DCIT 17(2), MUMBAI V. HEMANT U. DOKE, MUMBAI

ITA 7104/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4151 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 07-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VACHASPATI TRIPATHIDR
• Assessee Lawyers: ASHOK L SHARMAAR
• Section: 143(3)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI H BENCH BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & RAM LAL NEGI,JUDICIAL MEMBER /.ITA NO.7104/MUM/2013, /ASSESSMENT YEAR-2009-10 DY. CIT-17(2) ROOM NO.217, 2 ND FLOOR PIRAMAL CHAMBERS, MUMBAI-400 012. VS. SHRI HEMANT U. DOKE 43/7, SAHAKAR NAGAR, NAIGAUM X ROAD, WADALA (W) MUMBAI-400 031. PAN:ANUPD 9027 F ( / APPELLANT) ( / RESPONDENT) /ASSESSEE BY : SHRI ASHOK L. SHARMA-AR / REVENUE BY : SHRI VACHASPATI TRIPATHI-DR / DATE OF HEARING : 27.01.2016 / DATE OF PRONOUNCEMENT : 27.01.2016 , 1961 1961 1961 1961 254 254 254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DTD.24.09.2013 OF THE CIT(A)- 29,MUMBAI THE ASSESSING OFFICER (AO) HAS FILED THE PRESENT APPEAL. ASSESSEE,AN INDIVIDUAL,IS ENGAGED IN THE BUSINESS O F CARRYING OUT LIASONING WORK WITH BUILDERS AND DEVELOPERS,FILED ITS RETURN OF INCOME ON 29/09/ 2009,DECLARING TOTAL INCOME AT RS. 75.84 LAKHS. THE AO COMPLETED THE ASSESSMENT U/S. 143(3) OF THE ACT ON 23.12.2011,DETERMINING THE INCOME OF THE ASSESSEE AT RS. 2.01 CRORES. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT DELETION OF THE ADDITION MADE BY THE AO,AMOUNTING TO RS. 1.22 CRORES UNDER THE HEAD COMPENSATION PAYMENT.DUR ING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD SHOWN TOTAL PROFESSIONA L FEES RECEIVED AT RS.2.25 CRORES,THAT HE HAD CLAIMED EXPENDITURE OF RS.1,22,00,000/- ON ACCOUNT OF PAYMENT MADE TO CERTAIN PARTIES,THAT IN THE EARLIER YEAR THE ASSESSEE HAD PAID COMPENSATION OF RS.45 LAKHS.HE DIRECTED THE ASSESSEE TO FILE ORIGINAL VOUCHERS IN SUPPORT OF CLAIM OF PAYME NT OF COMPENSATION AND ALSO CONFIRMATION FROM THE ABOVE PARTIES OF HAVING RECEIVED THE COMP ENSATION ALONG WITH TDS CERTIFICATES U/S.194LA OF THE ACT FOR THE COMPENSATION PAID.THE ASSESSEE FILED COPIES OF THE VOUCHERS FOR THE COMPENSATION PAID.HOWEVER, THE AO DID NOT ACCEPT TH E ABOVE ARGUMENTS OF THE ASSESSEE AND HELD THAT ORIGINAL VOUCHERS WERE NOT FILED,THAT NO CONFIRMATION FOR THE PAYMENT OF COMMISSION WAS FURNISHED,THAT THE PAYMENTS MADE FOR COMPENSATI ON TO ALL THE PARTIES WERE BEYOND THE YEAR UNDER CONSIDERATION I.E.BEYOND 31.03.2009, THAT THE RE WAS NO EVIDENCE OF PAYMENT OF RS.73 LAKHS,THAT THE ASSESSEE HAD FAILED TO DEDUCT TAX AT SOURCE U/S.194LA ON THE COMPENSATION PAID,THAT AS PER THE PROVISIONS OF SECTION 40(A)(IA )OF THE ACT THE EXPENDITURE CLAIMED BY THE ASSESSEE WAS NOT ALLOWABLE.FINALLY,HE DISALLOWED TH E COMPENSATION PAYMENT OF RS.1.22 CRORES,CLAIMED BY THE ASSESSEE. ITA/7104/M/13,AY.09-10-HEMANT DOKE 2 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).BEFORE HIM IT WAS CONTENDED THAT PR OVISIONS OF SECTION 194LA WAS NOT APPLICABLE TO HIS CASE,THAT THE SAID SECTION DEALT WITH COMPULSORY ACQUISITION OF LAND BY THE STATE,THAT THE AO HAD WRONGLY INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, THAT THE ASSESSEE HAD PAID COMPENSATION TO THE TENANTS. AFTE R CONSIDERING THE ASSESSMENT ORDER AND THE SUBMISSION OF THE ASSESSEE, THE FAA HELD THAT THE A SSESSEE HAD FILED AFFIDAVITS OF THE PERSONS TO WHOM COMMISSION WAS PAID, THAT IT WAS ACCRUED LIABI LITY, THAT LIABILITY WAS QUANTIFIED DURING THE YEAR UNDER CONSIDERATION.HE REFERRED TO THE CASE OF BHARAT EARTH MOVERS (245 ITR 428) AND ALLOWED THE APPEAL FILED BY THE ASSESSEE. 4. DURING THE COURSE OF HEARING BEFORE US,THE DEPARTME NTAL REPRESENTATIVE(DR) ARGUED THAT ORIGINAL VOUCHERS WERE NOT PRODUCED IN SUPPORT OF T HE CLAIM MADE BY THE ASSESSEE,THAT BANK DETAILS DID NOT SHOW PAYMENT OF RS.73 LAKHS, THAT T HERE WAS LONG TIME GAP(6 MONTHS TO 30 MONTHS) BETWEEN THE LIABILITY AND PAYMENT,THAT RELE VANT AGREEMENT WAS NOT FURNISHED FOR VERIFICATION. THE AUTHORISED REPRESENTATIVE(AR) CON TENDED THAT THE ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUTING,THAT THE LIABILITY HAD ACCRUED DURING THE YEAR UNDER APPEAL, THAT PAYMENTS WERE MADE IN SUBSEQUENT YEARS,THAT ALL THE NECESSARY DETAILS WERE MADE AVAILABLE TO THE AO.HE REFERRED TO THE STATEMENT OF FACTS FILED BEFO RE THE FAA. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD.WE FIND THAT THE AO HAD DISALLOWED THE COMMISSION EXPENDITURE AS CERTAI N DETAILS WERE NOT FILED,THAT IN THE STATEMENT OF FACTS THE ASSESSEE HAD MENTIONED THAT HE HAD FUR NISHED PAYMENT VOUCHERS, THAT THE FAA HAD ADMITTED THE AFFIDAVITS FILED BY THE ASSESSEE ON BE HALF OF THE RECIPIENTS OF THE COMMISSION,THAT HE HAD NOT FORWARDED THOSE DOCUMENTS TO THE AO FOR VER IFICATION,THAT HE HAD NOT INVOKED PROVISIONS OF RULE 41 OF THE INCOME TAX RULES,1961(RULES)WHILE RELYING UPON THE AFFIDAVITS.IN THESE PECULIAR CIRCUMSTANCES WE ARE OF THE OPINION THAT T HE MATTER NEEDS FURTHER VERIFICATION.SO, IN THE INTEREST OF THE JUSTICE,WE ARE RESTORING BACK THE I SSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION.HE IS DIRECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE.THE ASSESSEE WOULD FILE ALL THE RELEVANT DETAILS AND DO CUMENTS BEFORE THE AO.EFFECTIVE GROUND OF APPEAL FILED BY THE AO,IS ALLOWED IN HIS FAVOUR,IN PART. AS A RESULT,APPEAL FILED BY THE AO STANDS PARTLY AL LOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JANUARY, 2016. 27 TH , 2016 SD/- SD/- ( /RAM LAL NEGI) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE: 27 .01. 2016 . . . .. . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / ITA/7104/M/13,AY.09-10-HEMANT DOKE 3 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.