DCIT, Circle-14(1) TDS, Hyderabad V. M/s. Deccan Chronicle Holdings Ltd., Secunderabad

ITA 893/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66400 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 04-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS
• Assessee Lawyers: A V RAGHURAM
• Keywords: Diversion of income
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.893/HYD/2012 ASSESSMENT YEAR: 2009-10 DCIT, CIR-14(1), HYDERABAD. .... APPELLANT VS. M/S. DECCAN CHRONICLE HOLDINGS LTD., SD ROAD, SECUNDERABAD. . . RESPONDENT PAN:AABCD 6737 D APPELLANT BY : SMT. NIVEDITA BISWAS RESPONDENT BY : SHRI A.V. RAGHURAM DATE OF HEARING : 25-09-2012 DATE OF PRONOUNCEMENT : 02-11-2012 ORDER PER SAKTIJIT DEY, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 26-3-2012 PASSED IN ITA NO.0055/CIT (A)- II,HYD/2009-10 AND IT PERTAINS TO THE ASSESSMENT YE AR 2009- 10. 2. THE DEPARTMENT HAS FILED THE APPEAL ON THE FOLLO WING EFFECTIVE GROUND:- THE CIT (A) ERRED IN APPRECIATING THE FACT THAT TH E EXPENDITURE INCURRED BY THE ASSESSEE AS PER THE DEBIT NOTE RAIS ED BY HCA WAS 2 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... TOWARDS USE OF THE GROUND ALONG WITH OTHER FACILITI ES WHICH ARE INSEPARABLE FROM THE GROUND FACTS OF THE ISSUE BRIEFLY ARE THE ASSESSEE COMPANY IS THE FRANCHISE FOR THE BCCI IPL T20 CRICKET MATCHES FOR HYDERABAD DECC AN CHARGES TEAM. IN CONNECTION WITH HOLDING T20 CRICKET MATCHES, THE ASSESSEE HAS MADE PAYMENTS TO VARIOUS PERSONS. THE ACIT, CIR-14(1), HYDERABAD WHO IS THE AO, AFTER VERIFYING THE BOOKS OF ACCOUNTS OF TH E ASSESSEE FOUND THAT IN RESPECT OF CERTAIN PAYMENTS MADE BY THE ASSESSEE, NO TAX WAS DEDUCTED AT SOURCE. THE AO THEREFORE ISSUED A SHOW CAUSE NO TICE ASKING THE ASSESSEE TO SHOW CAUSE AS TO WHY IT SHALL NOT BE TR EATED AS AN ASSESSEE IN DEFAULT U/S 201(1) AND 201(1A) OF THE ACT FOR NOT D EDUCTING TAX ON VARIOUS PAYMENTS. ONE OF THEM BEING AN AMOUNT OF R S.32 LAKHS PAID TO HYDERABAD CRICKET ASSOCIATION (HCA IN BRIEF) TOWARD S GROUND RENT. IN REPLY TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMIT TED THAT THE AMOUNT OF RS.32 LAKHS COMPRISES OF RS. 1 LAKH TOWARDS RENT FOR PARKING LOT, RS. 1 LAKH FOR GROUND LEVELLING WORK UNDERTAKEN FOR PARKI NG ON WHICH TAX WAS DEDUCTED AT SOURCE AS PER THE PROVISION OF SECTION 194C . RS.10 LAKHS WAS PAID AS ADVANCE TOWARDS EXPENSES TO BE INCURRED ON ASSESSEES BEHALF FOR DIESEL OF GENERATOR USED FOR LIGHTING TH E STADIUM AND BALANCE OF RS.20 LAKHS TOWARDS REIMBURSEMENT OF COST OF WATER TANKER CHARGES FOOD EXPENSES ETC. IN SUPPORT OF SUCH CONTENTION, THE A SSESSEE ALSO SUBMITTED THE DEBIT NOTE RAISED BY THE HYDERABAD CRICKET ASSO CIATION ON THE ASSESSEE. THE ASSESSEE CONTENDED THAT SINCE NO AM OUNT WAS PAID TOWARDS GROUND RENT THE PROVISIONS OF SECTION 194I IS NOT ATTRACTED. THE AO HOWEVER REJECTED THE EXPLANATION SUBMITTED BY T HE ASSESSEE BY HOLDING THAT THE PAYMENT OF RS.20 LAKHS TO THE HCA WAS TOWARDS USE OF CRICKET GROUND SO IT HAS TO BE TREATED AS RENT ATTR ACTING THE TDS PROVISIONS AS CONTAINED U/S 194I OF THE ACT. SINCE THE ASSESSEE FAILED TO DEDUCT TAX AT THE PRESCRIBED RATE OF 22.66% ON THE AFORESAID PAYMENT OF RS.20 LAKHS, THE AO PASSED AN ORDER TREATING THE A SSESSEE AS AN 3 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... ASSESSEE IN DEFAULT U/S 201(1) AND 201(1A) OF THE ACT BY DEMANDING TAX OF RS.4,53,200/- AND INTEREST OF RS.37,123/-. THE A SSESSEE BEING AGGRIEVED FILED AN APPEAL BEFORE THE CIT (A). 3. IN COURSE OF HEARING BEFORE THE CIT (A), THE ASS ESSEE REITERATED ITS STAND TAKEN BEFORE THE AO AND SUBMITTED THAT THE AM OUNT OF RS.20 LAKHS PAID TO HCA WAS NOT TOWARDS THE RENT FOR THE GROUND , BUT TOWARDS REIMBURSEMENT OF THE EXPENSES INCURRED FOR DIESEL F OR GENERATORS/ LIGHTS/ ELECTRICITY, DRESSING ROOM FACILITIES/WATER FOR PIT CH PREPARATION/FOOD FOR MEDIA, VOLUNTEERS, GROUND STAFF ON MATCH DAYS, PRAC TICE DAYS AND PREPARATION DAYS ETC. THE CIT (A) AFTER CONSIDERIN G THE CONTENTIONS RAISED BY THE ASSESSEE AND EXAMINING THE RECORDS, F OUND THAT OUT OF TOTAL PAYMENT MADE TO RS. 32 LAKHS MADE TO HCA THOUGH TH E ASSESSEE HAD DEDUCTED TAX AT SOURCE ON TOTAL PAYMENT OF RS.12 LA KHS, HE HAS NOT DEDUCTED THE TAX AT SOURCE ON THE BALANCE OF RS.20 LAKHS BY SHOWING AFORESAID REASONS. THE CIT (A) FURTHER NOTICED TH AT THE ASSESSEE CLAIMED TO HAVE PAID RS.10 LAKHS TOWARDS GENERATOR EXPENSES FOR LIGHTING THE STADIUM AND DEDUCTED TAX AND AGAIN SEPARATELY CLAIM ED EXPENSES FOR DIESEL FOR GENERATORS ETC. THE CIT (A) OBSERVING THAT SINCE THE ASSESSEE HAS NOT PROVIDED ANY AGREEMENT FOR SUPPLY OF GENERA TOR, IT IS NOT POSSIBLE TO ASCERTAIN WHETHER THE CONTRACT FOR GENERATORS IN CLUDE DIESEL FOR RUNNING THEM. THE CIT (A) FURTHER OBSERVED THAT IN THE EVE NT IT IS NOT PART OF THE AGREEMENT THEN THERE MUST HAVE BEEN UNDERSTANDING/A GREEMENT FOR PROVIDING ALL THE SERVICES BETWEEN THE ASSESSEE AND HCA IN TERMS OF WHICH THE HCA INCURRED THESE EXPENSES AND RAISED A DEBIT NOTE ON THE ASSESSEE. THE CIT (A) REJECTED THE CONTENTION OF THE ASSESSEE THAT THE PAYMENT WAS MADE AGAINST THE DEBIT NOTE RAISED BY H CA BY OBSERVING THAT THE PAYMENT COULD NOT HAVE BEEN MADE JUST ON THE BASIS OF DEBIT NOTE IN THE ABSENCE OF AN AGREEMENT EITHER ORAL OR IN WRITING TO PROVIDE PARTICULAR SERVICES. THE CIT (A) FURTHER INFERRED THAT THOUGH THE AO HAD OBSERVED THAT THE PAYMENT WAS MADE FOR USE OF CRICK ET GROUND THEREBY 4 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... ATTRACTING THE PROVISION OF SECTION 194I HOWEVER TH E DEBIT NOTE SUBMITTED BY THE ASSESSEE INDICATED THE EXPENDITURES TO BE IN THE NATURE OF WORKS CONTRACT ATTRACTING THE PROVISIONS OF SECTION 194C OF THE ACT. THE CIT (A) THEREFORE DIRECTED THE AO TO VERIFY THE CLAIM AND CONSIDER THE PAYMENT OF RS.20 LAKHS TO HCA COMING WITHIN THE PROVISION OF SECTION 194C AND CALCULATE TAX AND INTEREST U/S 201(1) AND 201(1A) A CCORDINGLY. 4. THE LEARNED DR SUBMITTED BEFORE US THAT THE CONT RACT BETWEEN THE ASSESSEE AND HCA IS A COMPOSITE CONTRACT FOR USE OF THE CRICKET GROUND. THEREFORE, IT HAS TO BE TREATED AS RENT PAID TOWARD S THE CRICKET GROUND ALONG WITH OTHER FACILITIES, WHICH WOULD ATTRACT TH E PROVISIONS OF SECTION 194I OF THE ACT. THE LEARNED DR THEREFORE ARGUED F OR RESTORING THE ORDER OF THE AO. 5. THE LEARNED AR REITERATING ITS STAND TAKEN BEFOR E THE LOWER AUTHORITIES SUBMITTED BEFORE US THAT THE ASSESSEE H AS NO AGREEMENT WITH HCA AS IT IS HOLDING THE T20 MATCHES AS A FRANCHISE OF THE BCCI. THE LEARNED AR SUBMITTED THAT THE PAYMENT MADE TO HCA A S PER THE DEBIT NOTE WAS ONLY TOWARDS REIMBURSEMENT OF EXPENSES AND NOT FOR USE OF THE GROUND. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS IT APPEARS THE ASSESSEE HAS ACCEPTED THE FINDING OF THE CIT (A) THAT THE PAYMENTS MADE BY THE ASSESSEE ARE FOR WORK WHICH IS IN THE NATURE OF WORK CONTRACT ATTRACTING THE PROVISIONS OF SECTION 194C OF THE IT ACT. THEREFORE, THE ONLY ISSUE TO BE DECIDED IS WHETHER THE PAYMENTS WERE TOWARDS RENT OF THE GROUND ALONG WITH OTHER FA CILITIES REQUIRING DEDUCTION OF TAX AT SOURCE U/S 194I OF THE ACT OR T HE PAYMENTS ARE FOR WORKS CONTRACT AS PER SECTION 194C OF THE ACT. BEFO RE COMING TO A DEFINITE CONCLUSION ON THIS ISSUE, IT IS VERY MUCH NECESSAR Y TO ASCERTAIN THE EXACT NATURE OF PAYMENT AND THE SERVICES RENDERED OR FACI LITIES PROVIDED FOR WHICH SUCH PAYMENT WAS MADE. WE FIND FROM THE ORDE R OF THE AO THAT HE HAS NOT MADE ANY ENDEAVOUR TO ASCERTAIN THE CORRECT FACT BY TAKING 5 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... NECESSARY ENQUIRY EITHER WITH THE BCCI OR HCA FOR F INDING OUT THE TRUE CHARACTER OF THE PAYMENT MADE. AT THE SAME TIME, THE CIT (A) WAS ALSO NOT JUSTIFIED IN PRESUMING THE PAYMENTS TO BE IN TH E NATURE OF WORK CONTRACT FALLING U/S 194C OF THE ACT,WHEN SHE HERSE LF HAS OBSERVED THAT THE CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED SINCE THE PAYMENT COULD NOT HAVE BEEN JUST ON THE BASIS OF DEBIT NOTE AND THERE MIGHT HAVE BEEN AN AGREEMENT EITHER ORAL OR WRITTEN FOR PROVIDING THE PARTICULAR SERVICES. IN THE AFORESAID VIEW OF THE MATTER, WE ARE OF THE CO NSIDERED OPINION THAT THE CIT (A) WAS NOT JUSTIFIED IN DIRECTING THE AO T O CONSIDER THE PAYMENT U/S 194C AND ACCORDINGLY CALCULATE TAX AND INTEREST U/S 201(1)& 201(1A) OF THE ACT. THE ORDER OF THE CIT (A) IS MODIFIED TO THIS EXTENT ONLY. HOWEVER, TAKING INTO CONSIDERATION THE TOTALITY OF FACTS AND THE CIRCUMSTANCES OF THIS CASE, WE DEEM IT PROPER TO RE MIT THE MATTER TO THE FILE OF THE AO FOR DETERMINING THE ISSUE AFRESH AFT ER CONDUCTING NECESSARY ENQUIRY. THE AO SHALL AFFORD A REASONABLE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER. 7. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 02 -11-2012. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 2 ND NOVEMBER, 2012. COPY TO:- 1) DCIT, CIR-14(1), AC GUARDS, IT TOWERS, HYDERABAD . 2) M/S. DECCAN CHRONICLE HOLDINGS LTD., PLOT NO.36, SD ROAD, SECUNDERABAD.. 3) THE CIT (A)-II, HYDERABAD 4) THE CIT CONCERNED, HYDERABAD 6 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. JMR* N THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD 7 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1192/HYD/2011 ASSESSMENT YEAR: 2006-07 ACIT, CIR-10(1), HYDERABAD. .... APPELLANT VS. SMT. RITA NARANG, HYDERABAD. HYDERABAD. RESPONDENT PAN:AEYPR 1030 D APPELLANT BY : SHRI K. VISWANATHAM RESPONDENT BY : NONE DATE OF HEARING : 02-08-2012 DATE OF PRONOUNCEMENT : -10-2012 ORDER PER SAKTIJIT DEY, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31-3-2011 PASSED IN ITA NO.594/08-09/CIT(A)-VI/10-11 AND IT PERTAINS TO THE ASSESSMENT YEAR 2006-07. 2. DESPITE NOTICE, THERE WAS NO APPEARANCE ON BEHAL F OF THE ASSESSEE. HOWEVER, THE ASSESSEE SUBMITTED A PA PER BOOK CONTAINING OTHER DOCUMENTS WHICH ARE AVAILABLE ON R ECORD. HENCE, WE DECIDE THE APPEAL AFTER HEARING THE SUBMI SSIONS OF THE LEARNED DR AND CONSIDERING THE WRITTEN SUBMIS SIONS OF THE ASSESSEE. 8 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... 3. THE REVENUE RAISED THE FOLLOWING EFFECTIVE GROUN DS BEFORE US:- // GROUNDS// 4. GROUND NO.2 RELATES TO CIT (A) DIRECTING THE AO TO CONSIDER THE EXPENDITURE OF RS.11,43,675/- WHILE C OMPUTING THE PROFIT FROM SALE OF PROPERTY. BRIEFLY, THE FAC TS ARE THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM REAL ESTATE BUSINESS. FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION, THE ASSESSEE FILED HER RETURN OF INCOME DECLARING AN IN COME OF RS.27,32,705. THE ASSESSEE ALONG WITH HIS HER HUS BAND SRI ASHOK K. NARANG ON 15-3-2003 HAD ENTERED INTO A DEVELOPMENT AGREEMENT WITH VIKAS V. SHAHANI FOR DEVELOPING 2052 SQ. YARDS OF LAND AT SURVEY NO.166/ 1 WITH THE CONDITION TO HANDOVER 45% SHARE IN THE DEVELOP ED AREA TO THE OWNER OF THE LAND MR. VIKAS SHAHANI. BY VIR TUE OF A DEVELOPMENT AGREEMENT, THE ASSESSEE ALONG WITH HER HUSBAND DEVELOPED THE LAND COMPRISING OF FOUR ADJ. PLOTS I.E., 1, 2, 3 AND 4 BELONGING TO VIKAS SHAHANI. TH EREFORE, THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE ALONG W ITH HER HUSBAND RECEIVED A GROSS AMOUNT OF RS.1,00,00,000/- FROM SALE OF FLATS. FROM THE GROSS RECEIPTS FROM SALE O F FLATS AFTER DEDUCTING THE COST OF LAND AT RS.36 LAKHS REGISTRAT ION AND INCIDENTAL CHARGES OF RS.3,59,00,155/- AND CONSTRUC TION EXPENSES UP TO AN AMOUNT OF RS.11,43,675/- THE TOT AL PROFIT 9 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... DERI8VED BY THE ASSESSEE ALONG WITH HER HUSBAND WA S RS.48,46,570/- AND ASSESSEES SHARE BEING RS.24,48, 285 WAS SHOWN AS PROFIT IN THE PROFIT & LOSS A/C OF THE ASSE SSEE. 5. THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE TO FURNISH THE DETAILS REGARDING THE E XPENDITURE OF RS.11,43,675/- INCURRED TOWARDS COST OF CONSTR UCTION. THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE CONSTRUCT ION WORK WAS EXECUTED THROUGH A CONTRACTOR BY NAME GOPAL RED DY AND A COPY OF MEMORANDUM OF UNDERSTANDING SIGNED BY SRI GOPAL REDDY WAS ALSO SUBMITTED. THE ASSESSEE ALSO SUBMITTED COPY OF THE RECEIPT FROM GOPAL REDDY TOWA RDS PAYMENT OF CONSTRUCTION COST. THE AO HOWEVER WAS N OT SATISFIED WITH THE EVIDENCE SUBMITTED BY THE ASSESS EE. THE AO FURTHER NOTED THAT NO SUPPORTING DETAILS WERE SU BMITTED TO SHOW THAT THE TDS WAS MADE AGAINST THE PAYMENT TO CONTRACTOR. ON THE AFORESAID CONSIDERATION, THE AO DISALLOWED THE EXPENDITURE OF RS.11,43,675/- CLAIME D TOWARDS CONSTRUCTION. THE ASSESSEE CHALLENGED THE DISALLOWANCE BEFORE THE CIT (A). IN COURSE OF HEAR ING OF APPEAL, IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT EXPENDITURE OF RS.11,43,675/- WAS CLAIMED TOWARDS CONSTRUCTION THROUGH WORK EXECUTED BY GOPAL REDDY W ITH WHOM THE ASSESSEE HAS ENTERED MEMORANDUM OF UNDERSTANDING ON 10-6-2005. THE CIT (A) CONSIDERING THE FACT THAT THE SALE DEED CLEARLY MENTIONED THAT A STRUCT URE WAS STANDING OVER THE PLOT WHEN THE SALE WAS MADE BY TH E 10 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... ASSESSEE. THEREFORE, IT COULD NOT HAVE BEEN CONSTR UCTED WITHOUT INCURRING ANY EXPENDITURE BY THE ASSESSEE. THE CIT (A) HELD THAT MERE NON PRODUCTION OF DETAILS OF EXP ENDITURE INCURRED THROUGH CONTRACTOR COULD NOT ALONE ESTABLI SH THE FACT THAT THERE WAS NO STRUCTURE AT ALL AND THAT TH E EXPENDITURE WAS NOT INCURRED BY THE ASSESSEE. THE CIT (A) THEREFORE DIRECTED THE AO TO CONSIDER THE EXPENDITU RE OF RSD.11,43,675/-. 6. THE LEARNED DR SUPPORTING THE ORDER OF THE AO SUBMITTED THAT THE ASSESSEE HAVING FAILED TO PRODUC E ANY TANGIBLE EVIDENCE IN SUPPORT OF EXPENDITURE CLAIMED TOWARDS CONSTRUCTION WORK, THE AO WAS JUSTIFIED IN DISALLOW ING THE CLAIM OF EXPENDITURE. 7. WE HAVE HEARD THE LEARNED DR AND PERUSED THE MAT ERIAL ON RECORD. IT IS SEEN FROM THE ASSESSMENT ORDER TH AT THE AO HIMSELF HAS OBSERVED IN THE ASSESSMENT ORDER THAT T HE ASSESSEE HAS SOLD THE PROPERTY TO ONE SHRI P. MOHAN A REDDY ON 16-1-2006 FOR A TOTAL CONSIDERATION OF RS.1 CROR E FOR PLOT NO.3 ADMEASURING 617 SQ. YARDS TOGETHER WITH A STR UCTURE. WHEREAS, THE ASSESSEE WHILE PURCHASING THE SAID PRO PERTY IT COMPRISES OF ONLY 617 SQ. YARDS OF LAND, A ROOM BEI NG OF 100 SFT OF PLINTH AREA. THIS CLEARLY ESTABLISHES THE F ACT THAT A STRUCTURE HAS BEEN CONSTRUCTED BY THE ASSESSEE WHIC H WAS SOLD TO SRI MOHANA REDDY FOR CONSIDERATION OF RS. R S. 1 CRORE. IT IS THE CONTENTION OF THE ASSESSEE THAT THE ASSES SEE HAS SOLD THE PLOT ALONG WITH SEMI FINISHED STRUCTURE UPTO STUMP LEVEL 11 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... WHICH WAS CONSTRUCTED BY THE ASSESSEE THROUGH A CON TRACTOR BY NAME SRI GOPAL REDDY FOR WHICH A MEMORANDUM OF UNDERSTANDING WAS SIGNED BY THE CONTRACTOR. A COPY OF THE SAID MEMORANDUM OF UNDERSTANDING IS PLACED AT PAGE- 59 OF PAPER BOOK FILED BY THE ASSESSEE WHICH REVEALS THAT THE ASSESSEE IS TO PAY RS.180 PER SFT OF CONSTRUCTION W ORK TO SRI GOPAL REDDY. ON PAGE-57 OF THE PAPER BOOK IS THE BI LL RAISED BY THE CONTRACTOR GOPAL REDDY FOR AN AMOUNT OF RS.11,43,675/- WHICH REVEALS THAT THE CONTRACTOR GO PAL REDDY HAS ALREADY RECEIVED AN ADVANCE OF RS.1,50,000. PAGE-58 OF THE PAPER BOOK IS A RECEIPT BY THE CONTRACTOR GOPAL REDDY WHICH REVEALS THAT PAYMENT OF RS.5 LAKH THROUGH A C HEQUE ISSUED BY THE ASSESSEE AND HER HUSBAND ASHOK FROM THEIR JOINT ACCOUNT AT ING BANJARA HILLS BRANCH. THESE DOCUMENTS COUPLED WITH THE FACT THAT THE SALE DEED CLEARLY REVEALED THE PROPERTY SOLD IS THE LAND ADMEASURING 617 SQ. YARDS TOGETHER WITH A STRUCTURE. THEREFORE, THE CL AIM OF THE ASSESSEE THAT HE HAS INCURRED EXPENDITURE TOWARDS CONSTRUCTION CANNOT BE REJECTED. IN VIEW OF THE AF ORESAID FACTS, THE DIRECTION GIVEN BY THE CIT (A) REQUIRES TO BE UPHELD. THE GROUND RAISED BY THE REVENUE IS DISMISSED. 8. GROUND NOS. 3 AND 4 RELATE TO THE DIRECTION OF T HE CIT (A) FOR CONSIDERING THE CHIT LOSS OF RS.5,41,500. BRIE FLY, THE FACTS ARE THE ASSESSEE HAS CONTRIBUTED TO THE MONTHLY CHI T SERIES TO POOJA CHIT FUNDS. THE ASSESSEE HAS LIFTED THE CHIT IN OPEN 12 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... AUCTION CONDUCTED BY THE CHIT FUND COMPANY AND THES E PROCEEDS WERE UTILIZED FOR THE PURPOSE OF BUSINESS CARRIED ON BY THE ASSESSEE. THE AO FOUND FROM THE P & L A/C THA T THE ASSESSEE HAS SHOWN CHIT LOSS OF RS.9,50,000/- AND H AS SHOWN A DIVIDEND FROM CHIT OF RS.4,80,500/-. THE AO DISA LLOWED THE DIFFERENTIAL AMOUNT OF RS.5,41,000/- BY OBSERVING T HAT THE ASSESSEE COULD NOT FURNISH DETAILS TO SHOW THAT TH E AMOUNT OF CHIT WITHDRAWAL WAS UTILIZED IN THE BUSINESS OF THE ASSESSEE. BEFORE THE CIT (A), THE ASSESSEE AGAIN RE ITERATED ITS STAND TAKEN BEFORE THE AO AND ALSO RELIED ON THE DE CISION OF THE HONBLE HIGH COURT OF ANDHRA PRADESH IN THE CA SE OF CIT VS. KOVURU TEXTILES & CO. ( 136 ITR 61) (AP). THE CIT (A) AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE AND EXA MINING THE MATERIALS PLACED BEFORE HER FOUND THAT THE ASSE SSEE HAD LIFTED THE CHIT IN AN OPEN AUCTION AND THE AMOUNTS WERE UTILIZED FOR BUSINESS PURPOSES THROUGH PROPER BANKI NG CHANNEL. THE CIT (A) THEREFORE DIRECTED THE AO TO D ELETE THE ADDITION MADE ON THIS ACCOUNT. 9.. THE LEARNED DR SUPPORTING THE ADDITION MADE BY THE AO CONTENDED THAT IN ABSENCE OF PROPER EVIDENCE TO SHO W THAT THE AMOUNT WAS UTILIZED FOR THE PURPOSE OF BUSINESS , THE DISALLOWANCE WAS JUSTIFIED. 10. THE ASSESSEE IN HER WRITTEN SUBMISSIONS, HAS SU BMITTED THAT THE PROCEEDS OF THE CHIT AMOUNT WERE UTILIZED FOR THE PURPOSE OF BUSINESS. IN SUPPORT OF SUCH CLAIM, THE ASSESSEE HAS SUBMITTED THE ACCOUNT EXTRACT OF POOJA CHIT FUN D AND 13 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... EXTRACT OF CHIT LOSS AND CHIT GAIN AND A COPY OF TH E BANK STATEMENT WHICH WAS PLACED IN THE PAPER BOOK. IT I S SEEN FROM THE ABOVE DOCUMENTS THAT THE ENTIRE TRANSACTIO N HAS BEEN ROUTED THROUGH BANKING CHANNEL AND THEREFORE T HERE IS NO JUSTIFICATION ON THE PART OF THE AO TO DISALLOW THE CHIT LOSS ON CONJECTURES AND SURMISES. WE THEREFORE UPHOLD T HE FINDINGS OF THE CIT (A) IN THIS REGARD. HENCE THE G ROUNDS RAISED BY THE REVENUE ARE DISMISSED. 11. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON -10-2012. (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE SEPT., 2012. COPY TO:- 1) XXXXXXXXXXXXXXXXXXXXX. 2)XXXXXXXXXXXXXXXXXXXXXXX 3) THE CIT (A), HYDERABAD 4) THE CIT CONCERNED, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. JMR* 14 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER 15 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... ITA NO.116/HYD/2011 ASSESSMENT YEAR: 2007-08 VINS BIO PRODUCTS LTD., HYDERABAD. .... APPELLANT PAN:AABCV 0226F) VS. ACIT, CIR-3(3), HYDERABAD. RESPONDENT ITA NO.237/HYD/2012 ASSESSMENT YEAR: 2007-08 DCIT, CIR-3(3), HYDERABAD. APPELLANT -VS- VINS BIO PRODUCTS LTD., HYDERABAD. .... APPELLANT PAN:AABCV 0226F) APPELLANT BY : SHRI A. SRINIVAS RESPONDENT BY : SHRI V. SRI NIVAS DATE OF HEARING : 02-08-2012 DATE OF PRONOUNCEMENT : - 10-2012 ORDER PER SAKTIJIT DEY, J.M.: THESE CROSS APPEALS ARE BY THE ASSESSEE AND THE DE PARTMENT AND ARE DIRECTED AGAINST THE ORDER DATED 7-1-2011 OF CIT (A ), GUNTUR PERTAINING TO THE ASSESSMENT YEAR 2007-08. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IS GROUND NO.2 WHICH READS AS UNDER:- //GROUND NO.2 // 2. BRIEFLY THE FACTS ARE THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF BIOPRODUCTS. THE ASSESSEE C OMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 O N 30-10-2007 DECLARING A TOTAL INCOME OF RS.1,62,43,594. THE RE TURN WAS PROCESSED U/S 143(1). SUBSEQUENTLY, SCRUTINY ASSES SMENT PROCEEDINGS WERE INITIATED BY ISSUING A NOTICE U/S 143(2). IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED ITS B OOKS OF 16 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... ACCOUNTS AND OTHER DOCUMENTS WHICH WERE DULY EXAMIN ED BY THE AO. WHILE EXAMINING THE EXPENDITURE CLAIMED IN THE PROFIT & LOSS A/C, THE AO NOTICED THAT THE ASSESSEE HAS PAID AN A MOUNT OF RS.93,27,000 TO M/S VINAY TRADING CORPORATION. THE AO ASKED FOR THE DETAILS OF PAYMENT MADE TO THE SAID PARTY. IN RESPONSE TO THE QUERY MADE BY THE AO, HE ASSESSEE SUBMITTED THAT TH E PAYMENT OF RS.93,27,000 WAS PAID TO M/S VINAY TRADING CORPORAT ION TOWARDS COMMISSION FOR FACILITATING THE RATE CONTRACT WITH GOVERNMENT OF KARNATAKA. IN SUPPORT OF SUCH EXPLANATION, THE ASSE SSEE SUBMITTED THE PROCEEDINGS OF MEETINGS HELD WITH THE FIRM M/S VINAY TRADING CORPORATION. THE AO AFTER GOING THROUGH THE PROCEE DINGS BETWEEN THE ASSESSEE COMPANY AND M/S VINAY TRADING CORPORAT ION CAME TO A CONCLUSION THAT AS PER THE TERMS OF THE CONTRACTOR THE COMMISSION WILL BE PAID AS PER THE REQUEST OF THE LIAISON AGEN T TO THIRD PERSON WHICH EFFECTIVELY REMAINS THAT THE PERSON RENDERIN G SERVICES HAS NOT BEEN PAID AND THERE IS DIVERSION OF INCOME TO A THI RD PARTY. THE AO WHILE EXAMINING THE COMPUTATION OF CALCULATION OF C OMMISSION ON THE SUPPLIES MADE TO KARNATAKA GOVERNMENT FOUND THA T THE COMMISSION OF RS.93,27,000/- WAS PAID TOWARDS COMMI SSION FOR PAYMENT RECEIVED AMOUNTING TO RS.3,24,89,908. THUS , THE COMMISSION PAID COMES TO ABOUT 28.7% OF THE SALES W HEREAS AS PER THE POTENTIALSHOWN, THE GROSS PROFIT HAS BEEN DEC LARED AT 9% ONLY. THE AO THEREFORE FOUND THE COMMISSION TO BE EXCESSIVE. THE AO FURTHER HELD THAT THE ASSESSEE HAS NOT JUSTIFIED THE PAYMENT OF COMMISSION AT 28.7% TO M/S VINAY TRADING CORPORATIO N. SINCE THERE WAS NO XXXXXXXXX FURNISHED BY THE ASSESSEE TO SUBS TANTIATE THE SERVICES RENDERED BY THE AGENT M/S VINAY TRADING C ORPORATION FOR PROCURING ORDERS FROM KARNATAKA GOVERNMENT. ON THE AFORESAID CONCLUSION, THE AO DISALLOWED THE COMMISSION PAYMEN T OF RS.93,27,000/- AND ADDED IT TO THE TOTAL INCOME OF THE ASSESSEE. THE 17 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... ASSESSEE BEING AGGRIEVED CHALLENGED THE ADDITION BY FILING AN APPEAL BEFORE THE CIT (A). BEFORE THE CIT (A) BY REITERA TING ITS STAND TAKEN BEFORE THE AO, THE ASSESSEE CONTENDED THAT AS PER C LAUSE (IV) OF THE PROCEEDINGS ENTERED INTO WITH M/S VINAY TRADING COR PN., THE ASSESSEE HAD PAID COMMISSION TO THE PERSONS WHOSE N AMES WERE COMMUNICATED BY M/S VINAY TRADING CORPN. IN FACT, THE PERSON AND SIGNATORIES TO THE PROCEEDINGS, ONE OF THEM M/S DEE PAK KHURANA IS A PROPRIETOR AND SRI G. KOTHARI IS THE MANAGER OF M/ S. VINAY TRADING COMPANY. THE ASSESSEE CONTENDED THAT SRI D.KUMAR WAS APPOINTED AS CLASS-I AGENT TO LOOK AFTER THE COMPANYS BUSINE SS ACTIVITIES IN THE KARNATAKA STATE AND BECAUSE OF HIS GOOD OFFICES, T HE COMPANY COULD PROCURE A RATE CONTRACT FOR SUPPLY OF XXXXXXXXXX F OR USE IN THE GOVERNMENT HOSPITALS FOR THE PREVIOUS TWO YEARS EN DING ON 14-12- 2006. IT WAS CONTENDED THAT DUE TO THE EFFORTS O F MR. DEEPAK KHURANA. THE ASSESSEES RATE CONTRACT WAS ACCEPTED AT A HIGHER RATE OF RS.3367.60 PER VIAL AS AGAINST NORMAL SELLING P RICE OF RS.240/-. CONSIDERING THE PROCUREMENT OF RATE CONTRACT AS A VERY LUCRATIVE PRICE, THE ASSESSEE PAID HIGHER COMMISSION TO THE L IAISON AGENT FOR THE SERVICES RENDERED BY HIM. IT WAS FURTHER SUBMI TTED BY THE ASSESSEE THAT SRI DEEPAK KHURANA WAS ACTING AS ASSE SSEES LIAISON AGENT RIGHT FROM THE STAGE OF SUBMITTING TENDERS, G ETTING IT ACCEPTED FROM DECEMBER, 2004 ONWARDS. HE WAS ALSO LOOKING D ISTRIBUTION OF THE ASSESSEE- COMPANYS PRODUCTS IN VARIOUS HOSPITA LS IN KARNATAKA STATE AND ALSO FOLLOWED IT UP FOR GETTING ORDERS AN D COLLECTION OF MONEY. SHRI DEEPAK KHURANA ALSO HELPED THE ASSES SEE IN VARIOUS OTHER MATTERS/WAYS. THE CIT (A) AFTER CONSIDERING THE SUBMISSION MADE BY THE ASSESSEE AND ALSO MATERIALS PLACED BEFO RE HIM, ACCEPTED THE FACT THAT THERE IS NO DISPUTE REGARDIN G THE PAYMENT OF COMMISSION OF RS.93,27,000 BY THE ASSESSEE AS PER A N AGREEMENT ENTERED INTO WITH THE AGENT. THE CIT (A) ALSO FOU ND THE REJECTION OF 18 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... CLAIM OF THE ASSESSEE BY THE AO AS NOT CORRECT SINE THE AO HAS NOT GIVEN ANY COGENT REASON FOR HIS DECISION AND HAS DI SALLOWED THE COMMISSION ONLY ON THE GROUND THAT THE COMMISSION P AYMENT AMOUNTS TO 28.7% OF THE RECEIPTS WHEREAS THE ASSESS EE HAS DISCLOSED GROSS PROFIT AT ONLY 9%. THE CIT (A) HOWEVER DIRE CTED THE AO TO RE- COMPUTE THE PAYMENT OF COMMISSION BY ADOPTING THE P RICE PER VIAL. THE FINDING OF THE CIT (A) IN THIS REGARD IS EXTRAC TED HEREUNDER FOR SAKE OF CONVENIENCE:- THE SUBMISSIONS MADE BY THE APPELLANT WERE CONSI DERED AND ALSO SEEN THE CIRCUMSTANCES UNDER WHICH THE AO HAS DENIE D THE ENTIRE PAYMENT OF COMMISSION. THERE IS NO DISPUTE THAT TH E CLAIM OF THE APPELLANT IS RS.93,27,000/-, WHICH WAS PAID/ PAYABL E AS PER AN AGREEMENT. IT IS THE CLAIM OF THE APPELLANT THAT T HE ISSUE OF TENDER BY GOVERNMENT OF KARNATAKA WAS BROUGHT TO ITS NOTIC E BY THE AGENT AND THAT ITS HIGHER RATES WERE GOT ACCEPTED AT RS.3 36.60 PER VIAL AS AGAINST NORMAL SELLING PRICE OF RS.240/-. BUT THEN , WHAT WERE THE CIRCUMSTANCES UNDER WHICH HIGHER RATES PER VIAL WER E ACCEPTED WERE NOT FURNISHED BY THE APPELLANT. S AT THE SAME TIME REJECTING THE ENTIRE CLAIM OF THE APPELLANT ON THIS ISSUE BY THE AO IS ALSO NOT CORRECT, BECAUSE THE AO HAS NOT GIVEN ANY COGENT RE ASONS FOR HIS DECISION. THE PLEA OF THE AO THAT THE COMMISSION P AYMENTS, WHICH IS 28.7% OF RECEIPTS THROUGH THE AGENT WAS NOT JUSTIFI ABLE IN LIGHT OF THE FACT THAT THE GP IS ONLY 9%, IS DIFFICULT TO COMPRE HEND. IN THE CIRCUMSTANCES, IN VIEW OF THE MATERIAL ON RECORD, E ITHER AO IS CORRECT IN DISALLOWING THE ENTIRE COMMISSION PAYMENTS OR TH E APPELLANT IS CORRECT IN PAYING HIGHER PRICE OF RS.336.60 PER VIA L, WHEN THE PREVAILING RATE IN THE MARKET IS RS.240/- PER VIAL. IN THE GIVEN FACTUAL MATRIX, I AM OF THE CONSIDERED OPINION THAT ENDS OF JUSTICE ARE MET IF THE ORDERS PROCURED THROUGH THE AGENT AT RS.3,24,89 ,908 ARE 19 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... RECOMPUTED ADOPTING THE PRICE PER VIAL AS DISCUSSED HEREIN ABOVE ON WHICH SAME YARD STICK IS ADOPTED FOR WORKING OUT TH E COMMISSION INVOLVED AND THE AO IS DIRECTED ACCORDINGLY. X. THE LEARNED AR SUBMITTED BEFORE US THAT THE PAYM ENT OF COMMISSION AS PER THE TERMS OF MEMORANDUM OF UNDERS TANDING ENTERED INTO BETWEEN THE ASSESSEE COMPANY WITH M/S VINAY TRADING COMPANY, THE LEANED AR INVITED OUR ATTENTION TO TH E PROCEEDINGS OF THE MEETINGS DATED 21-1-2005 WHICH IS AT PAGE-58 OF THE PAPER BOOK. THE LEARNED AR SUBMITTED THAT BECAUSE OF THE AWARDS THE LIAISON AGENTS, THE ASSESSEE WAS ABLE TO PROCURE THE RATE C ONTRACT FROM GOVERNMENT OF KARNAKATA FOR SUPPLY OF ANTI SNAKE VE NOM FOR A PERIOD OF 24 MONTHS. THEREFORE, THE ASSESSEE HAS P AID COMMISSION AS PER THE TERMS OF THE PROCEEDINGS HELD ON 21-1-20 05. THE LEARNED AR FURTHER SUBMITTED THAT THE CONTRACT IS A CONTINU ING CONTRACT FROM THE FINANCIAL YEAR 2004-05 AND THE COMMISSION PAID FOR SIMILAR SERVICES RENDERED BY M/S. VINAY TRADING COMPANY WAS CLAIMED IN THE ASSESSMENT YEARS 2005-06 AND 2006-07 ALSO WHICH WER E ACCEPTED IN THE ASSESSMENT ORDER PASSED FOR THE RESPECTIVE ASSE SSMENT YEARS. IN THIS REGARD, THE LEARNED AR REFERRED TO THE ANNUAL REPORT AND ASSESSMENT ORDER OF THE ASSESSMENT YEAR 2005-06 AND 2006-07 FORMING PART OF THE PAPER BOOK. THE LEARNED AR SUB MITTED THAT WHEN THE AO HAS ACCEPTED THE PAYMENT OF COMMISSION FOR THE PRECEDING TWO ASSESSMENT YEAR, THERE IS NO SUCH CHA NGED OR INTERVENING CIRCUMSTANCES WHICH COULD HAVE NECESSIT ATED DISALLOWANCE OF COMMISSION FOR THE ASSESSMENT YEAR 2007-08. THE LEARNED AR FURTHER SUBMITTED THAT THE ENTIRE COMMIS SION HAS BEEN PAID THROUGH CHEQUES WHICH COULD HAVE BEEN EASILY V ERIFIED BY THE AO . IT IS FURTHER CONTENTION OF THE LEARNED AR THA T THE DIRECTION OF 20 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... THE CIT (A) IS ALSO NOT SIMILAR HOW PAYMENT OF COMM ISSION IS TO BE RECOMPUTED. X. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THE ACCEPTANCE OF PAYMENT COMMISSION FOR THE ASSESSMENT YEARS 2005- 06 AND 2006-07 CANNOT BE A GROUND TO ALLOW SIMILAR PAYMENT IN THE ASSESSMENT YEAR UNDER DISPUTE. THE LEARNED DR SUBM ITTED THAT THE FACTS OF EACH YEAR WOULD GOVERN ON THE BASIS OF F INDING IN THAT PARTICULAR YEAR AND IT CANNOT BE MADE APPLICABLE TO ANOTHER YEAR. THE LEARNED DR RELYING UPON A DECISION OF HONBLE A P HIGH COURT IN THE CASE OF CIT VS. TCI (256 ITR 701) CONTENDED THA T THE PAYMENT OF COMMISSION IS TO BE ALLOWED AS AN EXPENDITURE ONLY WHEN THE ASSESSEE BY PRODUCING SUFFICIENT PROOF ESTABLISHING THE FACT THAT THE PAYMENT WAS MADE FOR COMMERCIAL CONSIDERATION. X. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS A FACT ON RECORD THAT THE ASSESSEE HA S ENTERED INTO A RATE CONTRACT WITH THE GOVERNMENT OF KARNATAKA FOR SUPPL Y OF ANTI SNAKE VENOM FOR TWO YEARS ENDING DECEMBER, 2006. IT IS C LAIM OF THE ASSESSEE THAT THE PROCUREMENT OF RATE CONTRACT WAS FACILITATED DUE TO THE EFFORTS OF THE LIAISON AGENT APPOINTED BY M/S. VINAY TRADING COMPANY. IT IS FURTHER CONTENTION OF THE LEARNED AR THAT ONLY DUE TO THE EFFORTS THE LIAISON AGENT, THE ASSESSEE COMPANY WAS ABLE TO PROCURE THE RATE CONTRACT AT A MUCH HIGHER RATE THA N THE PREVAILING MARKET RATE. THE AO HAS DISALLOWED THE PAYMENT OF COMMISSION ONLY ON INTERPRETING CLAUSE(IV) OF MINUTES OF THE PROCEE DINGS WHICH SIMPLY STATES THAT THE AGENTS WILL NOMINATE THE PERSON IN WHOSE NAME THE COMMISSION IS TO BE PAID. THAT CANNOT BY ITSELF BE A GROUND FOR 21 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... REJECTION OF THE ASSESSEES CLAIM. SIMILARLY, THE CONCLUSION ARRIVED AT BY THE AO THAT THE COMMISSION PAID APPEARS TO BE HI GHER AND EXCESSIVE IS ALSO NOT SUPPORTED BY VALID REASONS. THE FACT THAT THE COMMISSION PAID DURING THE IMPUGNED ASSESSMENT YEAR IS FOR A RATE CONTRACT WHICH CONTINUED FROM THE PRECEDING ASSESSM ENT YEAR AND COMMISSION PAID IN THE PRECEDING YEAR I.E., 2005-06 AND 2006-07 WAS ACCEPTED BY THE IT AUTHORITIES CANNOT BE TOTALLY IG NORED. THE LEARNED DRS CONTENTION THAT EACH ASSESSMENT YEAR I S A SEPARATE AND FACTS OF EARLIER YEAR CANNOT BE MADE APPLICABLE TO ANOTHER YEAR THOUGH HE IS CORRECT BUT AT THE SAME TIME, PRINCIPL ES OF CONSTANCY IS ALSO TO BE MAINTAINED. IT IS ALSO PERTINENT TO NOTE THAT THE ENTIRE COMMISSION WAS PAID THROUGH BANKING CHANNEL, THERE FORE THE GENUINENESS OF THE PAYMENT CAN BE VERIFIED BY EXAMI NING THE BANK ACCOUNT. THESE ASPECTS HAVE NOT BEEN PROPERLY CONS IDERED EITHER BY THE AO OR BY THE CIT (A). THE AO COULD HAVE SUMMON ED THE CONCERNED PERSONS TO WHOM COMMISSION HAS BEEN PAID TO FINDING OUT THE GENUINENESS OF THE CLAIM MADE BY THE ASSESS EE WHICH HAS NOT BEEN DONE. IN AFORESAID VIEW OF THE MATTER, WE THINK IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF THE AO WHO S HALL CONSIDER THE ISSUE OF THE EXPENDITURE CLAIMED TOWARDS PAYMENT CO MMISSION TO THE LIAISON AGENTS AFTER CAUSING PROPER ENQUIRY I F THE ASSESSEE IS ABLE TO PROVE THAT COMMISSION HAS ACTUALLY BEEN PAI D AND IT WAS FOR THE BUSINESS CONSIDERATION, THEN THE EXPENDITURE CL AIM SHOULD BE ALLOWED. THE AO SHALL AFFORD A REASONABLE OPPORTUN ITY OF BEING HEARD BEFORE COMPLETION OF THE PROCEEDINGS. X. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE AS WELL AS DEPARTMENT ARE TREATED AS ALLOWED FOR STATISTICAL P URPOSE. 22 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... ORDER PRONOUNCED IN THE COURT ON -10-2012. (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE SEPT., 2012. COPY TO:- 1) XXXXXXXXXXXXXXXXXXXXX. 2)XXXXXXXXXXXXXXXXXXXXXXX 3) THE CIT (A), HYDERABAD 4) THE CIT CONCERNED, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. JMR* 23 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD... 24 ITA NO.893 OF 2012 M/S. DECCAN CHRONICLE HOLDING LTD..,HYD...