BOMBAY S. MUKHERJI, V. ASST CIT RG 11(2),

MA 615/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9065 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 30-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH, B, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (JM) AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER MA NO: 615/MUM/2011 ARISING OUT OF : 1534/MUM/2009 ASSESSMENT YEAR : 2005-06 SHRI BOBBY S. MUKHERJI B/7, 49 MIG COLONY 32, RAJA BAHADUR MANSION GROUND FLOOR, GANDHI NAGAR BANDRA (E) AMBALAL DOSHI MARG, FORT MUMBAI-400 051. PAN NO.: AAHPM 2304 C ASSTT. COMMISSIONER OF INCOME TAX RANGE 11(2) AAYAKAR BHAVAN MUMBAI. (APPLICANT) VS. (RESPONDENT) APPLICANT BY : SHRI BEHARILAL RESPONDENT BY : SHRI RAJARSHI DWIVEDY DATE OF HEARING : 03.08.2012 DATE OF PRONOUNCEMENT : 31.8.2012 ORDER PER RAJENDRA SINGH (AM). THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE ASSESSEE REQUESTING FOR AMENDMENT OF THE ORDER DATED 30.8.201 1 OF THE TRIBUNAL IN ITA NO.1534/M/2009 FOR THE ASSESSMENT YEAR 2005-06. THE ASSESSEE HAS SOUGHT FOR RECTIFICATION OF THE ORDER ON THE GROUND OF SOME APPARENT MISTAKES RELATING TO THE DECISION OF THE TRIBUNAL ON GROUND NO.3 & 4 RAISED IN THE ASSESSEES APPEAL. MA NO.615/M/11 ARISING OUT OF ITA NO. 1534/M/09 A.Y:05-06 2 2. THE FACTS IN BRIEF RELATING TO GROUND NO.3 AND 4 I N ASSESSEE/S APPEAL ARE THAT THE ASSESSEE HAD CLAIMED DEDUCTION ON ACCO UNT OF COMMISSION OF RS.31,48,083/- AND RS.15,42,800/- ON ACCOUNT OF SNEHAL ROAD SAFETY PRODUCTS PVT. LTD. AND TRUTHFUL LE ASING FINVEST (P) LTD. IN CASE OF SNEHAL ROADWAYS SAFETY PRODUCTS PVT. LTD ., PAYMENT OF ONLY RS.8,36,533/- HAD BEEN MADE DURING THE YEAR AND BALANCE AMOUNT OF RS.23,11,500/- REMAINED OUTSTANDING WHICH SU BSEQUENTLY HAD BEEN OFFERED AS INCOME BY THE ASSESSEE ITSELF IN ASSESSMEN T YEAR 2007-08. IN CASE OF OTHER PARTY, THE PAYMENT REMAINED OUTSTANDING AND WAS PAID MUCH LATER. THE AO HAD GIVEN A FINDING T HAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF ACTUAL SERVI CE RENDERED FOR PAYMENT OF COMMISSION. NOTICE ISSUED TO M/S. TRUTHFUL LEASING FINVEST (P) LTD. HAD BEEN RETURNED UNSERVED AND OTHER PARTY DID NOT REPLY TO THE NOTICE. ON BEING CONFRONTED THE ASSESSEE HAD STATED THAT THE AGENTS HAD BEEN APPOINTED TO CO-ORDINATE VARIOUS ACTIVITIES CONCERNING ASSESSEES BUSINESS WITH SAHARA GROUP AND NATURE O F SERVICE WAS MENTIONED IN THE DEBIT NOTE. THE DEBIT NOT E, HOWEVER, MENTIONED THAT COMMISSION WAS PAYABLE AGAINST WORK OR DER PROCUREMENT FROM SAHARA GROUP. THERE WAS ALSO A SURVEY CONDUCTED IN THIS CASE AND DURING THE COURSE OF SURVEY THE ASSESSEE HAD BE EN ASKED TO GIVE DETAILS OF PROJECTS IN CONNECTION WITH WHICH COMM ISSION WAS PAID. BUT THE ASSESSEE COULD NOT GIVE DETAILS AND ONLY ST ATED THAT THERE MA NO.615/M/11 ARISING OUT OF ITA NO. 1534/M/09 A.Y:05-06 3 WERE VARIOUS PROJECTS SOME OF WHICH MATERIALIZED AND SOM E OF WHICH ARE STILL GOING ON. WHEN SUBSEQUENTLY ASKED TO SPECIFY T HE NAME AND NUMBER OF PROJECTS RELATING TO COMMISSION PAYMENT THE ASSE SSEE STATED THAT IT WAS A SERIOUS MATTER AND WOULD LIKE TO CROSS CHECK BEFORE GIVING ANY ANSWER. IN RESPONSE OF Q.NO.26 IN WH ICH THE ASSESSEE WAS ASKED TO SPECIFY THE SERVICE RENDERED AND NAME O F PROJECT, THE ASSESSEE STATED THAT HE WOULD BE IN A BETTE R POSITION TO ANSWER TO THE QUESTIONS ONLY AFTER MEETING THE CHARTE RED ACCOUNTANT (CA). CONSIDERING THE FACTS AND CIRCUMSTANCES MENTIONED AB OVE THE AO DISALLOWED THE CLAIM WHICH WAS CONFIRMED BY CIT(A). 2.1 THE TRIBUNAL OBSERVED THAT IT WAS SETTLED LEGAL PO SITION THAT FOR ALLOWING CLAIM OF COMMISSION, BURDEN WAS ON THE ASSESSEE TO PROVE THAT THE SERVICES WERE RENDERED FOR PAYMENT OF COMMISSI ON AND MERE EXISTENCE OF AGREEMENT OR PAYMENT BY CHEQUE WAS NOT ENO UGH. IN THIS CASE THE ASSESSEE HAD NOT GIVEN ANY EVIDENCE FOR SERV ICES RENDERED. AS REGARDS THE DETAILS OF SERVICES RENDERED, TH E ASSESSEE AT THE TIME OF SURVEY HAD ONLY STATED THAT HE WOULD BE IN A BETTER POSITION TO ANSWER THE QUESTION ONLY AFTER MEETING THE CA. THE TRIBUNAL OBSERVED THAT THE ASSESSEE BEING OWNER SHOULD HA VE BEEN ABLE TO GIVE NATURE OF SERVICES WHICH HAD NOT BEEN DONE . THE TRIBUNAL ALSO NOTED THAT AT THE TIME OF ASSESSMENT, THE ASSESSEE HAD SUBMITTED THAT THE COMMISSION WAS FOR CO-ORDINATION WITH SAHARA A IRLINES MA NO.615/M/11 ARISING OUT OF ITA NO. 1534/M/09 A.Y:05-06 4 PROJECTS BUT THE DEBIT NOTE SHOWED THAT COMMISSION WAS PA YABLE AGAINST PROCUREMENT OF ORDER THERE BEING THUS APPAREN T CONTRADICTION. FOR THE ENTIRE AMOUNT OF COMMISSION, A SINGLE DEBIT NO TE WAS RAISED ON SINGLE OCCASION. PARTIES WERE EITHER NOT AVAILABLE AT TH E ADDRESS GIVEN OR DID NOT RESPOND TO THE NOTICE. IN CASE OF SNEHAL ROA DWAYS SAFETY PRODUCTS PVT. LTD. THE ASSESSEE ITSELF HAD WRITTEN BACK SUBST ANTIAL AMOUNT OF COMMISSION OF RS.23,11,500/- IN ASSESSMENT YEAR 2007-08. THE TRIBUNAL, THEREFORE, CONFIRMED THE DISALLOWANCE M ADE BY THE AUTHORITIES BEOW. THE ASSESSEE HAD RELIED ON THE DECISION OF THE TRIBUNAL IN CASE OF M/S. MILLINEUM CYBERTECH LTD. IN WH ICH THE TRIBUNAL HAD RESTORED SIMILAR ISSUE TO THE FILE OF AO FOR FRESH D ECISION. THE TRIBUNAL DISTINGUISHED THE CASE ON THE GROUND THAT IN THAT CASE ASSESSEE HAD NAMED THE SPECIFIC PROJECT BEING SAHARA STAR HO TEL OF SAHARA HOSPITALITY. THE TRIBUNAL ALSO POINTED OUT CONT RADICTION IN THE NATURE OF THE SERVICES AS STATED BY THE ASSESSEE AND AS MENT IONED IN THE DEBIT NOTE AND THE FACT THAT THE ASSESSEE HAD NOT GI VEN EVEN THE DETAILS OF NATURE OF SERVICES AT THE TIME OF SURVEY. AG GRIEVED BY THE ORDER OF ITAT, THE ASSESSEE HAS FILED THE MISCELLANEOUS APP LICATION. 3. THE ASSESSEE IN THE MISCELLANEOUS APPLICATION HAS POINTED OUT THAT THE TRIBUNAL HAD WRONGLY MENTIONED THAT IN CASE OF M/S. TRUTHFUL LEASING FINVEST PVT. LTD., PAYMENT HAD BEEN MADE AFTE R THE DATE OF SURVEY, WHEREAS THE FACT WAS THAT THE PAYMENT HAD BEEN MADE PRIOR MA NO.615/M/11 ARISING OUT OF ITA NO. 1534/M/09 A.Y:05-06 5 TO THE DATE OF SURVEY. THE ASSESSEE ALSO MENTIONED THAT THE ASSESSEE IN RESPONSE TO QUES. NO.26 AT THE TIME OF SURVEY HAD ME NTIONED THAT HE WOULD BE IN A BETTER POSITION TO ANSWER THE QUESTIO N REGARDING SPECIFIC SERVICES RENDERED AND NAME OF PROJECTS AFTER CROSS CHE CKING, BUT TRIBUNAL HAD MENTIONED THAT THE ASSESSEE WOULD BE IN A POSITION TO ANSWER THE QUESTION ONLY AFTER MEETING THE CA. THE TR IBUNAL ALSO IGNORED QUES. NO.23 IN WHICH THE ASSESSEE HAD CLEARLY ANSWE RED THAT THE PARTIES WERE RESPONSIBLE FOR PROCURING VARIOUS JOBS T HAT THE ARCHITECTS WORKS ON. THE ASSESSEE HAS FURTHER MENTIONED THA T THE TRIBUNAL WAS NOT CORRECT IN STATING THAT THE ASSESSEE HAD NOT GIVEN NAMES OF THE PROJECTS. IT HAS BEEN POINTED OUT THAT THE ASSESSEE HAD GIVEN NAME OF THE PROJECT AS SAHARA AIRLINES AND THE SC OPE OF WORK MENTIONED WAS CO-ORDINATION BETWEEN BOBBY MUKHERJEE AND SAHARA AIRLINES PROJECTS. THE TRIBUNAL HAD THEREFORE, WRONGLY DISTINGUISHED THE DECISION OF THE TRIBUNAL IN ASSESSMENT YEAR 2004-05 ON TH E GROUND THAT IN THAT YEAR THE SPECIFIC NAME OF THE PROJECT HAD BEEN GIVEN. THE TRIBUNAL HAD ALSO MENTIONED THAT IN ASSESSMENT YEAR 2004 -05 ALSO, THE TRIBUNAL HAD CONFIRMED THE DISALLOWANCE IN RESPECT O F TWO PARTIES BUT IN THOSE CASES THE PROJECT HAD NOT TAKEN OFF. IT HAS, THEREFORE, BEEN REQUESTED TO RECALL THE ORDER AS THERE ARE APPARE NT MISTAKES IN THE ORDER. MA NO.615/M/11 ARISING OUT OF ITA NO. 1534/M/09 A.Y:05-06 6 4. WE HAVE HEARD BOTH PARTIES, PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. WE FIND THAT THE TRIBUNAL HAD DISALLOWED THE CLAIM OF COMMISSION BY WAY OF REASONED ORDER AFTER TAKIN G INTO ACCOUNT THE CUMULATIVE EFFECT OF SEVERAL FACTORS. THE TRIB UNAL OBSERVED THAT FOR ALLOWABILITY OF CLAIM, THE BURDEN WAS ON THE ASSESSEE TO PROVE THAT THE SERVICES WERE RENDERED AND MERE EXISTENCE OF AG REEMENT OR PAYMENT BY CHEQUE WAS NOT ENOUGH. IN THIS CASE THE ASSESSE E HAD NOT PRODUCED ANY EVIDENCE REGARDING RENDERING OF SERV ICES. THE TRIBUNAL ALSO NOTED FROM THE DEBIT NOTE THAT ENTIRE AMOUNT FOR THE YEAR HAD BEEN RAISED ON A SINGLE OCCASION AND PAYMENTS MOSTLY REMAINED OUTSTANDING AT THE END OF THE YEAR. IN CASE OF SNEHAL ROADWAYS SAFETY PRODUCTS (P.) LTD., THE ASSESSEE HIMSELF WROTE BACK A MAJOR PART OF COMMISSION AS INCOME IN THE SUBSEQUENT YEAR. FURTHER THE ASSESSEE DURING ASSESSMENT EXPLAINED THAT AGEN TS HAD BEEN APPOINTED FOR CO-ORDINATING VARIOUS ACTIVITIES WIT H SAHARA GROUP BUT IN THE DEBIT NOTE, HE MENTIONED THE NATURE OF SE RVICE AS ORDER PROCUREMENT. THERE WAS THUS APPARENT CONTRADICTION. THE ASSESSEE AT THE TIME OF SURVEY HAD BEEN SPECIFICALLY ASKED IN QUES.NO .26 TO SPECIFY SERVICES RENDERED AND NAME THE PROJECTS BUT THE ASSESSEE STA TED THAT HE WOULD BE IN A BETTER POSITION TO ANSWER THE QUESTIO N AFTER MEETING THE CA. THE TRIBUNAL OBSERVED THAT THE ASSESSEE BEING OW NER WAS SUPPOSED TO KNOW THE BROAD NATURE OF SERVICE AND PROJECT S AND NOT THE MA NO.615/M/11 ARISING OUT OF ITA NO. 1534/M/09 A.Y:05-06 7 CA WHO ONLY PREPARES ACCOUNTS ON THE BASIS OF INPUTS GIVEN BY THE ASSESSEE. IT MAKES NO DIFFERENCE IF THE WORDS USED WERE I N A BETTER POSITION AFTER MEETING CA BECAUSE EVEN BEFORE MEETING THE CA, THE ASSESSEE IF THE PAYMENT WAS GENUINE WAS SUPPOSED TO KNOW TH E NATURE OF SERVICE BEING RENDERED. THE TRIBUNAL HAD CON SIDERED THE CUMULATIVE EFFECT OF ALL THESE FACTORS AND HELD THAT THE CLAIM OF COMMISSION WAS NOT GENUINE. 4.1 THERE MAY BE A MISTAKE IN STATING THAT IN CASE OF M /S. TRUTHFUL LEASING FINVEST (P) LTD. PAYMENT WAS MADE AFTER SURVEY. BUT THE PAYMENT IS NO CRITERIA PAID EITHER BEFORE OR AFTER SUR VEY TO ALLOW THE CLAIM OF COMMISSION AS MADE QUITE CLEAR IN THE EARLIER P ART OF THE ORDER. THE ASSESSEE HAD ARGUED THAT IN A SIMILAR SITUATI ON IN ASSESSMENT YEAR 2004-05 THE TRIBUNAL HAD RESTORED THE ISSU E TO THE FILE OF AO FOR VERIFICATION OF ACTUAL SERVICES RENDERE D. THE TRIBUNAL OBSERVED THAT IN THAT YEAR THE ASSESSEE HAD GIVEN THE SPE CIFIC NAME OF THE PROJECT. IN THIS YEAR IT HAS MENTIONED THAT THE COM MISSION WAS FOR CO-ORDINATING WITH SAHARA AIRLINE PROJECTS WITHOUT MEN TIONING THE PARTICULAR PROJECT. BUT THIS IS NOT THE ONLY GROUND ON WHICH THE TRIBUNAL DID NOT FOLLOW THE ORDER IN ASSESSMENT YEAR 2004-05. TH E TRIBUNAL NOTED THE DISCREPANCY IN NATURE OF SERVICES GIVEN BY THE ASSESSEE AND SERVICES MENTIONED IN DEBIT NOTE AND ALSO NOTED THAT EV EN IN ASSESSMENT YEAR 2004-05, COMMISSION HAD BEEN DISALLOWED IN RESPECT MA NO.615/M/11 ARISING OUT OF ITA NO. 1534/M/09 A.Y:05-06 8 OF SOME PARTIES. AFTER CONSIDERING THE CUMULATIVE EFFECT OF ALL THE FACTORS, THE TRIBUNAL THIS YEAR DECIDED THAT IT WAS NOT A CASE OF GENUINE CLAIM OF COMMISSION AND ACCORDINGLY IT DECIDED T HAT THERE WAS NO CASE FOR RESTORING THE MATTER TO THE AO. THE TRIBUN AL HAD DECIDED THE ISSUE AFTER CONSIDERING ALL RELEVANT FACTORS AND BY WAY OF A SPEAKING ORDER. THE TRIBUNAL HAS NO POWER TO REVIEW I TS OWN DECISION. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE MISCELLAN EOUS APPLICATION WHICH IS REJECTED. 5. IN THE RESULT, MISCELLANEOUS APPLICATION STANDS REJECTED . ORDER PRONOUNCED IN THE OPEN COURT ON 31.8.2012. SD/- SD/- (DINESH KUMAR AGARWAL) ( RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 31.8.2012. JV. COPY TO: THE APPLICANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.