Mangalya Ceramics, Kanjari V. The DCIT, Kheda Circle, Nadiad

MA 82/AHD/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5348 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-08-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-05-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 10-09-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER M . A. N o. 8 2/ A hd/ 2 0 23 ( in I TA N o. 5 4 6/ A h d /2 02 0) ( A s se ss m e nt Y e a r : 20 14- 15 ) M a ng al ya C e r a mi c s , Sta ti o n R oa d, K a n ja r i , N a dia d, K he d a , G uj a r a t-3 87 32 5 V s .De pu t y C o m mi s s io ne r o f I nc o m e Ta x, K h e da C ir c l e, N a dia d [ P A N N o. A A N F M 7 55 5 K ] (Appellant) .. (Respondent) Appellant by : Shri Parin Shah, A.R. Respondent by: None D a t e of H ea r i ng 10.05.2024 D a t e of P r o no u n ce me nt 05.08.2024 O R D E R PER SIDDHARTHA NAUTIYAL, JM: The assessee has filed the present Miscellaneous Application in which it has been submitted that the order passed by ITAT “C” Bench in the case of Mangalya Ceramics in ITA No. 546/Ahd/2020 has made certain incorrect factual observations, which has rendered the order erroneous in terms of Section 254 of the Act and the same is liable to be rectified. In the present application, the assessee has submitted that the issue involved in the captioned appeal is with respect to disallowance of commission expenses of Rs. 33,92,430/- by treating the same as non-genuine. In the Miscellaneous Application, the assessee has stated that for the impugned year, both the CIT(A) and ITAT have followed the orders for A.Y. 2013-14 and there are no independent findings. In the Miscellaneous Application it was submitted that there are certain evidences which prove the genuineness of services MA No.82/Ahd/2023 (in ITA No. 546/A/20) Mangalya Ceramics vs. DCIT Asst.Year –2014-15 - 2 - rendered by the agent to whom such commission expenses were which were not considered by ITAT in at it’s order for A.Y. 2013-14 and the ITAT erred in relying on this order. 2. We have gone through the contents of the Miscellaneous Application filed by the assessee and we observe that the contents of the Miscellaneous Application filed by the assessee are incorrect and therefore, the present Miscellaneous Application has no legs to stand on. 3. On going through the facts of the case, we observe that the ITAT while passing the order for A.Y. 2013-14, observed that the assessee had claimed certain sales commission expenses and after a detailed analysis, the ITAT came to the conclusion that the assessee has not been able to produce any evidence in relation to distributorship services for which the said commission expenses had been claimed. The assessee had a distributorship agreement with M/s. Sonali Traders, but on analysis of facts, the ITAT while passing the order for A.Y. 2013-14, had observed that the assessee was manufacturer of electric insulator grade porcelain and the items were manufactured solely for consumption by M/s. Sud Chemie India and both the assessee and customer were having a long-standing relationship and therefore, there was no need for the assessee to have a distributor to whom such commission expenses were paid when there was no expansion of client base. Further, the ITAT observed that from the financial statement of M/s. Sonali Traders, it is seen that it is incurring meagre expenses towards staff salary, travel expenses etc. Accordingly, after analysis of facts, the ITAT came to the conclusion that the assessee was not incurring any genuine MA No.82/Ahd/2023 (in ITA No. 546/A/20) Mangalya Ceramics vs. DCIT Asst.Year –2014-15 - 3 - expenses towards sales commission expenses and therefore, the same are liable to be disallowed. 4. Further, while passing the order for impugned year under consideration (A.Y. 2014-15), the Ld. CIT(A) while dismissing the appeal of the assessee had also observed that the assessee was specifically asked to provide details of expenses in relation to each of the services which had been rendered by M/s. Sonali Traders, as per the agreement but the assessee was unable to furnish any evidence towards rendering of services by M/s. Sonali Traders. Therefore, it was after taking into consideration the observations made by the ITAT for immediately preceding A.Y. 2013-14 and also the observations made by Ld. CIT(A), while dismissing the appeal of the assessee on merits wherein the Ld. CIT(A) had specifically observed that the assessee, despite have been provided opportunity of producing evidences towards rendering of services, was not able to produce any evidence in support of such services, that ITAT decided the case on merits. Further, notably, ITAT while passing the order for A.Y. 2013-14 had also specifically noted that the entity to whom such sales commission was paid was “closely related” to the assessee and the assessee was unable to demonstrate any services having been rendered by M/s. Sonali Traders as sales distributors. 5. Therefore, it was in light of these observations that the ITAT while passing the order for A.Y. 2014-15 in ITA No. 546/Ahd/2020 dismissed the appeal of the assessee after taking on record all the facts of the assessee’s case, as highlighted above. Therefore, we find no infirmity in the order of MA No.82/Ahd/2023 (in ITA No. 546/A/20) Mangalya Ceramics vs. DCIT Asst.Year –2014-15 - 4 - ITAT for A.Y. 2014-15 and we are dismissing the present application with a specific remark that there is no basis whatsoever in filing of the present Miscellaneous Application and hence the same is liable to be dismissed. 6. In the result, the Miscellaneous Application filed by the assessee is dismissed. This Order pronounced in Open Court on 05/08/2024 Sd/- Sd/- (NARENDRA P. SINHA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 05/08/2024 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, राजोकट / DR, ITAT, Rajkot 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 31.07.2024 2. Date on which the typed draft is placed before the Dictating Member 31.07.2024 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S 01.08.2024 5. Date on which the fair order is placed before the Dictating Member for pronouncement .08.2024 6. Date on which the fair order comes back to the Sr.P.S./P.S 05.08.2024 7. Date on which the file goes to the Bench Clerk 05.08.2024 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Dispatch of the Order.......................................