SUNNY TREXIM PRIVATE LTD.,KOLKATA V. DCIT, CIRCLE - 5(1) , KOLKATA

ITA 645/KOL/2024

AI Insights

Sunny Trexim Pvt. Ltd. appealed against the order of the CIT(A) which had confirmed the AO's decision adding Rs. 5,62,07,050 to the assessee's income for the Assessment Year 2017-18. This addition was due to the non-submission of TRCs for brokerage payments made to 39 parties, which the AO initially overlooked but later included following a revision under Section 263 of the Income Tax Act. The Tribunal found that the assessee had submitted various documents including audited financial statements and declarations from the parties regarding their non-permanent establishment in India, which needed further verification by the AO.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314683 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; TDS; Assessment record; Revision of order
• Section: 143(3); 142(1); 263; 115JB

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “ए’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय एवं Įी राक ेश ͧमĮ, लेखा सटèय क े सम¢ [Before Shri Pradip Kumar Choubey, Judicial Member &Shri Rakesh Mishra, Accountant Member] I.T.A. No. 645/Kol/2024 Assessment Year: 2017-18 Sunny Trexim Pvt. Ltd. (PAN: AADCS 6026 Q) Vs. ACIT, Circle-5(1), Kolkata Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 22.04.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 07.05.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Shri Sunil Surana, FCA For the revenue / राजèव कȧ ओर से Shri B Debbarma, JCIT, Sr. DR ORDER / आदेश Per Pradip Kumar Choubey, JM: This is the appeal preferred by the assessee against the order of Commissioner of Income Tax(Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)] dated 15.03.2024 for AY 2017-18. 2 I.T.A. No. 645/Kol/2024 Assessment Year: 2017-18 Sunny Trexim Pvt. Ltd. 2. Brief facts of the case of the assessee are that the assessee company filed its return of income declaring total income of Rs. 1,27,56,100/- under normal provision of the Act and book profit of Rs. 85,10,907/- under the provision of Section 115JB of the Act. The case of the assessee was selected for scrutiny determining the total income of the assessee at Rs. 1,27,83,135/-. Subsequently on perusal of the assessment records, it has been noticed that the assessee company has paid brokerage to the tune of Rs. 5,62,07,050/- as reflected in its profit and loss account as part of note- 22, other expenses clause 34a of the Tax Audit Report revealed that no TDS was made thereon u/s 195 of the Act and this point was missed in the original assessment order, accordingly a proposal for initiating revision proceedings u/s 263 of the Act was sent and Ld. PCIT, Kolkata by virtue of order u/s 263 set aside the assessment order for the limited purpose on the aforesaid issues. In pursuance to the aforementioned direction notice u/s 142(1) was issued to the company. The AO after going over the response submitted by the assessee find that the assessee company did not submit tax residency certification any of the 39 parties, as a result of which, the AO added to the tune of Rs. 5,62,07,050/- in the total assessed income of the assessee. 3. Aggrieved by the said assessment order, an appeal has been preferred before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed. Being aggrieved and dissatisfied the assessee preferred an appeal before us. 4. The Ld. A.R instead of arguing into the merit of the case has only prayed that the assessee has to give an opportunity to place all those facts required by the AO with a direction to AO to verify the same. The Ld. Counsel filed audited financial statement, list of parties to whom brokerage paid in USD, declaration by parties of not having any PE in India along with their TRC, sample invoice and documents for paying brokerage in USD. 5. Contrary to that, the Ld. D.R supports the impugned order. 3 I.T.A. No. 645/Kol/2024 Assessment Year: 2017-18 Sunny Trexim Pvt. Ltd. 6. Upon hearing the submission of the counsel of the respective parties, we have perused the order of AO and find that the AO has disallowed the tune of Rs. 5,62,07,050/- u/s 40a(i) of the Act read with Section 194 of the Act, when the assessee did not submit tax residency certificate. The Ld. CIT(A) has also held in its impugned order that the assessee has not given any clear answer to the vital question of residency chargeability status of the brokerage income those agents so earned from the assessee company. Before us, the Ld. A.R has submitted following documents: i) Audited Financial Statement for the Financial year 2016-17. ii) List of parties to whom brokerage paid in USD iii) Declaration by parties of not having any PE in India along with their TRC. iv) Sample invoice and documents for paying brokerage in USD v) a) Assessment order u/s 143(3) for AY 2010-11 b) Audited Financial Statement for the Financial Year 2009-10 vi) a) Assessment order u/s 143(3) for AY 2012-13 b) Audited Financial Year 20111-12 vii) a) copy of notice u/s 142(1) for AY 2022-23 b) Copy of assessment order u/s 143(3) for the AY 2022-23 c) Details of commission with Audited Financial Statement for the Financial Year 2021- 21. 7. The prayer of the assessee is that the assessee has to be afforded an opportunity to place all the documents in response to the quarries before the AO . Keeping in view, the submission made by the assessee and for the interest of justice, we are inclined to afford an opportunity to the assessee to place its case before the AO. The AO is directed 4 I.T.A. No. 645/Kol/2024 Assessment Year: 2017-18 Sunny Trexim Pvt. Ltd. to pass a afresh order after proper verification and going over the documents filed by the assessee. Accordingly, the order passed by the AO confirmed by the Ld. CIT(A) is hereby set aside and the case is remitted back to the file of AO. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order is pronounced in the open court on 7th May, 2025 Sd/- Sd/- (Rakesh Mishra /राक ेश ͧमĮ) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 7th May, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Sunny Trexim Pvt. Ltd., C/o, Shri Jitendra Kaushik, Advocate, 19D, Muktaram Babu Street, Kolkata-700007 2. Respondent – ACIT, Circle-5(1), Kolkata 3. Ld. CIT(A)-NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "