ITO, Ward - 50(1), Kolkata, Kolkata V. M/s. Benoy Krishna Ghosh & Sons (TELE), North 24 Parganas

ITA 88/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75117 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 02-05-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 13-01-2011
• Court: TRIBUNAL
• Department Lawyers: SADHAN BHATTACHARYA ACIT
• Section: 143(3)

Judgement Text

, C , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () , , , , , ! ! ! ! ] ]] ] [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHY A, AM] # # # # /ITA NO.88/KOL/2011 $% &'/ ASSESSMENT YEAR : 2006-07 ()* / APPELLANT ) - $ - ( ,-)* /RESPONDENT) I.T.O., WARD-50(1) -VERSUS- M/S.BENOY KRISHNA GH OSH KOLKATA &SONS (TELE),KOLKATA (PAN:AAGFB 4792 C) )* . / / FOR THE APPELLANT: SHRI SADHAN BHATTACHARYA, ACIT, SR.DR ,-)* . / / FOR THE RESPONDENT: NONE 0$1 . 2! /DATE OF HEARING : 31.03.2014 3& . 2! /DATE OF PRONOUNCEMENT : 31.03.2014. / ORDER ( (( ( ) )) ), , , , PER SHRI MAHAVIR SINGH, JM THIS APPEAL OF REVENUE IS DIRECTED AGAINST ORDER OF CIT(A)-XXXII, KOLKATA IN APPEAL NO.133/CIT(A)-XXXII/08-09/CIR-49/KOL DATED 0 5.08.2010. ASSESSMENT WAS FRAMED BY D.C.I.T., CIRCLE-49, KOLKATA U/S 143(3) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR A.YR. 20 06-07 VIDE ITS ORDER DATED 26.2.2008. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST ORDER OF CIT(A), IN DELETING THE ADDITION MADE BY AO ON ACCOUNT OF COMMISSION AT RS.19,91,622/-. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- THE LD.C.I.T.(A)-XXXII, KOLKATA ERRED IN DELETING THE ADDITION OF RS.19,91,622/- MADE BY THE I.T.O., ON ACCOUNT OF TH E COMMISSION RECEIVED FROM M/S.VODAFONE ESSAR LTD. WHICH WAS NOT OFFERED BY TH E ASSESSEE FOR TAXATION. THE ASSESSEE RECEIVED TOTAL COMMISSION AS PER FORM NO.1 94C OF RS.39,65,187/- FROM M/S.VODAFONE ESSER LTD. OUT OF WHICH RS.19,73, 565/- WAS BROUGHT TO TAX AND BALANCE RS.19,91,622/- WAS NOT ACCOUNTED FOR DU RING THE F.Y.2005-06. ITA NO.88/KOL/2011 M/S.BENOY KRISHNA GHOSH & S ONS (TELE) A.YR.2006-07 2 ALTHOUGH THE ASSESSEE CLAIMED THAT THE COMMISSION O F RS.19,91,622/- WAS DISTRIBUTED AMONG THE RETAILERS, NO EVIDENCE OR DOC UMENTS IN SUPPORT OF HIS CLAIM COULD BE PRODUCED DURING THE COURSE OF ASSESS MENT PROCEEDINGS, NOR IT WAS AVAILABLE ON RECORD. SO, THE I.T.O. HAD RIGHTLY ADDED THE SUM OF RS.19,91,622/- IN THE ASSESSMENT ORDER. 3. NONE APPEARED ON BEHALF OF ASSESSE. WE HAVE HEAR D LD. DR AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE AO NOTICED FROM TDS FORMS THAT ASSESSEE HAS RECEIVED TOTAL COMMISSION OF RS.39,65,187/- AND ASSESSEE COULD NOT OFFER ANY EXPLANATION FOR NON DECLARING OF COMMISSION TO THE EXTENT AS DECLARED IN TDS FORMS. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO DELETED THE ADDITION BY OBSERVING AS UNDER : IT IS A MATTER OF COMMON KNOWLEDGE THAT IN THE ASS ESSEES TRADE, PASSING OFF OF COMMISSION/DISCOUNT TO RETAILERS IS A REQUISITE AND ACTUAL PRACTICE. THE A.R. HAS SUBMITTED THAT THAT FACT WAS DULY INFORMED TO THE A .O. DURING THE ASSESSMENT PROCEEDINGS, AS ALSO THE NAME OF THE RETAILERS TO W HOM SUCH COMMISSION WAS PASSED ON, WAS SUBMITTED. IN HIS REMAND REPORT SUBM ITTED VIDE LETTER NO.W- 50(1)/REPORT/10-11/KOL/240 DATED 23.06.10 THE A.O. SUBMITTED THAT CONSIDERING THE CONFIRMATION FROM THE PRINCIPAL THAT THE PAYME NT OF RS.39,65,187 (RUPEES THIRTY NINE LAKH SIXTY FIVE THOUSAND ONE HUNDRED EI GHTY SEVEN ONLY) INCLUDES ALL TYPES OF COMMISSIONS, INCENTIVES, PART OF WHICH IS TO BE USED BY THE DISTRIBUTOR FOR DISBURSEMENT TO THE RETAILERS WORKING UNDER HIM AS PART OF MARKET SETTLEMENT AND AS PER TERMS AND CONDITIONS OF OUR AGREEMENT WITH T HE DISTRIBUTOR AND THE FACT THAT THE AR OF THE APPELLANT STATED THAT THE DISBUR SEMENTS WERE MADE BY THE ASSESSEE ON PERIODIC BASIS AND THAT STATEMENT SHOWI NG WORKING OF SUCH DISBURSEMENT TO RETAILERS, CONTAINING THE SIGNATURE OF RETAILERS ACCEPTING THE PAYMENT, WHICH WERE PRODUCED DURING THE APPELLATE P ROCEEDINGS, WERE ALSO PRODUCED IN SUPPORT OF HIS SUBMISSION BEFORE THE AS SESSING OFFICER., I AM OF THE VIEW THAT THE ASSESEE HAD REASONABLY EXPLAINED THE REASON FOR DECLARING COMMISSIONS RECEIPT OF RS.19,73,565/- INSTEAD OF TH E GROSS RECEIPTS OF RS.39,65,187, THEREFORE, THE ADDITION OF RS.19,91,6 22/- (WRONGLY MENTIONED AS RS.19,73,565/- IN THE COMPUTATION OF INCOME IN THE ASSESSMENT ORDER) MADE BY THE A.O. DESERVES TO BE DELETED. ACCORDINGLY, THE A DDITION OF THAT AMOUNT MADE BY THE AO IS DELETED. GROUNDS NO.1 TO 5 ARE, THUS, ALL OWED. AGGRIEVED, REVENUE CAME IN APPEAL BEFORE US. 4. WE FIND THAT CIT(A) AFTER GOING THROUGH THE STAT EMENT OF DISBURSEMENT TO RETAILERS I.E. COMMISSION DISBURSEMENT TO THE RETAI LERS ACCEPTING THE PAYMENTS DELETED THE ADDITION. EVEN NOW BEFORE US THE ASSESSEE HAS F ILED DETAILS OF COMMISSION PAYMENT WHICH IS A NORMAL ROUTINE EXPENSES IN THE NATURE OF TRADE. THE ENTIRE COMMISSION RECEIVED BY ASSESSEE AS NARRATED IN TDS FORM CANNOT BE THE INCOME OF ASSESSEE. TO ITA NO.88/KOL/2011 M/S.BENOY KRISHNA GHOSH & S ONS (TELE) A.YR.2006-07 3 EARN SUCH INCOME THE ASSESSEE HAS TO INCUR SUCH EXP ENSES WHICH ARE CLAIMED BY THE ASSESSEE. WE FIND NO INFIRMITY IN THE ORDER OF CIT( A) AND THE SAME IS CONFIRMED. APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT THE APPEAL OF REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- [ , ! ] [ , ] [ SHAMIM YAHYA ] [ MAHAVIR SINGH ] ACCOUNTANT MEMBER JUDICIAL MEMBER ( (( (2! 2! 2! 2!) )) ) DATE: 31.03.2014. R.G.(.P.S.) . ,4 5 4&6- COPY OF THE ORDER FORWARDED TO: 1 . M/S.BENOY KRISHNA GHOSH & SONS (TELE), 134, NAGARUK HRA ROAD, KAMARTHUBA HABRA, WARD-4, DIST.24 PGNS. (N).. 2 THE I.T.O.-WARD-50(1), KOLKATA 3 . THE CIT, 4. THE CIT(A)-XXXII, KOLKATA 5 . C.I.T.(DR), KOLKATA BENCHES, KOLKATA -4 ,/ TRUE COPY, $0/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES