Jorawar Singh, Kurukshetra V. ITO, Kurukshetra

ITA 771/CHANDI/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68502 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 02-07-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 27-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G S NAGAR
• Assessee Lawyers: G SAGAR
• Keywords: Gift; Additional evidence

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACOCUNTANT MEMBER ITA NO. 771/CHD/2012 ASSESSMENT YEAR 2008-09 SHRI JORAWAR SINGH V THE ITO, TEHSIL PEHOWA WARD-I, KURUKSHETRA DISTRICT KURUKSHETRA PAN NO. ACBPS3332E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.SAGAR RESPONDENT BY : SHRI G.S. NAGAR DATE OF HEARING : 12.09.2013 DATE OF PRONOUNCEMENT : 13.09.3013 ORDER PER BHAVNESH SAINI, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), KARNAL DATED 3.4.2012 FOR ASSESSMENT YEAR 2008-09. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. 3. ON GROUND NO.1, THE ASSESSEE CHALLENGED THE ADD ITION OF RS. 6,42,870/- ON ACCOUNT OF COMMISSION. THE ASSESSEE IS A LIC A GENT AND RECEIVED COMMISSION INCOME AND CLAIMED DEDUCTION OF COMMISSI ON OF RS. 6,42,870/-. THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF THE SA ME. THE ASSESSEE FILED LIST OF 2 40 PERSONS TO WHOM THE COMMISSION WAS GIVEN BUT ACC ORDING TO ASSESSING OFFICER THE LIST WAS FOR THE AMOUNT OF RS. 1,42,045 /- ONLY. NO DETAILS WERE FURNISHED FOR THE REMAINING AMOUNT OR JUSTIFICATION FOR MAKING COMMISSION AMOUNT. THE ASSESSEE STATED THAT IN FACT FOR BUSIN ESS PROMOTION INCENTIVES HAS BEEN PAID. THE ASSESSING OFFICER REFERRED TO LETT ER OF LIC OF INDIA TO SHOW THAT SUCH PAYMENT IS NOT JUSTIFIED IN CASE OF LIC AGENTS BECAUSE IT IS PROHIBITED AND FURTHER IN THE ABSENCE OF ANY DETAILS OF PAYMENT OF COMMISSION AND THE NATURE OF DUTIES PERFORMED BY THE AGENT, DISALLOWED THE CLAIM OF THE ASSESSEE. 4. THE ASSESSEES CHALLENGED THE ADDITION BEFORE L D. CIT(A) AND SUBMITTED THAT THE COMMISSION WAS PAID FROM POLICY TO POLICY AND PERSON TO PERSON. IT WAS STATED THAT COMMISSION WAS PAID DIRECTLY TO THE POL ICY HOLDER. THE ASSESSEE FILED 09 AFFIDAVITS OF THE PERSONS TO SUPPORT THAT GENUIN E PAYMENTS HAVE BEEN MADE. THE LD. CIT(A), HOWEVER, FOUND THAT SUCH AFFIDAVITS ARE FILED IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES AND ACCORDINGLY TH E SAME WERE IGNORED. THE LD. CIT(A) ALSO HELD THAT THE ASSESSEE HAD TAKEN A DIFFERENT STAND AT APPELLATE PROCEEDINGS, THEIR GENUINE COMMISSION OF PAYMENT IS NOT PROVED AND ACCORDINGLY APPEAL OF THE ASSESSEE WAS DISMISSED. 5. ON CONSIDERATION OF RIVAL SUBMISSIONS, WE NOT D O FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE AUTHORITIES BELOW I N MAKING THE ADDITION. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ONE MORE CH ANCE MAY BE GIVEN TO THE ASSESSEE TO PRODUCE ALL THE PERSONS BEFORE THE ASSE SSING OFFICER TO WHOM COMMISSION HAVE BEEN PAID. HOWEVER, THE FACT REMA INS THAT AT THE ASSESSMENT STAGE THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE CLAIM OF DEDUCTION OF COMMISSION. IT WAS ALSO NOT PROVED THAT AS TO WHY COMMISSION WAS PAID AND THE PURPOSE THEREOF. THE ASSESSEE TAKEN A DIFFERE NT STAND BEFORE THE LD. CIT(A) AND EVEN SUCH DIFFERENCE STAND WAS ALSO NOT SUBSTANTIATED THROUGH ANY EVIDENCE OR MATERIAL ON RECORD, THEREFORE, T HERE IS NO NEED TO GIVE FURTHER 3 OPPORTUNITY TO THE ASSESSEE TO PROVE THE CASE BEFOR E THE ASSESSING OFFICER. WE ACCORDINGLY DISMISS THIS GROUND OF APPEAL OF THE AS SESSEE. 6. ON GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 83,246/- ON ACCOUNT OF TELEPHONE EXPENSES. THE ASSESSING OF FICER DISALLOWED 20% OF THE EXPENSES FOR PERSONAL PURPOSES OUT OF TELEPHONE EXP ENSES ETC. THE LD. CIT(A) CONFIRMED THE SAME. 7. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW, THAT THE ADDITION IN PRINCIPLE IS JUSTIFIED BECAUSE ASSESSEE FAIL TO SUBSTANTIATE THE CLAIM OF THE EXPENSES, HOWEVER, IT APPEARS TO BE EXCESSIV E IN NATURE SO WE ACCORDINGLY REDUCE THE ADDITION TO 10% OF THE EXPENSES CLAIMED. THUS, THE ASSESSEE WOULD BE ENTITLED FOR FURTHER DEDUCTION OF 50%. THE ASSE SSING OFFICER IS DIRECTED TO GRANT CONSEQUENTIAL RELIEF TO THE ASSESSEE. THIS GR OUND IS PARTLY ALLOWED. 8. ON GROUND NO.3, THE ASSESSING OFFICER DISALLOWED RS. 25,000/-OUT OF ENTERTAINMENT / GIFT EXPENSES BECAUSE THE ASSESSEE FAILED TO PRODUCE THE VOUCHERS OR THE SAME WERE SELF MADE. THE LD. CIT(A ) CONFIRMED THE ADDITION. 9. ON CONSIDERATION OF THE FINDINGS OF THE AUTHORI TIES BELOW, WE ARE OF THE VIEW THAT ADDITION HAS BEEN RIGHTY MADE BY THE AUTH ORITIES BELOW. THE LD. CIT(A) HAS GIVEN A SPECIFIC FINDING THAT ASSESSEE H AS WRONGLY CLAIMED THE DEDUCTION OF THE EXPENSES WHICH HAVE NOT BEEN REBUT TED BY THE ASSESSEE THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. THE LD. CIT(A) SPECIFICALLY FOUND THAT ASSESSEE HAS NOT BEEN ABLE TO FURNISH EVEN THE NATU RE AND DETAILS OF THE EXPENSES INCURRED AND THAT THE SAME WERE INCURRED FOR BUSINE SS PURPOSES. WE ACCORDINGLY DISMISS GROUND NO. 3 OF THE APPEAL OF THE ASSESSEE. 4 10. ON GROUND NO.4, THE ASSESSEE CHALLENGED THE ORD ER OF LD. CIT(A) IN NOT CONSIDERING THE AFFIDAVITS OF NINE PERSONS FILED A T THE APPELLATE STAGE. WE FIND THAT ASSESSEE FILED NINE AFFIDAVITS OF THE PERSONS IN SUPPORT OF CALM OF PAYMENT OF COMMISSION WHICH HAVE NOT BEEN TAKEN INTO CONSID ERATION BY LD. CIT(A) BEING ADDITIONAL EVIDENCE IN NATURE BECAUSE NO REQU EST UNDER RULE 46A OF THE INCOME TAX RULES HAVE BEEN MADE. IN VIEW OF THESE FINDINGS OF THE LD. CIT(A), WE DO NOT FIND ANY JUSTIFICATION TO INTERFE RE WITH THE ORDER OF THE LD. CIT(A). IT IS AN ADMITTED FACT THAT ASSESSEE DID N OT MAKE ANY REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE BEFORE CIT(A). MO REOVER RULE 46A PROVIDES CERTAIN CONDITIONS TO BE SATISFIED BY THE ASSESSEE BEFORE ADDITIONAL EVIDENCE COULD BE ADMITTED. THE ASSESSEE HA,S HOWEVER, NO T MADE OUT ANY CASE OF ADMISSION OF ADDITIONAL EVIDENCE. GROUND NO.4 OF T HE APPEAL OF THE ASSESSEE IS ACCORDINGLY DISMISSED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/09/2013 SD/- SD/- (T.R. SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH SEPTEMBER, 2013 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER, (ASSISTANT REGISTRAR) ITAT, CHANDIGARH