Ravikiran Ceramics Pvt. Ltd., Anand V. DCIT, Central Circle-1, Vadodara

MA 83/AHD/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7659 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-04-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-02-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 10-09-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 254(2); 153

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘C’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE MRS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER MA No. 81/Ahd/2023 (Arising out of ITA No. 396/Ahd/2018) Assessment Year : 2013-14 Mangalya Ceramics, Station Road, Kanjari, Nadiad, Kheda PAN : AANFM 7555 K Vs. The DCIT, Central Circle-1, Vadodara AND MA No. 83/Ahd/2023 (Arising out of ITA No. 397/Ahd/2018) Assessment Year : 2013-14 Ravikiran Ceramics Pvt. Ltd., 32, Yogi Park Society, Near Grid Crossing, Anand-388001, Kheda PAN : AABCR 3750 J Vs. The DCIT, Central Circle-1, Vadodara (Applicant) (Applicant)(Applicant) (Applicant) (Respondent) (Respondent)(Respondent) (Respondent) Assessee by : Shri S.N. Soparkar, Sr. Advocate & Shri Parin S. Shah, AR Revenue by : Shri Ashok Kumar Suthar, Sr DR सुनवाई क琉 तारीख/Date of Hear ing : 0 2.0 2.2 024 घोषणा क琉 तारीख /Da te of Prono un cem e nt: 2 6.0 4.2 024 आदेश आदेशआदेश आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: These applications filed by the assessee seek rectification of mistake in the order of the ITAT which was a consolidated order passed in both the cases in ITA Nos. 396 & 397/Ahd/2018 dated 13.03.2023. Both the applications refer to the identical mistake in the order. It was pointed out that the issue for adjudication before the ITAT was the allowance of commission expenses paid 2 MA Nos. 81 & 83/Ahd/2023 Mangalya Ceramics & Ravikiran Ceramics AY : 2013-14 to various agents which was disallowed by the Assessing Officer for want of evidence to prove rendering of any services by the distributors/agents and confirmed by the ITAT. 2. The mistake in the order of the ITAT, it was pointed out was with respect to the findings in the order to the effect that the various evidences placed by the applicant assessee were not sufficient to prove the genuineness of rendering services as distributors. It was contended that this finding was in disregard of the evidence placed in paper-book which were as under:- (i) Distribution agreement; (ii) Correspondence between parties; (iii) Return of income & Annual accounts 3. The application further points out that the ITAT noted at paragraph No.17 that the assessee had not even filed the statement showing the amounts of sales procured by these parties for the assessee for their respective regions, correlated with the accounts of the assessee, as mentioned in the agreements, which finding it was contended was factually incorrect since details were submitted. The reference to the details submitted in this regard is at paragraph nos.4 to 6 of the application in the case of Ravikiran Ceramics Pvt. Ltd. in MA No. 83/Ahd/2023 as under:- “4. The Applicant most respectfully submits that Hon’ble ITAT observed that on page 9, para 17 that “not even the statement showing the amounts of sales procured by these parties for the assessee for their respective regions, correlated with the accounts of the assessee, as mentioned in the agreements, has been filed". However, these observations are factually incorrect. On P/B page no. 23, 26, 29 & 30 (bill wise sales details from Shree Jyoti Electric Trading Co. for sales made to Crompton Greaves Ltd.& Stanley Switchgear Products) were submitted. Further on P/B Page 133 payment due reminders was sent to Stanley Switchgears Products 5. Similarly for other sales agent namely Parul Traders, on P/B Page no. 54 to 57 of the paper book shows that order was obtained by Parul Traders from M/s Sud-Chemie India Pvt. Ltd. and further intimated to assessee. Further, 3 MA Nos. 81 & 83/Ahd/2023 Mangalya Ceramics & Ravikiran Ceramics AY : 2013-14 P/BPage 148 to 153 shows communication with Hi-Tech Corporation for advance payment, order obtained by Parul Traders and other correspondence. 5. Similarly, for sales agent namely Falguni Traders, on P/B Page70, the details of sales made through agent was placed on record on which they are entitled to commission. Further, P/B Pages 176 to 209 are the correspondence by the Falguni Traders with buyers and on page 180 & 181, the evidence regarding visit by agent i.e Falguni Traders to the premise of Flora Electrical & Metal Industries and rate negotiations.” And, in the case of Mangalya Ceramics in MA No. 81/Ahd/2023 at paragraph No. 4 as under:- “4. The Applicant most respectfully submits that Hon'ble ITAT observed that on page 9, para 17 that "not even the statement showing the amounts of sales procured by these parties for the assessee for their respective regions, correlated with the accounts of the assessee, as mentioned in the agreements, has been filed". However, these observations are factually incorrect. On P/B page no. 41 to 49, the correspondence between applicant and Sud Chemielndia Pvt. Ltd. were placed on records which demonstrate active arrangement from obtaining of order till execution, dispatch, and recovery of outstanding.” 4. It was accordingly pleaded that the findings of the ITAT were factually incorrect, and therefore necessary rectification be made in the order of the ITAT. 5. The ld. Counsel for the assessee reiterated the contentions made in the Miscellaneous Application and drew our attention to the relevant findings of the ITAT which were stated to be incorrect at paragraph No.17 of the order of the ITAT and referred to the documents placed in paper-book at page No.113 onwards. He contended that the findings of the ITAT were based on incorrect premise and he pleaded that, if considered fit, the order be recalled for hearing afresh after proper appreciation of the evidences. 6. The ld. DR, however, opposed the application stating that the ITAT had dealt with all evidences filed by the assessee at paragraph No. 17 of the order and found them to be not sufficient to prove the rendering of any services by 4 MA Nos. 81 & 83/Ahd/2023 Mangalya Ceramics & Ravikiran Ceramics AY : 2013-14 the agents so as to justify the payment of commission expenses to them. The ld. DR contended that what the assessee was now seeking by way of Miscellaneous Application was a review of the order passed by the ITAT which could not be done u/s 254(2) of the Act, which allowed only mistake apparent from record to be rectified. 7. We have heard both the parties and we do not find any merit in both the Miscellaneous Applications filed by the assessee. The mistake in the order of the ITAT pointed out in both the miscellaneous applications is that the finding of the ITAT that the evidences filed by the assessee did not adequately prove and justify the payment of commission to the agents was based on incorrect appreciation of facts and evidences before it. We find that this contention of the assessee is completely misplaced. The assessee contends that the ITAT has not considered the Distribution Agreement, correspondence, the return of income and annual account of the agents which were filed before it as evidence of rendering of services by the agents while arriving at this finding. However, the order of the ITAT reveals at paragraph No.16 that the ITAT considered all these evidences while arriving at the above finding. All these evidences find specific mention in paragraph No.16 of the order where it is stated that after considering the evidences filed by the assessee regarding the rendering of services by the distributors, the issue is being adjudicated considering the scope of work of the agents as derived from the agreement entered into with them. Thus, the agreement with the parties has been considered. Paragraph No.16 notes the copies of the correspondence also to be considered. Therefore, there is no merit in this contention of the assessee that the ITAT’s finding was based on incorrect premise. 8. Even with regards to the contention of the ld. Counsel for the assessee that the finding of the ITAT to the effect that even the statements showing the 5 MA Nos. 81 & 83/Ahd/2023 Mangalya Ceramics & Ravikiran Ceramics AY : 2013-14 amounts of sales procured by these parties for their respective region, correlated with the accounts of the assessee, as mentioned in the agreement was not filed, to be incorrect. We do not find any factual incorrectness in this finding of the ITAT. What the ITAT has held is that while the agreement stated that the parties were to be paid commission at a predetermined rate and the accounts between the assessee and the distributors was to be made up and adjusted every three months as noted in paragraph No.16 of its order, the assessee had filed no such adjustment of accounts between the assessee and the distributors in accordance with the agreements. It is this statement of sales which the ITAT notes the assessee to have not filed as was agreed between the assessee and the distributors. In the Miscellaneous Application, the assessee mentions some ad-hoc details of sales made by these distributors on behalf of the assessee to be filed, but what the ITAT was referring to was the statement of sales as agreed to be prepared by the assessee and the distributors as per the agreement entered into with them. Therefore, this contention of the assessee regarding mistake in the order of the ITAT also merits no consideration. In view of the above we do not find any merit in both the Miscellaneous Applications filed by the assessee, and the same are dismissed. 9. In the result, both the Miscellaneous Applications filed by the assessee are dismissed. Order pronounced in the open Court on 26/04/2024 at Ahmedabad. Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 26/04/2024 bt* 6 MA Nos. 81 & 83/Ahd/2023 Mangalya Ceramics & Ravikiran Ceramics AY : 2013-14 आदेश की े /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. संबंिधत आयकर आय / Concerned CIT 4. आयकर आय ( ) / The CIT(A) 5. िवभ ग य िति िध, आयकर य िधकरण / DR, ITAT, 6. ग फ ई / Guard file. देशानुसार/BY ORDER, True Copy उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad