Income Tax Appellate Tribunal - Ahmedabad
M/S. Madhu Industries Pvt. Ltd., ... vs Ito, Ward-2(1)(4),, Ahmedabad on 14 November, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "SMC" BENCH
Before: Shri Rajpal Yadav, Judicial Member
And Shri Amarjit Singh, Accountant Member
ITA No. 130/Ahd/2018
Assessment Year 2013-14
M/s. Madhu Industries The ITO,
Pvt. Ltd. 39, Phase-II, Ward-2(1)(4),
GIDC, Vatva, Ahmedabad Vs Ahmedabad
PAN: AAFCM2587A (Respondent)
(Appellant)
Revenue by: Shri N.G. Goel, Sr. D.R.
Assessee by: Shri Sunil Talati, A.R.
Date of hearing : 03-10-2019
Date of pronounce ment : 14-11-2019
आदेश /ORDER
PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee's appeal for A.Y. 2013-14, arises from order of the CIT(A)-2, Ahmedabad dated 01-12-2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short "the Act".
2. The assessee has contested in its two grounds of appeal the confirming of disallowance of commission and violation of provision of Rule 37BB of the I.T. Rules. Both the grounds of appeal of the assessee are inter-connected to the issue of disallowance of Rs. 27,79,795/- of foreign commission out of total commission of Rs. 51,47,620/- paid to the non-
I.T.A No. 130/Ahd/2018 A.Y. 2013-14 Page No 2 Madhu Industries Pvt. Ltd. vs. ITO resident agents for export of goods of the assessee. Therefore, for the sake of convenience, these grounds of appeal are adjudicated together.
3. The fact in brief is that assesse has filed return of income on 28th Nov, 2013 declaring total income at Rs. 11,18,516/-. The case was selected for scrutiny by issuing of notice u/s. 143(2) of the act on 4th Sep, 2014. During the course of assessment, the assessing officer noticed that assessee has debited export commission of Rs. 51,47,620/- to the non-resident foreign agents and asked the assessee to furnish the detail of export commission payment with evidences of services rendered by those foreign agents. The assessee has furnished the detail vide letter dated 12th March, 2016 as elaborated at page no. 2 & 3 of the assessing officer's order. The assessing officer was not agreed with the detail furnished by the assessee in respect of commission paid to the third party named Calmonte and held that the assessee has not proved the genuineness of commission payment of Rs. 27,79,795/- out of total commission expenses of Rs. 51,47,620/-, therefore, the commission expenses of Rs. 27,79,795/- was disallowed and added to the total income of the assessee.
4. The assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee stating that assessee has not submitted copy of agreement and other documents to establish genuineness of foreign commission in respect of commission payment to M/s. Calmonte.
5. During the course of appellate proceedings before us, the ld. counsel has contended that all the supporting detail pertaining to the commission I.T.A No. 130/Ahd/2018 A.Y. 2013-14 Page No 3 Madhu Industries Pvt. Ltd. vs. ITO payment i.e. ledger copy of foreign commission paid, copy of confirmation letter, copy of form no. 15CB, copy of sale invoices, form and application for remittances u/s. 195 etc. were filed before the assessing officer and ld. CIT(A) during the course of assessment proceedings and same were not contradicted by the lower authorities. The ld. counsel has also submitted a paper book containing detail and submission filed by the assessee during the course assessment and appellate proceedings before the lower authorities. On the other hand, ld. departmental representative has supported the order of ld. CIT(A).
6. We have heard both the sides and perused the material on record carefully. Out of the export commission of Rs. 51,47,620/- paid to non- resident foreign agents during the year under consideration, the assessing officer has disallowed the commission expenses of Rs. 27,79,795/- on the ground that assessee has failed to furnish the supporting detail and evidences. In this regard, the assessee has demonstrated from the paper book that different detail like ledger, copy of foreign commission, copy of intimation letter of the foreign agent, copy of request letter of the assessee to its bank manager to make foreign payment, copy of form no. 15CB, copy of intimation letter of the bank authority and copy of sale invoices etc. were filed before the lower authorities. Considering above facts and circumstances, we observe that assessing officer has not specifically contradicted the details and evidences filed by the assessee, therefore, we are of the view that it will be appropriate to restore this case to the file of assessing officer for deciding the matter afresh after verification and I.T.A No. 130/Ahd/2018 A.Y. 2013-14 Page No 4 Madhu Industries Pvt. Ltd. vs. ITO examination of the details filed by the assessee. Accordingly, the appeal of the assessee is allowed for statistical purposes.
7. In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 14-11-2019 Sd/- Sd/-
(RAJPAL YADAV) (AMARJIT SINGH)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad : Dated 14/11/2019
आदेश क त ल प अ े षत / Copy of Order Forwarded to:-
1. Assessee
2. Revenue
3. Concerned CIT
4. CIT (A)
5. DR, ITAT, Ahmedabad
6. Guard file.
By order/आदेश से,
उप/सहायक पंजीकार
आयकर अपील य अ धकरण,
अहमदाबाद