The Asstt.Commissioner of Income Tax, Circle-5(2), Ahmedabad V. M/s. Bombay Sales Corporation, Ahmedabad

ITA 880/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8246 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: NISHIT B JESUR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ACIT, CIRCLE - 5(2), AHMEDABAD (APPELLANT) VS M/S. BOMBAY SALES CORPORATION, GROUND FLOOR, MRUDUL TOER, B/H. TIMES OF INDIA, NR. VASANT NATURE VIEW BUILDING, OFF: ASHRAM ROAD, AHMEDABAD - 380009 P AN: AAAFB8515 F (RESPONDENT) REVENUE BY : S H RI V.K. SINGH , SR. D . R. ASSESSEE BY: S H RI NISHIT B. JESUR , A.R. DATE OF HEARING : 20 - 03 - 2 018 DATE OF PRONOUNCEM EN T : 10 - 05 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THE S E TWO REVENUE S APPEAL S FOR A.Y. 2012 - 13 TO 2013 - 14 , AR ISE FROM ORDER OF THE CIT(A) - 5 , AHM EDABAD DATED 06 - 01 - 2017 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - ITA NO. 880/AHD/2017 (1) THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.5,82,00,457/ - U/S 40(A) (IA) OF THE ACT. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD.CIT(A) OUGHT TO HAVE UPHELD THE ADDITION MADE BY THE AO. I T A NO S . 880 TO 881 / A HD/20 17 A SSESS MENT YEAR 2012 - 13 TO 2013 - 14 I.T.A NO S . 880 TO 881 /AHD/20 17 A.Y. 2012 - 13 TO 2013 - 14 PAGE NO ACIT VS. M/S. BOMBAY SALES CORPORATION 2 (3) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD.CIT(A) MAY BE SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 3. AS THE FACTS IN BOTH THE APPEALS ARE SIMILAR, SO, WE T AKE THE FACTS OF ITA NO. 880/AHD/2017 AND DECIDE BOTH THE APPEALS FOR THE SAKE OF CONVENIENCE. 4. IN THIS CASE, RETU RN OF INCOME DECLARING OF RS. 72, 24 , 060/ - WAS FILED ON 25 TH SEP, 2012. SUBSEQUENTLY , THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NO TICE U/S. 143(2) OF THE ACT. DURING T HE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS DEBITED AN AMOUNT OF RS. 5 , 82 , 00 , 457/ - IN THE PROFIT AND LOSS A/C UNDER THE HEAD SALES INCENTIVES. THE ASSESSING OFFICER OBSERVED T HAT SUCH SALES INCENTIVES IS IN THE NATU RE OF COMMISSION PAID ON WHICH THE ASSESSE WAS LIABLE TO DEDUCT TAX AT SOURCE U/S. 194H OF THE ACT . CONSEQUENTLY THE ASSESSING OFFICER HAS DISALLOWED THE AFORESAID AMOUNT U/S. 40(A)(IA) OF TH E A CT. 5. AGGRIEVED ASS ESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY STA T ING THAT THE CO - ORDINATE BENCH OF THE ITAT IN THE CASE OF ASSESSEE ITSELF VIDE ITA NO. 1835/AHD/2011 DATED 2 ND AUGUST, 2013 AND FURTHER IN ASSESSMENT Y EAR 2010 - 11 HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE ASSESSING OFFICER HAS MADE DISALLOWANCE OF RS. 5 , 82,00,457/ - U/S. 40(A)(IA) TREATING THE SALE S INCENTIVE PAID BY THE A SSESSEE AS COMMISSION ON WHICH TDS WAS NOT DEDUCTED. THE ASSESSEE IS A DISTRIBUTOR IN GUJARAT STATE OF THE COMPANY CALLED SHILA FOAM P VT. LD. (SFPL) AND THEIR RELATIONSHIP IS PRINCIPAL TO PRINCIPAL. AFTER PURCHASING GOODS FROM SF PL, THE ASSESSEE FIRM SALE IT TO VARIOUS DEALERS APPOINTED BY THE SFPL. THE DEALER S ARE ON LY PURCHASING GOODS FROM THE ASS ESSE E WITHOUT RENDERING ANY SERVICES. THE ASSESS E E GET CASH DISCOUNT FROM THE SFPL FOR MAKING EARLY PAYMENT FOR PURCHASE OF GOODS. THE I.T.A NO S . 880 TO 881 /AHD/20 17 A.Y. 2012 - 13 TO 2013 - 14 PAGE NO ACIT VS. M/S. BOMBAY SALES CORPORATION 3 ASSESS EE IN TURN PROVID ES DISCOUNT TO THE DEALERS ON TH E BASI S OF PURCHASES MADE BY THEM FROM THE AS SESSEE. AFTER CONSIDERING THE ABOVE FACT, WE OBSERVE THA T THE DEALERS HAVE PURCHASED GOOD S FRO M THE ASSESSE E AND THEY HAVE NOT RENDERED ANY SERVICES TO THE ASSESSEE. THE IDENTICAL ISSUE HAS BEEN DECIDED BY T H E CO - ORDINATE BENCH OF THE ITAT IN THE CASE OF THE ASSESSE E ITSELF VIDE ITAT 2553/AHD/2013 FOR ASSESSMENT YEAR 2010 - 11 DATED 13 /06/2014 AND VIDE ITA NO. 3224/AHD/2014 IN FAVOUR OF THE ASSESSEE. IN VIEW OF THE THESE FACTS AND FINDINGS, WE DO NOT FIND ANY ERROR IN THE DECISION OF THE LD. CIT(A). IN THE R ESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 10 - 05 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 10 /05 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,