Income Tax Appellate Tribunal - Ahmedabad
Rmp Bearings Ltd.,, Ahmedabad vs Department Of Income Tax on 16 May, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "A" BENCH
Before: Shri D.K. Tyagi, Judicial Member
and Shri A. K. Garodia, Accountant Member
ITA No. 1798/Ahd/2010
Assessment Year 2005-06
Dy. CIT, Circle-5, M/s RMP Bearings
Ahmedabad Ltd.
(Appellant) Vs PAN:AABCRO266K
(Respondent)
C.O. No. 236/Ahd/2010
(in ITA No. 1798/Ahd/2010)
M/s RMP Bearings Ltd. Dy. CIT, Circle-5,
PAN:AABCRO266K Ahmedabad
(Cross Objector) Vs (Respondent)
Revenue by: Sri Rahul Kr., Sr.D.R.
Assessee by: Sri Vijay Ranjan, A.R.
Date of hearing : 16-05-2013
Date of pronouncement : 14-06-2013
I.T.A No.1798/Ahd/2010 & C.O. No. 236/Adh/2010 A.Y. 2005-06 Page No 2
DCIT vs. M/s RMP Bearings Ltd.
आदे श/ORDER
PER : A.K. GARODIA, ACCOUNTANT MEMBER:-
This appeal is filed by Revenue and the C.O. is filed by the assessee which are directed against the order of Ld. CIT(A)-XI Ahmedabad dated 22- 03-2010 for assessment year 2005-06.
2. Grounds raised by the Revenue are as under:-
"1. The Ld. CIT(A)-XI, Ahmedabad has erred in law and on facts in restricting the disallowance of sales commission payment to Rs. 7,53,633/- as against disallowance of Rs. 35,38,143/- made by the AO.
2. The Ld. Commissioner of Income tax (A)-XI, Ahmedabad has erred in law and on facts in deleting the addition of Rs. 1,69,202/- made u/s. 41(1).
3. On the facts and in the circumstances of the case, the Ld. CIT(A)-XI Ahmedabad ought to have upheld the order of the Assessing Officer.
4. It is therefore prayed that the order of the Ld. CIT(A) -XI, Ahmedabad may be set aside and that of the Assessing Officer be restored."
3. At the very outset, it was submitted by the ld. A.R. of the assessee that grounds raised by Revenue and the grounds raised by assessee are interconnected because out of total disallowance of commission of Rs. 35,38,141/- made by A.O. , Ld. CIT(A) confirmed the disallowance of Rs. I.T.A No.1798/Ahd/2010 & C.O. No. 236/Adh/2010 A.Y. 2005-06 Page No 3 DCIT vs. M/s RMP Bearings Ltd.
7,53,633/- and deleted the balance disallowance. Ld. D.R. of the Revenue supported the assessment order on this issue whereas Ld. A.R. of the assessee supported the order of Ld. CIT(A) with regard to amount of disallowance deleted by the Ld. CIT(A). Regarding part disallowance confirmed by Ld. CIT(A), it was submitted that the same should also be deleted because commission in respect of supply to these parties were also paid in earlier years and the commission was allowed in earlier years.
4. We have considered rival submissions and we find that this entire issue has been decided by Ld. CIT(A) by way of a very cryptic order at para 3.2.1 & 3.2.2 of his order. The same are reproduced below for the sake of ready reference:-
"3.2.1 I find force in the A.R's contentions. A.O. issued letters u/s. 133(6) to 5 parties out of 20 parties. In respect of 3 out of 5 parties referred to above, appellant produced evidence for the services rendered. In view of this, I am of the view that disallowance of the entire commission paid to DBL is not justified.
3.2.2 However, the appellant could not furnish any evidence for services rendered by DBL for sales to the other two concerns viz Trumac Engineering Co. Pvt. Ltd. and Gabriel India Ltd. Assertion of these two parities that they were dealing with the appellant directly coupled with non-furnishing of evidence by the appellant vindicates the A.O.'s action in disallowing commission paid. The sales to these parties are of the aggregate amount of Rs. 1,00,48,449/- and commission thereon at the rate of 7.5 % work out to Rs. 7,53,633/-. Disallowance of said sum is confirmed. The balance disallowance of Rs. 27,84,510/- stands deleted. This ground of appeal is partly allowed."
I.T.A No.1798/Ahd/2010 & C.O. No. 236/Adh/2010 A.Y. 2005-06 Page No 4 DCIT vs. M/s RMP Bearings Ltd.
5. We find that Ld. CIT(A) has taken 32 pages of his order to decide this issue but till page No. 29 of his order, he has simply reproduced the submissions made by the assessee before him and thereafter, he has made some comments on page No. 30-31 on various submissions of the assessee and regarding remand report and thereafter, he has decided the issue in few lines as above without giving clear finding regarding various objections of the A.O. as per assessment order and also regarding various submissions of the assessee before him and before the A.O. We also find that it is noted by ld CIT(A) at para 3.2.1 of his order that the AO has issued letter u/s 133(6) to five parties out of 20 parties and in respect of 3 parties out of these 5 parties, assessee could produce evidence for the services rendered without making any comment about such evidences produced by the assessee for services rendered even in cases of those three parties. When A.O. has issued letters in respect of 5 parties only out of 20 parties, how he can decide the matter about remaining 15 parties. Under this factual position, we are of the considered opinion that this matter should go back to the file of A.O. for fresh decision. The assessee should produce evidences before the A.O. regarding rendering of services by all these 20 parties and the A.O. may make enquiries from such parties as considered necessary by him and thereafter, he should decide the issue afresh by way of speaking and reasoned order after providing adequate opportunity of being heard to the assessee.
I.T.A No.1798/Ahd/2010 & C.O. No. 236/Adh/2010 A.Y. 2005-06 Page No 5 DCIT vs. M/s RMP Bearings Ltd.
6. In the result, the appeal of the revenue and C.O. of the assessee are allowed for statistical purpose.
Order pronounced in open court on the date mentioned hereinabove at caption page Sd/- Sd/-
(D.K. TYAGI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 14/06/2013 ak
आदे श कȧ ूितिलǒप अमेǒषत / Copy of Order Forwarded to:-
1. अपीलाथȸ / Appellant
2. ू×यथȸ / Respondent
3. संबंिधत आयकर आयुƠ / Concerned CIT
4. आयकर आयुƠ- अपील / CIT (A)
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड[ फाइल / Guard file.
By order/आदे श से, उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद