M/s. Satyam Polyplast, Jaipur V. Assistant Commissioner of Income Tax, Circle-4, Jaipur

ITA 757/JPR/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4053 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 30-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Assessee Lawyers: V K JAIN
• Keywords: Corroborative evidences

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 757/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2014-15 SATYAM POLYPLAST G-1/41, VKI AREA, JAIPUR CUKE VS. ACIT, CIRCLE-4, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AASFS7334R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI V. K. JAIN (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI J. C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 08/10/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 10/10/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 14.03.2018 FOR A.Y. 2014-15 WHEREIN THE ASSESSEE HAS CHALLENGED THE SUSTENANCE OF DISALLOWA NCE OF COMMISSION PAYMENT OF RS. 7,82,794/- PAID TO TWO NON-RESIDENTS . 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSER VED THAT THE ASSESSEE HAS MADE PAYMENT OF RS. 37,98,014/- TO VAR IOUS NON-RESIDENTS WITHOUT DEDUCTING TDS AND DISALLOWANCE WAS MADE U/S 40(A)(IA) OF THE ACT. ITA NO. 757/JP/2018 SATYAM POLYPLAST, JAIPUR VS. ACIT, JAIPUR 2 3. ON APPEAL, THE LD. CIT(A) OBSERVED THAT THERE IS NO LIABILITY TO DEDUCT TAX AT SOURCE ON THE COMMISSION PAYMENT U/S 195 AND THE PROVISION OF SECTION 40(A)(I) ARE NOT APPLICABLE. H OWEVER, AT THE SAME TIME, THE ASSESSEE WAS ASKED TO PRODUCE THE DETAILS OF PAYMENT MADE TO THESE NON-RESIDENT AGAENTS AND TO ESTABLISH LINK AGE TO THE BILLS RAISED FOR SERVICES RENDERED BY THEM. THE LD. CIT(A) OBSER VED THAT WHILE CONFIRMATION ESTABLISHING THE IDENTITY HAVE BEEN FI LED FOR ALL THE PARTIES, THE DETAILS OF BILLS HAVE BEEN FILED ONLY IN THE CA SE OF TWO PARTIES, MR. CLAUDIO HABERL AND MR. HABIBUR RAHMAN. FURTHER THES E PARTIES HAD BEEN PAID SALES COMMISSION IN THE PREVIOUS YEAR ALS O. IN VIEW OF THE SAME, ADDITION MADE IN RESPECT OF MR. CLAUDIO HABER L AND MR. HABIBUR RAHMAN WAS ALLOWED BUT THE AMOUNT PAID TO THE OTHER TWO PARTIES WAS DISALLOWED. NOW THE ASSESSEE IS IN APPEAL BEFORE US . 4. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT WHEN THE VERY BASIS OF DISALLOWANCE MADE BY THE AO I.E. APPL ICABILITY OF SECTION 40(A)(IA) WAS HELD NOT APPLICABLE BY THE LD. CIT(A) , THERE WAS NO BASIS FOR SUSTENANCE OF DISALLOWANCE IN RESPECT OF TWO PA RTIES SO DONE BY THE LD. CIT(A). 5. PER CONTRA, THE LD. DR SUPPORTED THE FINDINGS OF THE LD. CIT(A) AND SUBMITTED THAT THE LD. CIT(A) WAS WELL WITHIN H ER RIGHT EXERCISING HER CO-TERMINUS POWERS TO EXAMINE THE GENUINENESS O F THE COMMISSION PAYMENT MADE BY THE ASSESSEE AND WHERE THE ASSESSE E HAS FURNISHED THE NECESSARY DOCUMENTATION, THE SAME HAS BEEN ALLO WED AND IN RESPECT OF REMAINING, THE SAME HAS BEEN SUSTAINED. ITA NO. 757/JP/2018 SATYAM POLYPLAST, JAIPUR VS. ACIT, JAIPUR 3 6. AFTER HEARING BOTH THE PARTIES AND PURSUING MAT ERIAL AVAILABLE ON RECORD, FIRSTLY, IT IS NOTED THAT THE PAYMENT OF CO MMISSION TO THE NON- RESIDENTS IS ARISING OUT OF THE ASSESSMENT ORDER SO PASSED BY THE AO AND THE LD CIT(A) WAS WELL WITHIN HER RIGHTS TO CAL L FOR THE DOCUMENTATION IN SUPPORT OF THE COMMISSION PAYMENT. AT THE SAME TIME, WE DEEM IT APPROPRIATE THAT THE ASSESSEE DESE RVE AN OPPORTUNITY TO FURNISH THE DOCUMENTATION IN RESPECT OF COMMISSI ON PAYMENT TO THE TWO NON-RESIDENTS. WE ACCORDINGLY SET ASIDE THE MAT TER TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPOSES OF EXAMI NING THE PAYMENTS MADE TO MR. NADIA ANWAR HASAN ALI AND MR FERNANDO B ARBOSA IN LIGHT OF SUPPORTING EVIDENCES/DOCUMENTATION TO BE PRODUCED B Y THE ASSESSEE IN SUPPORT OF THE SAID COMMISSION PAYMENT AFTER ALLOWI NG REASONABLE OPPORTUNITY TO THE ASSESSEE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 10/10/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 10/10/2018. * GANESH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SATYAM POLYPLAST, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-04, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) ITA NO. 757/JP/2018 SATYAM POLYPLAST, JAIPUR VS. ACIT, JAIPUR 4 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 757/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR