JYOTI IMPEX, BANGALORE V. ITO WD 22(1)(2), MUMBAI

ITA 6534/MUM/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84526 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2010-2011
• Appeal Filed On: 28-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LAV KUMAR
• Assessee Lawyers: HARISH V S

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.6534/MUM/2014 (A.Y.2010-11) M/S. JYOTI IMPEX, NO.207, ZEST BUSINESS SPACES, M.G.ROAD, GHATKOPAR (EAST), MUMBAI 400 007. PAN: AAFFJ 8683D (APPELLANT ) VS. INCOME TAX OFFICER, WARD 22(1)(2),MUMBAI (RESPONDENT) APPELLANT BY : SHRI HARISH V. S RESPONDENT BY : SHRI LAV KUMAR DATE OF HEARING : 18/12/2014 DATE OF PRONOUNCEMENT : 18 /12/2014 ORDER PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-33, MUMBAI DATED 25/08/2014 FOR ASSE SSMENT YEAR 2010-11. GROUNDS OF APPEAL READ AS UNDER: 6. THE IMPUGNED ORDER IS BAD IN LAW. 7. THE IMPUGNED ORDER IS CONTRARY AND OPPOSED TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE FIRST APPELLATE AUTHORITY HAS ERRED IN DISAL LOWING OF COMMISSION PAID TO THE LOCAL PARTIES AMOUNT TO A SUM OF RS.18,87,802/-. 9. THE FIRST APPELLATE AUTHORITY HAS ERRED IN MAKI NG AN ADHOC DISALLOWANCE @ 10% IN RESPECT OF CONVEYANCE, TRAVELING, STAFF WELFARE, TE LEPHONE AND BUSINESS PROMOTION EXPENSES. 10, THE FIRST APPELLATE AUTHORITY FAILED TO APPRECI ATE THE FACTS, THE EVIDENCES SUBSTANTIATING THE DEDUCTION OF EXPENSES. ITA NO.3608/MUM/2013 (A.Y.2008-09 2 11. THE APPELLANT RESERVES ITS LIBERTY TO FILE ADDI TIONAL STATEMENT OF FACTS/ GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. IN EARLIER PART OF GROUNDS I.E. SL. NO.1 TO 5, T HE STATEMENT OF FACTS ARE DESCRIBED BY THE ASSESSEE. THE EFFECTIVE GROUNDS OF APPEAL WHICH WERE ARGUED BEFORE US ARE ONLY GROUND NO.8 & 9, REST OF THE GROUNDS WERE NOT EVEN ARGUED, THEREFORE, THE REST OF THE GROUNDS ARE NOT CONSIDERED FOR ADJUDICATION. 3. IN GROUND NO.8, THE ASSESSEE IS AGITATING THE D ISALLOWANCE UPHELD BY LD. CIT(A) WITH REGARD TO COMMISSION PAID TO LOCAL PART IES AMOUNTING TO RS.18,87,802/-. SUCH DISALLOWANCE HAS BEEN UPHELD BY LD. CIT(A) ON THE BASIS OF DECISION OF ITAT IN ASSESSEES OWN CASE FOR A.Y 2009-10. AT THE OUTSET , IT WAS SUBMITTED BY LD. DR THAT GROUND NO.8 IS COVERED AGAINST THE ASSESSEE. HE HA S PRODUCED BEFORE US THE ORDER OF THE TRIBUNAL WHICH IS DATED 3/5/2013 IN ITA NO.1 671/MUM/2013, WHICH IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT OBSERVA TIONS OF TRIBUNAL ARE AS UNDER: 4. AS REGARDS THE COMMISSION ON DOMESTIC PURCHASES AMOUNTING TO RS.18.73 LAKH CONCERNED, THE LEARNED AR ADMITTED THAT THERE WAS N O EVIDENCE OF RENDERING ANY SERVICES BY THESE SO CALLED COMMISSION AGENTS. IN S PITE OF THAT, HE RELIED ON CERTAIN DECISIONS TO CANVASS A VIEW THAT NOTWITHSTANDING TH ERE BEING NO EVIDENCE OF RENDERING OF SERVICES, THE DEDUCTION SHOULD BE ALLOWED MERELY ON THE FACT THAT THE PAYMENT WAS MADE THROUGH BANKING CHANNEL. IN OUR CONSIDERED OPI NION, THE FACTS OF THE CASES RELIED ON BY THE LEARNED AR ARE DISTINGUISHABLE AND ARE NO T GERMANE TO THE ISSUE UNDER CONSIDERATION. IT IS A FUNDAMENTAL PROPOSITION THAT THE ONUS OF PROVING THE RENDERING OF SERVICES IS ON THE ASSESSEE FOR A GENUINE CLAIM OF DEDUCTION ON ACCOUNT OF COMMISSION. AS THE ASSESSEE HAS FAILED TO LEAD ANY EVIDENCE IN RESPECT OF SERVICES PROVIDED BY THESE PERSONS, WE ARE OF THE CONSIDERED OPINION THAT NO D EDUCTION CAN BE ALLOWED FOR A SUM OF RS.18.73 LAKH. WE ORDER ACCORDINGLY. THIS GROUND IS , THEREFORE, PARTLY ALLOWED. 4. THOUGH LD. AR SUBMITTED THAT FACTS ARE DIFFERENT BU T IT WAS NOT DEMONSTRATED THAT HOW THESE FACTS ARE DIFFERENT. AS AGAINST THAT LD. CIT(A) HAS RECORDED A FINDING THAT ON IDENTICAL FACTS ITAT IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2009-10 HAS DECIDED THIS ISSUE AGAINST THE ASSESSEE. 5. IN THIS VIEW OF THE SITUATION AFTER HEARING BOTH THE PARTIES, RESPECTFULLY FOLLOWING THE AFOREMENTIONED DECISION WE DISMISS THIS GROUND. ITA NO.3608/MUM/2013 (A.Y.2008-09 3 6. APROPOS GROUND NO.9, A SUM OF RS.11,27,438/- WAS CLAIMED BY THE ASSESSEE ON ACCOUNT OF EXPENSES INCURRED ON CONVEYANCE, TRA VELING, STAFF WELFARE, TELEPHONE AND BUSINESS PROMOTION ETC. ON EXAMINATION OF THE DETAILS FURNISHED BY THE ASSESSEE THE AO OBSERVED THAT ASSESSEE DID NOT FURNISH DETAI LS OF STAFF WELFARE AND TELEPHONE EXPENSES. IN RESPECT OF TRAVELING EXPENSES, THE AS SESSEE MERELY FILED A LEDGER ACCOUNT WITHOUT GIVING ANY DETAILS OF PLACES VISITED, NAMES OF THE PERSONS TRAVELED AND THE BUSINESS EXPEDIENCY IN CONNECTION WITH THE TRAVEL. THE AO FURTHER FOUND THAT CONVEYANCE AND BUSINESS PROMOTION EXPENSES WERE E NTIRELY MADE IN CASH AND NO COPY OF BILLS HAVE BEEN FURNISHED AND IT IS IN THIS MANNER AO DISALLOWED 15% OF THE EXPENDITURE AT A SUM OF RS.1,69,116/-. BEFORE LD. CIT(A) IT WAS SUBMITTED THAT ASSESSEE IS MAINTAINING PROPER BOOKS OF ACCOUNTS AN D ITS ACCOUNTS ARE AUDITED UNDER SECTION 44AB OF THE ACT. THUS, IT WAS CLAIME D THAT DISALLOWANCE MADE BY THE AO WAS NOT SUSTAINABLE IN LAW. ON THESE SUBMISSION S, LD. CIT(A) THOUGH HAS NOT ACCEPTED THE SUBMISSIONS IN THEIR ENTIRETY BUT HA S REDUCED THE DISALLOWANCE FROM 15% TO 10%. THE ASSESSEE IS AGGRIEVED, HENCE HAS R AISED GROUND NO.9. 7. WE HAVE HEARD BOTH THE PARTIES AND AFTER CAREFUL CONSIDERATION, WE FIND THAT IN ABSENCE OF DETAILS FURNISHED BY THE ASSESSEE BEFORE AO, LD. CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO 10%. WE DECLINE T O INTERFERE. THIS GROUND OF THE ASSESSEE IS ALSO DISMISSED. 8. BEFORE PARTING WE MAY MENTION HERE THAT APPEAL F ILED BY ASSESSEE BEFORE LD. CIT(A) HAS BEEN PARTLY ALLOWED AND IT HAS NOT BEEN BROUGHT TO OUR NOTICE BY THE REVENUE THAT WHETHER ANY APPEAL HAS FILED BY THE RE VENUE ALSO AGAINST THE IMPUGNED ORDER OF LD. CIT(A). THEREFORE, WE HAVE HEARD THIS APPEAL ON THE BASIS THAT DEPARTMENT DID NOT FILE ANY APPEAL AGAINST THE IMPU GNED ORDER PASSED BY LD. CIT(A). IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL FILED B Y THE ASSESSEE IS DISMISSED. ITA NO.3608/MUM/2013 (A.Y.2008-09 4 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/12/2014 ! ' #$ % &'( 18/12/2014 ' ) SD/- SD/- ( /SANJAY ARORA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; &' DATED 18/12/2014 ! ! ! ! ' '' ' *+, *+, *+, *+, -,$+ -,$+ -,$+ -,$+ / COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. *0./ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. ,2) *+' , , / DR, ITAT, MUMBAI 6. )3 4 / GUARD FILE. !' !' !' !' / BY ORDER, 0,+ *+ //TRUE COPY// 5 55 5 / 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . ./ VM , SR. PS