United Traders Company, Kolkata V. Tax Recovery Officer-36, Kolkata, Kolkata

MA 5/KOL/2015

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5427 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 14-10-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 02-02-2015
• Court: TRIBUNAL
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI N. V. VASUDEVAN, JM & SHRI M. BALAGAN ESH, AM] M.A. NO.05/KOL/2015 IN I.T.A NO.1233/KOL/2010 ASSESSMENT YEAR: 2006-07 M/S. UNITED TRADERS CO. VS. TAX RECOVERY OFFICE R,-36, KOLKATA (PAN: ADUPG5810F) ( APPLICANT ) ( RESPONDENT ) DATE OF HEARING: 09.12.2016 DATE OF PRONOUNCEMENT: 08.03.2017 FOR THE APPLICANT: SHRI SURAJIT SAMANTA, AR FOR THE RESPONDENT: SHRI SALLONG YADEN, ADDL. CI T, SR. DR ORDER PER SHRI M. BALAGANESH, AM BY VIRTUE OF THIS MISCELLANEOUS APPLICATION, THE AS SESSEE IS SEEKING TO RECALL THE ORDER PASSED BY THIS TRIBUNAL IN ITA NO. 1233/KOL/2 010 FOR ASST YEAR 2006-07 DATED 12.10.2012 IN AS MUCH AS THIS TRIBUNAL HAD CONFIRME D THE DISALLOWANCE OF COMMISSION PAID BY THE ASSESSEE TO THE TUNE OF RS 23,13,678/- . TH E ASSESSEE HAD ALSO PREFERRED A MISCELLANEOUS APPLICATION BEFORE THIS TRIBUNAL FOR RECTIFYING THE SAID ISSUE AND THE SAME WAS DISMISSED VIDE ORDER PASSED IN MA NO. 05/KOL/20 13 DATED 2.8.2013. AGAIN THE ASSESSEE HAD PREFERRED ANOTHER APPLICATION TO RECTI FY THE SAME ISSUE. 2. THE LD AR ARGUED THAT THE LD AO HAD CONFIRMED T HAT 17 OUT OF 21 IMPORTERS / EXPORTERS HAD RESPONDED TO THE NOTICES U/S 133(6) O F THE ACT ISSUED BY THE LD AO. IN SUPPORT OF HIS ARGUMENT HE PLACED RELIANCE ON PARA 5.2 OF THE ASSESSMENT ORDER. HE ALSO STATED THAT THE RECIPIENTS OF COMMISSION HAD DULY O FFERED THE COMMISSION INCOME IN THEIR RETURNS AND ACCORDINGLY DISALLOWANCE OF COMMISSION EXPENDITURE IN THE HANDS OF THE COMPANY WOULD ONLY RESULT IN DOUBLE TAXATION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE ASSESSEE HAD PREFERRED MISCELLANEOUS APPLICATION FOR THE SECOND TIME BEFOR E US FOR THE SAID ISSUE. WE FIND THAT THE LD AO IN PARA 5.2 OF HIS ORDER HAD STATED THAT THOSE IMPORTERS / EXPORTERS HAVE INFORMED THAT THEY HAVE DEALT WITH THE ASSESSEE IN EARLIER Y EAR ALSO AND THIS WAS NOT THE FIRST YEAR OF 2 M A NO.05/K/2015 M/S. UNITED TRADERS CO.AY 2006-07 THEIR DEALING WITH THE ASSESSEE. ADMITTEDLY, THE C OMMISSION WAS PAID BY THE ASSESSEE FOR INTRODUCTION OF CLIENT. ACCORDINGLY, THE LD AO CON CLUDED THAT THE QUESTION OF INTRODUCTION OF CLIENT DOES NOT ARISE IN THE INSTANT CASE. THE LD AO HAD REPRODUCED THE REPLIES GIVEN BY EACH OF THE PARTY IN THE ASSESSMENT ORDER ITSELF. BASED ON THESE REPLIES AND FURTHER VERIFICATION OF SOME MORE PARTIES, THE LD AO HAD CO NCLUDED THAT THE ASSESSEE FIRM WAS NOT ABLE TO ESTABLISH AND PROVE THAT COMMISSION WAS PAI D TO ALLEGED INDIVIDUAL COMMISSION AGENTS FOR SERVICES RENDERED BY THEM. HE FURTHER HELD THAT THE PAYMENTS WERE MERELY A BOOK ENTRY AND WAS A COLORABLE TRANSACTION TO LOWER THE TAXABLE INCOME OF THE ASSESSEE FIRM. ON FURTHER APPEAL, THE LD CITA CONCLUDED TH AT THE LD AO HAD RIGHTLY HELD THAT THE COMMISSION AGENTS HAVE NOT RENDERED ANY SERVICES TO THE ASSESSEE FIRM WARRANTING PAYMENT OF COMMISSION. WE FIND THE CATEGORICAL FIN DING OF THIS TRIBUNAL IN THE ORIGINAL ROUND OF APPEAL IS ON THE SAME LINES. THE RELEVANT OPERATIVE PORTION OF THE ORDER OF THIS TRIBUNAL DATED 12.10.2012 IS REPRODUCED HEREUNDER:- 10. LEARNED COUNSEL WAS SPECIFICALLY ASKED WHETHER HE IS IN A POSITION TO PRODUCE, OR HAS PRODUCED AT ANY STAGE, EVIDENCES FOR SERVICE S HAVING BEEN RENDERED BY THE PERSONS, WHO HAVE BEEN PAID THE COMMISSION. WHILE LEARNED COUNSEL REFERRED TO THE FACT THAT THESE INCOMES ARE DULY DISCLOSED IN T HE HANDS OF THE RECIPIENT THAT THE SAME COMMISSION WAS ALLOWED DEDUCTION IN THE OTHER YEARS, HE WAS NOT IN A POSITION TO PRODUCE ANY EVIDENCE FOR SERVICES RENDE RED, NOR SUCH EVIDENCE WAS PRODUCED BEFORE THE AUTHORITIES BELOW. IN OUR CONS IDERED VIEW, ONE OF THE FUNDAMENTAL REQUIREMENTS FOR ALLOWING DEDUCTION IN RESPECT OF COMMISSION PAYMENT IS THAT THERE SHOULD BE EVIDENCE FOR SOME S ERVICES HAVING BEEN RENDERED. THE SERVICES HAVING BEEN RENDERED CANNOT BE SIMPLY ASSUMED OR INFERRED. IN THE ABSENCE OF SUCH EVIDENCE, NO INTERFERENCE IS CALLED FOR IN THIS DISALLOWANCE. WE, THEREFORE, CONFIRM THE SAME. WE FIND THAT THE ONUS OF SERVICES HAVING RENDERED I S ON THE ASSESSEE SO AS TO JUSTIFY THE CLAIM OF COMMISSION EXPENDITURE. WHEN THIS ONUS I S NOT DISCHARGED, FOR THIS REASON ALONE, THE CLAIM IS NOT SUSTAINABLE. WE FIND THAT THIS TRIBUNAL HAD ALREADY DISPOSED OFF THE FIRST MISCELLANEOUS APPLICATION VIDE MA NO. 05/KOL/ 2013 DATED 2.8.2013 STATING THAT NO MISTAKE APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE ACT WARRANTING ANY RECTIFICATION WAS BROUGHT OUT BY THE ASSESSEE. THE LD AR WAS NOT ABLE TO PRODUCE ANY EVIDENCE EVEN AT THIS STAGE TO PROVE THE FACTUM OF RENDERING OF SERVICES BY THOSE COMMISSION AGENTS. IN ANY CASE, WE FIND THAT THE L D AR WAS NOT ABLE TO BRING ANY MISTAKE IN THE OLD ORDER OF THIS TRIBUNAL THAT REQUIRES TO BE RECTIFIED WITHIN THE MEANING OF SECTION 3 M A NO.05/K/2015 M/S. UNITED TRADERS CO.AY 2006-07 254(2) OF THE ACT. HENCE, WE DO NOT DEEM THIS AS A FIT CASE WARRANTING ANY RECTIFICATION TO BE MADE IN TERMS OF SECTION 254(2) OF THE ACT AND A CCORDINGLY HAVE NO HESITATION IN DISMISSING THIS MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE. 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 08.03.2017 SD/- SD/- (N. V. VASUDEVAN) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 8 TH MARCH, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. UNITED TRADERS CO., 20, NETAJI SUB HAS ROAD, 1 ST FLOOR, BLOCK A, KOLKATA-700 001.. 2 RESPONDENT TAX RECOVERY OFFICER-36, KOLKATA. 3. THE CIT(A), KOLKATA 4. 5. CIT, KOLKATA. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .