ITO 25(3)(1), MUMBAI V. BHARAT J JIVANI, MUMBAI

ITA 6692/MUM/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4450 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 02-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANDHIR GUPTA
• Assessee Lawyers: VAISHALI MEHTA
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI BEFORE SHRI JOGINDER SINGH, JM AND SHRI RAJESH KUMA R, AM ./ I.T.A. NO. 6692/MUM/2012 ( / ASSESSMENT YEAR: 2005-06) INCOME TAX OFFICER 25(3)(1), MUMBAI ROOM NO. 307, 3 RD FLOOR, BLDG. C-11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI 400 051. / VS. SHRI. BHARAT J. JIVANI A74, BARKHA BAHAR, THAKUR COMPLX, KANDIVALI (EAST), MUMBAI 400 101. ./ ./PAN/GIR NO. ABTPJ 7032M ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI RANDHIR GUPTA / RESPONDENT BY : SHRI VAISHALI MEHTA / DATE OF HEARING : 19/10/2015 !'# / DATE OF PRONOUNCEMENT : 06/01/2016 $% / O R D E R PER RAJESH KUMAR, A. M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 13.01.2010 OF COMMISSIONER OF INCOME TAX (APPEALS)-35, MUMBAI (HE REINAFTER CALLED AS THE CIT(A) ) FOR ASSESSMENT YEAR 2005-06.THE ASSESSEE H AS RAISED FOLLOWING GROUNDS OF APPEAL: 2 ITA NO.6692/MUM/2012 ITO VS SHRI. BHARAT J. JIVANI (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) FAILED TO CONSIDER THE REMAND REPORT OF THE A.O. WH EREIN IT WAS STATED THAT EXPENSES OF COMMON IN NATURE HAVE BEEN DEBITED TO P & L A/C AS WELL AS DMA SUBVENTION. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) ERRED IN DELETING THE ADDITION OF RS.15,91,999/- WH ICH WAS BASED ON COMMISSION RECEIVED AS PER TDS CERTIFICATE FILED BY THE ASSESSEE. 2. THE COMMON ISSUE RAISED IN ALL THE GROUNDS OF APPEA L IS AGAINST THE DELETION OF ADDITION OF RS. 15,91,999/- BY THE CIT(A) BY NOT CONSIDERING THE REMAND REPORT OF THE AO. THE BRIEF FACTS OF THE CASE ARE T HAT THE ASSESSEE WAS RUNNING PROPRIETARY BUSINESS IN THE NAME AND STYLE OF M/S. UNLIMITED OPTIONS AUTO MALL, WHICH WAS A FRANCHISEE/AGENT FOR ICICI BANK L D. FOR SOURCING LOANS FOR USED AND NEW CARS ON COMMISSION BASIS. DURING THE Y EAR THE ASSESSEE FILED HIS RETURN OF THE INCOME AT RS.4,65,268/- ON 31.10.2005 . THE CASE OF THE ASSESSEE WAS REOPENED BY ISSUING NOTICE U/S 148 OF THE ACT D ATED 27.01.2009 ON THE GROUND THAT THE COMMISSION AS PER TDS CERTIFICATES WAS RS.59,22,903/- WHEREAS THE COMMISSION AS PER THE PROFIT & LOSS ACC OUNT WAS ONLY RS.46,53,657/-AND THE DIFFERENCE WAS SOUGHT TO BE A SSESSED BY RE-OPENING THE CASE WHICH WAS DONE IN SUMMARY ASSESSMENT. THE LD. AO FRAMED THE 3 ITA NO.6692/MUM/2012 ITO VS SHRI. BHARAT J. JIVANI ASSESSMENT VIDE ORDER DATED 31.11.2009 BY MAKING A DDITIONS INTER ALIA OF RS.15,91,999/- FOR THE DIFFERENCE BETWEEN THE TDS CERTIFICATES AND I.T. RETURN AS PER PARA 4 OF THE ASSESSMENT ORDER BY REJECTING THE REPLY OF THE ASSESSEE THAT HE HAD CREDITED THE NET AMOUNT OF COMMISSION TO THE PROFIT AND LOSS A/C AFTER DEBITING THE DMA SUBVENTION RS. 8,91,253/-AND FINA NCE DISCOUNT OF RS. 7,00,746/- TO VARIOUS CLIENTS. 3. THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSE E AFTER CONSIDERING THE FINAL REMAND REPORT OF THE AO BY OBSERVING THAT THE AO HA D NOT COMMENTED ADVERSELY AGAINST THE APPELLANT AND THAT THE ADDITI ON MADE BY THE AO WAS ON ACCOUNT OF MISAPPRECIATION OF FACTS IN RESPECT OF D MA SUBVENTION/ FINANCE AND COMMISSION PAID. THE LD. DR RELIED ON THE ORDER OF THE AO AND SUBMITTED THAT THE ASSESSEE HAD NOT ACCOUNTED THE COMMISSION AS PE R TDS CERTIFICATES AND THEREFORE THE AO HAD RIGHTLY MADE THE ADDITION. THE LD. AR ON THE OTHER HAND SUBMITTED THAT THE ASSESSEE HAS ACCOUNTED FOR THE C OMMISSION RECEIVED AT NET AMOUNT AFTER SUBTRACTING THE DMA SUBVENTION/ FINANC E DISCOUNTS PAID TO THE TUNE OF RS. 15,91,999/- TO VARIOUS CLIENTS BY ACCOU NT PAYEE CHEQUES AND VEHEMENTLY ARGUED THAT THE FULL AMOUNT OF COMMISSI ON WAS ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE LD. AR F ILED THE COPIES OF THE LEDGER 4 ITA NO.6692/MUM/2012 ITO VS SHRI. BHARAT J. JIVANI ACCOUNTS IN RESPECT OF THE SAID FINANCE DISCOUNTS OF RS.7,00,746/- AND DMA SUBVENTION OF RS.8,91,253/- AT PAGE NO 31 TO 33 AND 34 TO 37 OF THE PAPER BOOK. THE COPY OF LEDGER ACCOUNT IN RESPECT OF COMM ISSION INCOME WAS ALSO FILED AT PAGE NO 27 TO 30 OF THE PAPER BOOK WHICH ACCOUNTED FOR THE GROSS COMMISSION OF RS. 74,13,162.26 IN THE CREDIT SIDE AND ALSO VARIOUS DEBIT ADJUSTMENT ENTRIES AMOUNTING TO RS. 27,59,509.48 WH ICH INCLUDED THE FINANCE DISCOUNTS PAID OF RS. 7,00,746/- AND THE DMA SUB VENTION OF RS. 8,91,253.48. THE LD. COUNSEL ALSO REFERRED TO PARA 6 OF THE REMA ND REPORT DATED 31.03.2012 WHICH IS PLACED AT PAGE NO. 18 OF THE PAPER BOOK WH ICH STATED DMA SUBVENTION AND THE OTHER EXPENSES WERE SEPARATE AND THERE WAS THE NO DUPLICATION OF THE SAME HAD TAKEN PLACE. THE LD. AR FINALLY PRAYED BEF ORE US THAT IN VIEW OF THESE FACTS THE ORDER OF THE CIT(A) DID NOT REQUIRED TO B E INTERFERED WITH AND THE SAME DESERVED TO BE UPHELD. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND FROM THE RECORDS BEFORE US THAT THE ASSESSEE H AD ACCOUNTED FOR THE COMMISSION RECEIVED FULLY IN HIS BOOKS OF ACCOUNTS AS IS CLEAR FROM THE COPY OF LEDGER ACCOUNT IN RESPECT OF COMMISSION INCOME FILE D AT PAGE NO. 27-30 OF THE PAPER BOOK. IT IS CLEAR THAT THE ASSESSEE BOOKED T HE ENTIRE COMMISSION IN HIS 5 ITA NO.6692/MUM/2012 ITO VS SHRI. BHARAT J. JIVANI BOOKS OF ACCOUNTS AND AT THE YEAR END MADE SOME D EBIT ADJUSTMENTS BY TRANSFERRING FINANCE DISCOUNTS OF RS. 7,00,746/- AND DMA SUBVENTION OF RS. 8,91,253.48 WHICH WERE FILED AT PAGE NO. 30-33 AN D 34-37 RESPECTIVELY. WE ALSO OBSERVED FROM THE REMAND REPORT PARA 6 PLACED AT PAGE NO. 18 OF THE PAPER BOOK THAT EACH AND EVERY CLAIM WAS SUPPORTED BY EN TRY IN THE BOOKS OF ACCOUNTS WITH THE NAME OF THE PERSON TO WHOM THE FI NANCIAL DISCOUNT WAS GIVEN AND SUPPORTED BY CORRESPONDING ENTRIES IN THE LEDGE R. IT IS ALSO MENTIONED IN THE SAID REPORT THAT THE DMA SUBVENTION/ FINANCE CHARGE S WERE OVER AND ABOVE AND THE OTHER EXPENSES INCURRED BY THE ASSESSEE. IN VIE W OF THE FACTS WE ARE OF THE CONSIDERED VIEW THAT THE ORDERS PASSED BY THE CIT(A ) IS CORRECT AND DOES NOT REQUIRE ANY INTERFERENCE. WE, THEREFORE, UPHELD THE ORDER OF THE CIT(A) BY DISMISSING THE APPEAL OF THE ASSESSEE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6TH JANUARY, 2016 SD/- SD/- (JOGINDER SINGH) (RAJESH KUMAR) &' $ / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER ( ) MUMBAI; *$ DATED : 06.01.2016 PS. ASHWINI GAJAKOSH 6 ITA NO.6692/MUM/2012 ITO VS SHRI. BHARAT J. JIVANI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. ./0 ''12 , 12# , ( ) / DR, ITAT, MUMBAI 6. 045 6 / GUARD FILE / BY ORDER, / !'# (DY./ASSTT. REGISTRAR) #$ %, ( ) / ITAT, MUMBAI