ATIQUR REHMAN CHOUDHARY, MUMBAI V. ITO 22(2)(1), MUMBAI

ITA 9070/MUM/2010

• Counselvise Citation: 907019914 RSA 2010
• Duration Of Justice: 3 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 27-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DR PRAYAG JHA
• Keywords: Principle of natural justice
• Section: 143(3); 68

Judgement Text

ITA/9070/M/2010 ATIQUR REHMAN CHOUDHARY 1 , INCOME TAX APPELLATE TRIBUNAL,MUMBAI - A BENCH. , ! ' !# $ , # ! ' BEFORE S/SH. JOGINDER SINGH, JUDICIAL MEMBE R & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.9070/MUM/2010, ! ! ! ! % % % % / ASSESSMENT YEAR 2007-08 ATIQUR REHMAN CHOUDHARY SEC. 14, SHOP NO. 128, KURLA SCRAPE MERCHANTS ASSOCIATION, GHATKOPER MANKHURD LINK ROAD, NEW MANDALA, MUMBAI-400043 PAN: ACXPC6357K VS. I T O 22(2)(1) MUMBAI ( !&' / APPELLANT) ( ()&' / RESPONDENT) !*+ !*+ !*+ !*+ , , , , # ## # / ASSESSEE BY : DR. PRAYAG JHA & PRATEEK JHA !' - , # / REVENUE BY : SHRI JEEVAN LAL ! ! ! ! - -- - +!. +!. +!. +!. / DATE OF HEARING : 08-09-2014 /% ! - +!. / DATE OF PRONOUNCEMENT : 12-09-2014 , 1961 1961 1961 1961 - !! - !! - !! - !! 254 254 254 254( (( (1 11 1) )) )# ++ #8 # ++ #8 # ++ #8 # ++ #8 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM # ! # ! # ! # ! ' ' ' ' !# $ !# $ !# $ !# $ # ## # ! ! ! ! : CHALLENGING THE ORDER DT.06.10.2010 OF THE CIT(A)-3 3,MUMBAI, ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1(I)THE LD CIT (A) ERRED IN CONFIRMING THE ADDITIO N OF RS. 1,00,000/-MADE U/S 68 WITHOUT APPRECIATING THAT THE APPELLANT HAD TAKEN THIS LOAN FROM M/S. AMBIKA ENTERPRISES BY ACCOUNT PAY CHEQUE AND HAD DISCHARGED HIS ONUS COMPLETELY. II) THE LD CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 5,00,000/- MADE U/S 68 IN RESPECT OF LOAN TAKEN FROM M/S TUBA TRADING COMPANY BY BANK AND FOR WHICH CONFIRMATION LETTER WAS FILED WITHOUT APPRECIATING THE FACT THAT THIS AMOUNT WAS NOT BORROWED FROM MR. GULZAR. 2 (1)THE LD CIT (A) ERRED IN UPHOLDING THE ADDITION OF RS. 51,03,305/- ON ACCOUNT OF INFLATION OF PURCHASES WITHOUT APPRECIATING THE FACTS OF THE CAS E. (II)WITHOUT PREJUDICE TO GROUND NO. 2(I), THE LD CI T (A) EARNED IN NOT APPRECIATING THAT WHEN SALE OF GOODS AS PER ACCOUNTS WAS ACCEPTED, PURCHASE OF THE SAME GOODS COULD NOT HAVE BEEN DISALLOWED AND THE LD AO COULD HAVE AT BEST BROUGHT TO TAX THE PROFIT ON THESE TRANSACTIONS. 3 (I] THE LD CIT (A) ERRED IN ENHANCING THE APPELLA NTS INCOME BY A SUM OF RS. 4,82,345/-WITHOUT ALLOWING HIM A REASONABLE OPPORTUNITY OF BEING HEAR D THOUGH SHE WAS STATUTORILY REQUIRED TO DO SO U/S 251(2) OF THE IT ACT. (II)WITHOUT PREJUDICE TO THE ABOVE, THE LD CIT (A) FURTHER ERRED IN ENHANCING THE INCOME BY RS. 4,82,345/- ON THE BASIS OF RECONCILIATION STATEMENT WITHOUT APPRECIATING THAT SUCH STATEMENT WAS SUBMITTED BEFORE THE LD AO IN COURSE OF ASSESSMENT PROCEEDINGS FOR A Y 2006-07 AND THE SAME WAS ACCEPTED BY HIM. 4THE LD CIT (A) ERRED IN SUSTAINING THE DISALLOWANC E OF RS. 1,08,085/- OUT OF LABOUR CHARGES THOUGH THE AMOUNT WAS PAID TO OUTSIDE PARTIES AND T HE EXPENSE WAS OF REVENUE NATURE INCURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSE. 5(I) THE LD CIT (A) ERRED IN UPHOLDING THE DISALLOW ANCE OF RS. 1,41,480/- MADE U/S 40 (A) (IA) WITHOUT APPRECIATING THAT THE APPELLANT WAS UNDER B ONA FIDE BELIER THAT TAX WAS NOT REQUIRED TO BE DEDUCTED ON SUCH PAYMENT. ITA/9070/M/2010 ATIQUR REHMAN CHOUDHARY 2 (II)THE LD CIT (A) FURTHER ERRED IN SUSTAINING THE DISALLOWANCE OF RS 1,41,480/- WITHOUT APPRECIATING THAT THE AMOUNT WAS ALREADY PAID DURIN G THE FINANCIAL YEAR AND WAS NOT OUTSTANDING ON 31.03.2007 AND HENCE DISALLOWANCE U/S 40(A)(IA) WAS NOT JUSTIFIED. 6 THE LD CIT (A) ERRED IN SUSTAINING THE ADDITIONS AND DISALLOWANCE RELYING ENTIRELY ON THE REMAND REPORT OF THE AO AND WITHOUT APPRECIATING TH E FACTS OF THE CASE AND APPLICATION OF HER OWN MIND. 7 THE HONBLE ITAT MAY DELETE THE DISALLOWANCES CON TESTED IN THE ABOVE GROUNDS. 8 THE APPELLANT PRAYS FOR LEAVE TO ADD, MODIFY OR A LTER HIS GROUNDS OF APPEAL OR TO ADD NEW GROUNDS OF APPEAL AND LEAD EVIDENCE. 2. ASSESSEE,AN INDIVIDUAL,ENGAGED IN THE BUSINESS OF T RADING OF SCRAP,FILED HIS RETURN OF INCOME ON 31.10.07DECLARING TOTAL INCOME OF RS.1,93,598/-.ASS ESSING OFFICER(AO)FINALISED THE ASSESSMENT U/S.143(3) OF THE ACT,ON 24.12.2009, DETERMINING TH E TOTAL INCOME AT RS.2,57,82, 360/-. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORISED REPRESEN TATIVE(AR) DID NOT PRESS GROUND OF APPEAL NO.1(I),HENCE SAME STANDS DISMISSED. GROUND NO.1(II)IS ALSO ABOUT LOAN TAKEN BY THE ASSE SSEE,AMOUNTING TO RS. 5 LAKHS.DURING THE ASSESSMENT PROCEEDINGS,THE AO MADE AN ADDITION OF R S.10 LAKHS TO THE INCOME OF THE ASSESSEE,U/S.68 OF THE ACT.CERTAIN DOCUMENTS WERE P RODUCED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS BEFORE THE FIRST APPEAL AUTHORITY (FAA) .AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE REMAND REPORT, THE FAA RESTRICTED THE ADDITION TO RS.5 LAKHS. 2.1. BEFORE US,THE AR ARGUED THAT THE ASSESSEE HAD FURNI SHED ALL THE NECESSARY DOCUMENTS PROVING THE LOAN TRANSACTION WAS GENUINE,THAT THEAO/ FAA HA D NOT GIVEN ANY REASON FOR REJECTING THE DOCUMENTS PRODUCED BY THE ASSESSEE,THAT FAA HAD NOT PASSED SPEAKING ORDER.HE REFERRED TO THE BANK STATEMENT AND CONFIRMATION LETTER OF THE CREDI TOR.DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE FAA. 2.2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.IT IS A FACT THAT THE ASSESSEE HAD FURNISHED DOCUMENTARY EVIDENCES ABOUT THE LOAN TRANSACTION ENTERED IN TO WITH ONE GULZAR AND HAD PRODUCED BANK STATEMENT IN THIS REGA RD,THAT THE AO OR THE FAA HAD NOT COMMENTED UPON THOSE DOCUMENTS THOUGH SAME WERE TO BE CONSIDERED BEFORE ARRIVING AT FINAL CONCLUSION. IN THESE CIRCUMSTANCES,WE ARE OF THE OP INION THAT THE MATTER NEEDS FURTHER INVESTIGA - TION.SO,WE ARE RESTORING BACK THE MATTER TO THE FIL E OF THE AO FOR FRESH ADJUDICATION,WHO WILL DECIDE THE ISSUE AFTER AFFORDING A REASONABLE OPPOR TUNITY OF HEARING TO THE ASSESSEE.GROUND NO.1(II)IS PARTLY ALLOWED IN FAVOUR OF THE ASSESSEE . 3. SECOND GROUND OF APPEAL PERTAINS TO ADDITION OF RS. 51,03,305/- ON ACCOUNT OF INFLATION OF PURCHASES.DURING THE ASSESSMENT PROCEEDINGS,AO FOUN D THAT THE ASSESSEE HAD CLAIMED THAT HE HAD MADE PURCHASES FROM BHARAT PETROLEUM CORPORATION LI MITED(BPCL) WORTH RS.1.51 CRORES. HE MADE INQUIRIES WITH BPCL AND WAS INFORMED THAT THE ASSESSEE HAD PURCHASES OF RS.87.42 LAKHS ONLY DURING THE YEAR UNDER CONSIDERATION.HE FURTHER FOUND THAT THE ASSESSEE HAD MADE DEPOSIT OF RS.10.57 LAKHS WITH BPCL.HE ISSUED A SHOW CAUSE NOT ICE TO THE ASSESSEE ASKING AS TO WHY AN ADDITION OF RS.47.63 LAKHS (RS.37.06LAKHS+10.57 LAK HS)SHOULD NOT BE MADE.THE ASSESSEE REPLIED THAT BPCL HAD NOT CONSIDERED THREE BILLS OF RS.64.5 2 LAKHS,WHILE SENDING INFORMATION TO THE DEPARTMENT ABOUT HIS TRANSACTIONS. AFTER CONSIDERIN G THE REPLY OF THE ASSESSEE,HE HELD THAT THE CLAIM MADE BY THE ASSESSEE ABOUT NON-CONSIDERATION OF THREE BILLS WAS FACTUALLY INCORRECT,THAT THAT THE ASSESSEE HAD MADE PAYMENTS ABOUT TWO TENDERS D URING THE AY.2006-07 THAT WERE CLAIMED TO HAVE BEEN ENTERED IN TO DURING THE YEAR UNDER APPEA L,THAT THE ASSESSEE HAD NOT EXPLAINED THE THIRD TENDER,THAT THE CLAIM MADE BY THE ASSESSEE OF PURCH ASE OF RS. 64.52 LAKHS IN THE YEAR UNDER APPEAL WAS NOT CORRECT AND WAS A WILLFUL ATTEMPT TO DEFRAU D REVENUE. FINALLY,HE HELD THAT THE ASSESSEE HAD INFLATED PURCHASES WITH BPCL TO THE TUNE OF RS.64,5 2,266/- AND THE SAID AMOUNT HAD TO BE ADDED TO THE INCOME OF THE ASSESSEE. ITA/9070/M/2010 ATIQUR REHMAN CHOUDHARY 3 3.1. AGAINST THE ORDER OF THE AO ASSESSEE PREFERRED AN A PPEAL BEFORE THE FAA.AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE ,SHE CALLED FOR A R EMAND REPORT FROM THE AO.IN HIS REMAND REPORT THE AO STATED THAT THAT THE PURCHASE OF RS. 11,84,6 02/- AND OF RS. 39,18,502/- PERTAINING TO TENDER NO, 80/06 AND 100/06 HAD ALREADY BEEN CLAIMED BY T HE ASSESSEE IN AY.2006-07 AND WAS DULY ALLOWED IN THAT YEAR VIDE ORDER U/S. 143(3) DATED 9 .12.2008,THAT ON CONFRONTATION THE ASSESSEE ALSO ADMITTED THE SAME IN HIS SWORN STATEMENT RECORDED U /S.131 OF THE ACT,THAT THE ADDITION MADE WAS AS PER LAW,THAT THE PURCHASE OF RS. 13, 49,161.65 P ERTAINING TO TENDER NO. 113/06 HAD BEEN MADE IN A.Y. 2007-08,THAT THE ADDITION COULD BE DELETED, THAT THE LEDGER ACCOUNT OF BPCL CLEARLY MENTIONED THE AMOUNT RECEIVED AND VARIOUS INVOICES ISSUED IN A TENDER,THAT THE ASSESSEE RECOGNISED HIS PURCHASE ON THE BASIS OF THE INVOICE S ISSUED BY BPCL AND NOT OR THE BASIS OF CASH MEMO CUM FINAL SALE LETTER,THAT THE ASSESSEE HAD NO T MADE ANY PURCHASE ON CREDIT WITH BPCL,WHEREAS HE HAD SHOWN RS. 37,06,019.18 AS SUNDR Y CREDITOR IN HIS BALANCE SHEET AS ON 31.03.2007,THAT THE ASSESSEE HAD CLAIMED THAT HE TR EATED THE PAYMENTS MADE TO BPCL DURING A.Y. 2006-07 AS DEPOSITS,THAT IN THE BALANCE SHEET AS ON 31.03.2006 NOTHING HAD BEEN SHOWN AS ADVANCES/DEPOSITS AGAINST BPCL.SHE,HAVING CONSIDERE D THE ASSESSMENT ORDER AND THE REMAND REPORT,HELD THAT THE BILL FOR AMOUNT OF RS.13.49 LA KHS PERTAINING TO TENDER NO.113/06 WAS RIGHTLY REFLECTED IN THE AY.2007-08,THAT OTHER TWO BILLS PE RTAINING TO THE EARLIER AY.WERE DULY REFLECTED IN THAT YEAR,THAT THE ASSESSEE HAD SHOWN SAME PURCHASE IN THE YEAR UNDER CONSIDERATION ALSO, THAT PURCHASE AMOUNTING TO RS.51,03,104/-(RS.11.84 LAKHS + RS.39.18 LAKHS) HAD BEEN WRONGLY DEBITED IN THE ACCOUNTS PREPARED FOR THE YEAR UNDER CONSIDERATION,THAT THE ARGUMENT TAKEN BY THE ASSESSEE FOR APPLYING GROSS PROFIT RATIO FOR THE PU RCHASE OF RS.51.03 LAKHS WAS WITHOUT ANY LOGIC AND REASON.FAA DELETED THE ADDITION OF RS.13.49 LAK HS OF BILL DATED 29. 05. 2006.FOR THE REMAINING TWO PURCHASE-BILLS OF RS.51.03 LAKHS,THE FAA UPHELD THE ORDER OF THE AO. 3.2. BEFORE US,AR STATED THAT THERE WAS MISTAKE ON PART OF THE ASSESSEE,THAT HE WAS A SMALL ASSESSEE,THAT THE BOOKS OF ACCOUNTS WERE AUDITED,TH AT THE AUDITORS ALSO DID NOT POINT OUT THE DEFECTS,THAT PURCHASES WERE MADE IN THE EARLIER YEA R BUT WERE SHOWN IN THE BOOKS OF ACCOUNTS FOR THE YEAR UNDER APPEAL BY MISTAKE,THAT ONLY GROSS PR OFIT SHOULD BE ADDED TO THE INCOME OF THE ASSESSEE.HE RELIED UPON THE CASES OF BHOLANATH POLY FAB PVT.LTD.(355ITR290)AND SATYANARYAN RATHI(351ITR150) DELIVERED BY THE HONBLE GUJARAT H IGH COURT.DR ARGUED THAT THE ASSESSEE HAD NOT MADE ANY PURCHASE DURING THE YEAR UNDER APPEAL FROM BPCL,THAT BOOKS OF ACCOUNTS WERE NOT SHOWING CORRECT TAXABLE INCOME OF THE ASSESSEE,THAT THE FAA HAD CONSIDERED ALL THE ARGUMENTS ADVANCED BY THE ASSESSEE. 3.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.THE FACTS OF THE CASE ARE THAT THE ASSESSEE WAS PURCHASING GOODS FROM BPC L,THAT THERE WAS DIFFERENCE IN THE PURCHASE ACCOUNT REFLECTED IN THE BOOKS OF ACCOUNTS AND THE INFORMATION SUPPLIED BY BPCL,THAT THE AO CALLED FOR FURTHER INFORMATION FROM BPCL,THAT THE S TATEMENTS OF THE ASSESSEE WERE RECORDED BY THE AO U/S.131 OF THE ACT,THAT THE ASSESSEE ADMITTED TH AT OUT OF THE THREE BILLS ONLY ONE BILL PERTAINED TO THE YEAR UNDER CONSIDERATION,THAT THE AO,IN HIS REMAND REPORT,INFORMED THE FAA TO ACCEPT THE GENUINENESS OF ONE OF THE TRANSACTION,THAT FAA UPHE LD ADDITION ABOUT REMAINING TWO BILLS ONLY. ON A SPECIFIC QUERY BY THE BENCH,THE AR ADMITTED TH AT THE ASSESSEE WAS FILING HIS RETURN OF INCOME FOR LAST 7-8 YEARS AND THE BOOKS OF ACCOUNTS WERE BEING AUDITED.FROM THE ABOVE IT IS CLEAR THAT THE CLAIM MADE BY THE ASSESSEE ABOUT PURCHASE OF GOODS WORTH RS.51.03 LAKHS FROM BPCL WAS FACTUALLY INCORRECT AND IT IS ONLY AFTER THE AO MADE INVESTIGATION AND RECORDED HIS STATEMENTS THAT THE ASSESSEE ADMITTED THAT ENTRIES IN THE BOOK S OF ACCOUNTS TO THAT EXTENT WERE INCORRECT.THE ENTRIES MADE IN THE PURCHASE ACCOUNT AFFECTED THE C LOSING STOCK FOR THE YEAR AND IN TURN THE TAXABLE PROFIT.BY INFLATING THE PURCHASES THE ASSESSEE HAS DEFLATED THE TAXABLE INCOME FOR THE YEAR.IT IS NOT THE CASE WHERE THE ASSESSEE PURCHASES GOODS FROM A AND PROCURES BILL FROM B.IT IS A CASE WHERE NO PURCHASE WAS MADE AND IN THE BOOKS OF ACCOUNTS PURC HASE WORTH RS.51.03 LAKHS WAS SHOWN.IN OUR OPINION,THE FAA WAS JUSTIFIED IN REJECTING THE CLAI M OF THE ASSESSEE THAT ONLY GROSS PROFIT SHOULD ITA/9070/M/2010 ATIQUR REHMAN CHOUDHARY 4 BE ADDED TO THE INCOME OF THE ASSESSEE.THE CASE LAW S RELIED UPON BY THE ASSESSEE ALSO DEAL WITH THE SITUATION WHERE THE ASSESSEES HAD PURCHASED GOO DS FROM ONE PERSON AND THE BILLS WERE ISSUE BY SOME OTHER PERSON.THE CASE UNDER CONSIDERATION HAS NO SIMILARITY WITH THE CASES RELIED UPON. 4. NEXT GROUND IS ABOUT ENHANCEMENT OF INCOME BY RS.4, 82,345/- BY THE FAA.DURING THE APPELLATE PROCEEDINGS,SHE FOUND THAT THERE WERE DISCREPANCIES IN THE RECONCILIATION STATEMENT FILED BY THE ASSESSEE WITH REGARD TO THE SCRAPE PURCHASED.SHE WA S OF THE OPINION THAT THE DIFFERENCE OF RS.4.82 LAKHS WAS NOT EXPLAINED BY THE ASSESSEE.THEREFORE,S HE MADE AN ADDITION OF RS.4,82,345/- TO THE TOTAL INCOME OF THE ASSESSEE.BEFORE US,THE AR CONTE NDED THAT THE FAA HAD ENHANCED THE INCOME WITHOUT ISSUING A NOTICE U/S.251(2) OF THE ACT.DR L EFT THE ISSUE TO THE DISCRETION OF THE BENCH. 4.1. WE FIND THAT THE FAA HAD NOT ISSUED ANY NOTICE,AS R EQUIRED BY THE PROVISIONS OF SECTION 251(2) OF THE ACT,BEFORE ENHANCING THE INCOME OF TH E ASSESSEE.THIS IS A CLEAR CUT VIOLATION OF THE NATURAL JUSTICE AS WELL AS OF THE MANDATE OF THE AC T.WE FIND THAT THE HONBLE DELHI HIGH COURT HAS,IN THE MATTER OF GEDORE TOOLS PVT. LTD.(238ITR2 68)HELD THAT THE POWER FOR ENHANCEMENT BY THE FAA WAS SUBJECT TO THE LIMITATION AS PROVIDED I N SUB-SECTION (2) OF SECTION 251 AND SUCH QUESTION COULD BE CONSIDERED ONLY IF NOTICE WAS GIV EN IN THAT REGARD.AS NO NOTICE WAS ISSUE BY THE FAA, SO,IN THE INTEREST OF JUSTICE MATTER IS RESTOR ED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION. HE IS DIRECTED TO GIVE REASONABLE OPP ORTUNITY OF HEARING BEFORE DECIDING THE ISUEE.GROUND NO.3 IS ALLOWED IN FAVOUR OF THE ASSES SEE,IN PART. 5. GROUND NO.4 IS DEALS WITH DISALLOWANCE OF RS. 1,08, 085/- OUT OF LABOUR CHARGES.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESS EE HAD CLAIMED PAYMENT OF LABOUR CHARGES OF RS. 10,80,850/-. SINCE THE SSESSEE HAD FAILED TO P RODUCE BOOKS OF ACCOUNTS, BILLS, VOUCHERS, ETC.,HE DISALLOWED 10% OF THE LABOUR CHARGES I.E. R S.1,08,085/- FOR WANT OF VERIFICATION.DURING THE REMAND PROCEEDINGS THE ASSESSEE FILED SOME DOCUMENT ARY EVIDENCES.BUT,THE AO WAS NOT SATISFIED WITH THE EXPLANATION FILED BY HIM.IN THE APPELLATE PROCEEDINGS,THE FAA CONFIRMED THE ADDITION MADE BY THE AO. 5.1. BEFORE US,THE AR STATED THAT EXPENDITURE WAS INCURR ED FOR CARRYING OUT BUSINESS OF THE ASSESSEE,THAT PAYMENTS WAS MADE TO OUTSIDE PARTIES, THAT THE DISALLOWANCE WAS ON HIGHER SIDE.HE REFERRED TO THE PAGES NO. OF THE PAPER BOOK.DR SU PPORTED THE ORDER OF THE FAA.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON R ECORD.WE FIND THAT THE ASSESSEE HAD FURNISHED DETAILS ABOUT THE CASH EXPENSES INCURRED DURING THE YEAR UNDER CONSIDERATION,THAT THE HAD MADE THE DISALLOWANCE FOR WANT OF VERIFICATION.WE ARE OF THE OPINION THAT TO MEET THE END OF JUSTICE DISALLOWANCE SHOULD BE RESTRICTED TO 5% IN PLACE OF 10%.GROUND NO.4 IS A PARTLY ALLOWED IN FAVOUR OF THE ASSESSEE. 6. LAST GROUND OF APPEAL PERTAINS TO DISALLOWANCE OF R S 1,41,480/-MADE U/S.40(A)(IA)OF THE ACT. THE ASSESSEE HAD CLAIMED PAYMENT OF COMMISSION CHAR GES OF RS. 1,41,480/-.AS PER THE AO,THE ASSESSEE DID NOT FURNISH ANY DETAILS IN RESPECT OF COMMISSION PAYMENT.THE AO FOUND THAT AS PER THE 3CD REPORT, THE ASSESSEE HAS NOT DEDUCTED ANY T DS ON THE PAYMENT IN QUESTION.HENCE, FOR WANT OF VERIFICATION,THE AO DISALLOWED AND ADDED BA CK RS. 1.41 LAKHS INCURRED UNDER THE HEAD COMMISSION CHARGES,INVOKING THE PROVISIONS OF SECTI ON 40(A)(IA) OF THE ACT.DURING THE REMAND PROCEEDINGS,THE ASSESSEE FILED DETAILS OF COMMISSIO N PAID TO VARIOUS PARTIES FOR TRANSPORT CHARGES.BUT THE AO WAS NOT SATISFIED WITH HIS EXPLA NATION AND HELD THAT THERE WAS VIOLATION OF THE PROVISIONS OF SECTION 40(A)(IA).FAA UPHELD THE ORDE R OF THE AO,WHILE DECIDING THE APPEAL FILED BY THE ASSESSEE. 6.1. BEFORE US,THE AR STATED THAT ALL THE PAYMENTS MADE BY THE ASSESSEE WERE LESS THAN 2500/-,THAT PROVISIONS OF TDS WERE NOT APPLICABLE IN THE CASE U NDER CONSIDERATION,THAT THE ASSESSEE WAS A SMALL ASSESSEE AND WAS NOT AWARE OF THE PROVISIONS OF THE ACT.HE REFERRED TO THE PAGE NO. OF THE ITA/9070/M/2010 ATIQUR REHMAN CHOUDHARY 5 PAPER BOOK.DR SUPPORTED THE ORDER OF THE FAA. WE HAVE HEARD THE REPRESENTATIVES OF BOTH THE SIDES .WE FIND THAT THE ASSESSEE HAD FURNISHED CERTAIN DETAILS ABOUT COMMISSION PAYMENT,THE AO OR THE FAA HAVE NOT CONSIDERED THE DOCUMENTS FILED BY HIM AND HAVE NOT DECIDED THE ISSUE AS TO W HETHER THE PROVISIONS OF CHAPTER XVII WOULD BE APPLICABLE IN THE CASE UNDER CONSIDERATION OR NOT.I N THESE CIRCUMSTANCES,IN THE INTEREST OF JUSTICE WE ARE RESTORING BACK THE MATTER TO THE FILE OF TH E AO FOR FRESH ADJUDICATION.HE WOULD AFFORD REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE,B EFORE FINALISING THE ISSUE.GROUND NO.5 IS ALLOWED IN FAVOUR OF THE ASSESSEE IN PART. AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. 9+: 9+: 9+: 9+: !*+ !*+ !*+ !*+ ;!! ;!! ;!! ;!! !< !< !< !< - -- - 8+: 8+: 8+: 8+: '=+ '=+ '=+ '=+ - -- - !+ !+ !+ !+ > >> > . ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH ,SEPTEMBER,2014 . #8 #8 #8 #8 - -- - /% ! /% ! /% ! /% ! # # # # !! !! !! !! ? ?? ? @! @! @! @! 12 +A +A +A +A , 201 4 - -- - B BB B SD/- SD/- ( / JOGINDER SINGH) ( !# $ !# $ !# $ !# $ / RAJENDRA) ! ' / JUDICIAL MEMBER # ! # ! # ! # ! ' ' ' ' /ACCOUNTANT MEMBER / MUMBAI, @! /DATE: 12.09.2014. SK #8 #8 #8 #8 - -- - (+C (+C (+C (+C D#C%+ D#C%+ D#C%+ D#C%+ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / !&' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT(A)/ E F , 4. THE CONCERNED CIT / E F 5. DR A BENCH, ITAT, MUMBAI / CG! (+ , , . . !! . 6. GUARD FILE/ ! 9! )!C+ )!C+ )!C+ )!C+ (+ (+(+ (+ //TRUE COPY// #8!! / BY ORDER, H / ! ! DY./ASST. REGISTRAR , /ITAT, MUMBAI