INVALID. IN THE DECISION OF THE HON'BLE HIGH COURT OF GUJARA T IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX V. SUGAR DEVELO PERS, REPORTED IN (2016) 72 TAXMANN.COM 321(GUJ), IT WAS HELD THAT WHENEVER ADMINISTRATIVE ACTION IS FOUND TO BE SUFFE RING FROM BREACH OF PRINCIPAL OF NATURAL JUSTICE, THE DECISION-MAKIN G PROCESS SHOULD BE PLACED AT A STAGE WHERE DEFECT IS DETECTED RATHE R THAN TO PERMANENTLY ANNUL ACTION OF THE AUTHORITY. IN CASE OF P.K. PALANISAMY VS. N ARUMUGHAM AND ANOTHER IN CIVIL APPEAL NO. 2099, ARISING OUT OF SLP (CIVIL) N O. 2308 OF 2009, THE HON'BLE SUPREME COURT OBSERVED THAT IT IS A WEL L SETTLED PRINCIPLE 8 ITA NO.6400/DEL./2017 OF LAW THAT MENTIONING OF WRONG PROVISION OR NON-ME NTIONING OF PROVISION DOES NOT INVALIDATE AN ORDER IF THE COURT AND/OR STATUTORY AUTHORITY HAD THE REQUISITES JURISDICTION THEREFORE . IN RAM SUNDER RAM V. UNION OF INDIA &ORS. (2007) 9 SCA LE 197, IT WAS HELD THAT IT APPEARS THAT THE COMPETENT AUT HORITY HAS WRONGLY QUOTED SECTION 20 IN THE ORDER OF DISCHARGE WHEREAS, IN FACT, THE ORDER OF DISCHARGE HAS TO BE READ HAVING BEEN P ASSED UNDER SECTION 22 OF THE ARMY ACT. IT IS WELL SETTLED THAT IF AN AUTHORITY HAS A POWER UNDER THE LAW MERELY BECAUSE WHILE EXERCISI NG THAT POWER THE SOURCE OF POWER IS NOT SPECIFICALLY REFERRED TO OR A REFERENCE IS MADE TO A WRONG PROVISION OF LAW, THAT BY ITSELF DO ES NOT VITIATE THE EXERCISE OF POWER SO LONG AS THE POWER DOES EXIST A ND CAN BE TRACED TO A SOURCE AVAILABLE IN LAW. THUS, QUOTING OF WRON G PROVISION OF SECTION 20 IN THE ORDER OF DISCHARGE OF THE APPELLA NT BY THE COMPETENT AUTHORITY DOES NOT TAKE AWAY THE JURISDIC TION OF THE AUTHORITY UNDER SECTION 22 OF THE ARMY ACT. THEREFO RE, THE ORDER OF DISCHARGE OF THE APPELLANT FROM THE ARMY SERVICE CA NNOT BE VITIATED ON THIS SOLE GROUND AS CONTENDED BY THE APPELLANT. IN N. MANI V. SANGEETHA THEATRES & 0RS.(2004) 12 SCC 2 78, IT WAS HELD THAT IT IS WELL SETTLED THAT IF AN AUTHORI TY HAS A POWER UNDER THE LAW MERELY BECAUSE WHILE EXERCISING THAT POWER THE SOURCE OF POWER IS NOT SPECIFICALLY REFERRED TO OR A REFERENCE IS MADE TO A WRONG PROVISION OF LAW, THAT BY ITSELF DOES NO T VITIATE THE EXERCISE OF POWER SO LONG AS THE POWER DOES EXIST A ND CAN BE TRACED TO A SOURCE AVAILABLE IN LAW. ON MERITS, IT CAN BE SAID THAT THE USE OF WORDS 'AN Y EXPENDITURE' IN SECTION 69C INDICATES THAT THE SAID SECTION IS VERY WIDELY WORDED AND THE ASSESSING OFFICER IS NOT PRECLUDED FROM MAK ING ENQUIRIES ABOUT THE SAME IF HE IS HAVING DOUBT ON SOURCE OF S UCH EXPENDITURE. MERE FACT THAT THE PAYMENT WAS MADE BY ACCOUNT PAYE E CHEQUES DID NOT PROVE THAT THE TRANSACTION WAS GENUINE. IT IS A SETTLED PRINCIPLE OF LAW THAT THE PARTIES WHO MAKE CLAIM, B URDEN LIES UPON SUCH PARTIES TO PROVE AND SUBSTANTIATE ITS CLAIM. I N THE INSTANT CASE, ADMITTEDLY, APPELLANT-COMPANY CLAIMED COMMISSION EX PENSES PAID TO VARIOUS PARTIES. THE ASSESSING OFFICER WANTED TO VERIFY THE GENUINENESS OF TRANSACTIONS AND THEREFORE, ASKED TH E APPELLANT TO PRODUCE PAYEE OF COMMISSION, BUT APPELLANT FAILED T O DO SO. THEREAFTER, ASSESSING AUTHORITY ISSUED A SUMMON UND ER SECTION 131 BUT NO ONE APPEARED IN PURSUANCE THEREOF. THUS, IN INSTANT CASE, THE ASSESSING OFFICER HAD GIVEN SUFFICIENT OPPORTUNITY TO APPELLANT TO PRODUCE THOSE PARTIES AND PROVE GENUINENESS OF TRAN SACTIONS. HOWEVER, DESPITE EFFORTS BY ASSESSING OFFICER, APPE LLANT FAILED TO PRODUCE THOSE PARTIES. THUS, THE APPELLANT FAILED T O PROVE THE GENUINENESS OF THE COMMISSION PAYMENT AND IDENTITY OF VARIOUS PARTIES TO WHOM COMMISSION WAS PURPORTEDLY PAID BY APPELLANT. IN 9 ITA NO.6400/DEL./2017 VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF CASE, DISA LLOWANCE OF COMMISSION EXPENSES AMOUNTING TO RS. 48,07,109/- MA DE BY THE ASSESSING OFFICER IS UPHELD. IN SUPPORT THEREOF, RELIANCE IS PLACED ON FOLLOWING DECISION OF JURISDICTIONAL HIGH COURT: IN KAHANUDYOGV. COMMISSIONER OF INCOME-TAX (2013) 3 8 TAXMANN.COM 261 (DELHI), REVENUE FOUND AND SEIZED V ARIOUS PAPERS OF UNACCOUNTED EXPENDITURE OF INVENTORIES AT BUSINE SS PREMISES OF ASSESSEE. THESE EXPENSES WERE NOT RECORDED IN BOOKS OF ACCOUNT. THE ASSESSING OFFICER MADE ADDITIONS OF RS. 7.63 LA KHS UNDER SECTION 69C AND TAXED IT AS UNACCOUNTED EXPENDITURE . IN APPEAL, THE COMMISSIONER (APPEALS) AND THE TRIBUNAL CONFIRMED T HE ADDITION EXCEPT GIVING RELIEF TO THE EXTENT OF RS. 1,50,000. IT WAS HELD THAT THE APPELLANT HAS NOT FURNISHED DETAILS OR EXPLAINED NA TURE AND PURPOSE BEHIND THE EXPENDITURE1. SOME EXPENSES HAVE BEEN I NCURRED TOWARDS KABADI, ETC. NAMES OF PERSONS DO FIND MENTI ON BUT THE NATURE OF ACTIVITIES UNDERTAKEN, WHY AND FOR WHAT P URPOSE THE PAYMENT WAS MADE, ARE NOT KNOWN. IT WAS FOR THE APP ELLANT TO PRODUCE RELEVANT MATERIAL OR PRODUCE THE SAID PERSO N TO JUSTIFY THE PAYMENT AND SHOW AND ESTABLISH THAT THE EXPENSE WAS NOT PERSONAL IN NATURE BUT RELATED TO OR WAS PERTAINING TO UNACC OUNTED BUSINESS. NO ONE MENTIONED IN THE LIST HAD APPEARED BEFORE TH E ASSESSING OFFICER TO TESTIFY AND EXPLAIN THE NATURE AND CHARA CTER OF THE SAID PAYMENTS. THE APPELLANT HAS ACCEPTED THAT THESE TRA NSACTIONS WERE NOT RECORDED IN THE BOOKS. THE APPELLANT RAN AND TO OK THE RISK WHEN HE ENTERED INTO THESE TRANSACTIONS AND, THEREFORE, SHOULD FACE THE CONSEQUENCES PRESCRIBED AND MANDATED UNDER SECTION 69C. THUS, ORDER OF THE TRIBUNAL WAS UPHELD. LASTLY, THE DECISION OF HONBLE SUPREME COURT IN CAS E OF COMMISSIONER OF INCOME-TAX V. ORISSA CORPN, (P.) LTD . (1986) 25 TAXMAN 80F (SC) RELIED UPON BY APPELLANT DOES NOT SUPPORT APPELLANT'S CASE AS ORISSA CORPN. CASE [SUPRA) WAS RELATED TO SECTION 68, WHEREAS, INSTANT CASE RELATES TO ADDITI ON ON ACCOUNT UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE IN COME-TAX ACT, 1961. THE DECISION OF JURISDICTIONAL DELHI HIGH COURT PRO NOUNCED IN COMMISSIONER OF INCOME-TAX V. RADHIKA CREATION (2011) 10 TAXMANN.COM 138 (DELHI), WILL NOT SUPPORT CASE OF APPELLANT AS IN THAT CASE ADDITION WAS MADE MERELY ON THE BASIS THA T SAID EXPENDITURE WAS NOT AUTHENTICATED BY VOUCHERS, WHER EAS, IN INSTANT CASE, GENUINENESS OF COMMISSION PAYMENT ITSELF WAS IN DOUBT AND APPELLANT COULD NOT PROVE IT BY PRODUCING PAYEES OF COMMISSION EXPENSES. 10 ITA NO.6400/DEL./2017 6.4 WE HAVE PERUSED THE FINDING OF THE LOWER AUTHORITI ES. THE ASSESSEE WAS REQUIRED TO JUSTIFY THE PAYMENT OF COM MISSION EXPENSES. THE ASSESSING OFFICER POINTED OUT DISCREP ANCY IN THE INFORMATION FILED BY THE ASSESSEE ON BEHALF OF THOS E PERSONS AND ASKED THE ASSESSEE TO PRODUCE THOSE PARTIES FOR VER IFICATION OF THE SERVICES RENDERED BY THEM FOR WHICH THEY WERE GIVEN COMMISSION BY THE ASSESSEE. WE FIND THAT NO SUCH DETAILS OF TH E PROPERTY, WHICH HAS BEEN SOLD THROUGH THOSE PERSONS, HAVE BEE N FILED BY THE ASSESSEE TO JUSTIFY THE SERVICES RENDERED BY TH EM DESPITE DUE OPPORTUNITY PROVIDED TO THE ASSESSEE. THE ASSESSEE FAILED TO DISCHARGE ITS OBLIGATION, AND THEREFORE, ON SUCH CI RCUMSTANCES, THE LEARNED CIT(A) IS JUSTIFIED IN SUSTAINING THE D ISALLOWANCE. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARN ED CIT(A) ON THE ISSUE IN DISPUTE. ACCORDINGLY, WE UPHOLD THE SAME. GROUNDS OF APPEAL OF THE ASSESSEE ARE ACCORDINGLY DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH, 2021 SD/- SD/- (AMIT SHUKLA) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 TH MARCH, 2021. RK/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI