M/s Rawel Electric Works, Patiala V. ITO, W-1, Patiala

ITA 897/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6000 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-07-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 21-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: K P BAJAJ
• Keywords: Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 897/CHD/2018 / ASSESSMENT YEAR : 2011-12 M/S RAWAL ELECTRIC WORKS, RAGHO MAJRA PATIALA VS. THE ITO, WARD-1, PATIALA ./PAN NO: AAEFR4010R / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI K.P.BAJAJ, ADVOCATE ' ! / REVENUE BY : SH. MANJIT SINGH, CIT DR # $ % /DATE OF HEARING : 22.07.2019 &'() % / DATE OF PRONOUNCEMENT : 01.08 .2019 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 12.04.2018 OF THE COMMISSIONER OF INCOM E TAX (APPEALS), PATIALA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE SOLE GROUND TAKEN BY THE ASSESSEE IN THIS AP PEAL IS AGAINST THE UPHOLDING OF ADDITION OF RS. 1,95,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF COMMISSION PAID TO ONE S. JASWINDER S INGH S/O SHRI GURNAM SINGH. 3. BEFORE THE ASSESSING OFFICER, IT WAS EXPLAINED T HAT THE ASSESSEE IS ENGAGED IN THE BUSINESS ACTIVITY OF SALE OF ELECTRI CAL GOODS. THAT SHRI JASWINDER SINGH HAD PROCURED ORDERS FOR THE ASSESSE E AND BECAUSE OF ITA NO. 897-CHD-2018- SH. RAWAL ELECTRIC WOKS, PATIALA 2 WHICH THERE WAS SUBSTANTIAL INCREASE IN THE SALES OF THE ASSESSEE AS COMPARED TO EARLIER YEARS. IT WAS, THEREFORE, EXPL AINED THAT THE AMOUNT OF AFORESAID COMMISSION WAS PAID TO SHRI JASWINDER SINGH IN LIEU OF HIS SERVICES. HOWEVER, THE ASSESSING OFFICER DID NOT A GREE WITH THE AFORESAID EXPLANATION OBSERVING THAT THE ASSESSEE H AD NOT PRODUCED SHRI JASWINDER SINGH BEFORE HIM. FURTHER, IT WAS NOT EXP LAINED AS TO FROM WHICH OF THE PARTIES SHRI JASWINDER SINGH PROCURED THE ORDERS. WHETHER THOSE WERE THE EXISTING CUSTOMERS OF THE ASSESSEE OR NEW CUSTOMERS. FURTHER, FROM HIS NAME, AS IT APPEARED, THAT SHRI JASWINDER SINGH WAS SON OF ONE OF THE PARTNERS OF THE ASSESSEE FIRM, H ENCE, A SPECIFIC QUESTION WAS ASKED WHETHER SHRI JASWINDER SINGH WAS COVERED UNDER THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT. SINCE THE ASSESSEE COULD NOT GIVE SATISFACTORY EXPLANATION IN THIS RESPECT, THE ASSESSING OFFICER MADE THE IMPUGNED ADDITION. 4. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION SO MADE BY THE ASSESSING OFFICER. 5. NOW BEFORE THIS TRIBUNAL, THE ASSESSEE HAS GIVEN A LIST OF NEW PARTIES AND HAS CONTENDED THAT BECAUSE OF THE EFFOR TS OF SHRI JASWINDER SINGH, THE ASSESSEE PROCURED BUSINESS FROM THESE NE W PARTIES. THE LD. COUNSEL HAS ALSO SUBMITTED THAT THE ASSESSING OFFIC ER, IN FACT, HAD NOT ASKED THE ASSESSEE TO PRODUCE SHRI JASWINDER SINGH, HOWEVER, HE HAS FAIRLY ADMITTED THAT SHRI JASWINDER SINGH IS SON OF ONE THE PARTNERS OF THE ASSESSEE. ITA NO. 897-CHD-2018- SH. RAWAL ELECTRIC WOKS, PATIALA 3 THE LD. COUNSEL HAS SUBMITTED THAT THE ASSESSEE IS READY TO FURNISH THE NECESSARY DETAILS INCLUDING THE LIST OF PARTIES TO WHOM THE SALES WERE MADE AND REGARDING THE EFFORTS DONE BY SHRI JASWIND ER SINGH TO PROCURE THE BUSINESS FOR THE ASSESSEE. IN VIEW OF THIS, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR ASSESSMENT AFRESH ON THIS ISSUE. THE ASSESSING OFFICER IS DIRECTED TO GIVE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE NEC ESSARY DETAILS AND EVIDENCES REGARDING THE GENUINENESS OF THE COMMISSI ON PAID TO SHRI JASWINDER SINGH AND DECIDE THE ISSUE AFRESH IN ACCO RDANCE WITH LAW. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01.08.2019. SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 01.08.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR