Kerala High Court
The Commissioner Of Income Tax vs Sri.E.S.Jose on 30 September, 2003
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR
&
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
TUESDAY, THE 22ND DAY OF OCTOBER 2013/30TH ASWINA, 1935
ITA.No. 232 of 2009 ( )
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AGAINST THE ORDER/JUDGMENT IN ITA 126/2000 of I.T.A.TRIBUNAL,COCHIN
BENCH DATED 30-09-2003
APPELLANT:
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THE COMMISSIONER OF INCOME TAX,
COCHIN.
BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX
RESPONDENT:
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SRI.E.S.JOSE,PROP.A2Z TILES & FLOORINGS,
P.T.USHA ROAD, COCHIN - 682 011.
THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 22-10-
2013, ALONG WITH ITA. 486/2009, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
APPENDIX TO I.T.A.NO.232 OF 2009
APPELLANT'S EXHIBITS:
ANNEXURE A: COPY OF THE ASSESSMNET ORDER U/S.143(3) DTD.22/3/1999
ISSUED BY THE ASSESSING OFFICER.
ANNEXURE B: COPY OF THE ORDER DATED 15/12/1999 OF THE COMMISSIONER
OF INCOME TAX (APPEALS).
ANNEXURE C: CERTIFIED COPY OF THE ORDER DTD. 30/09/2003 OF THE INCOME
TAX APPELLATE TRIBUNAL, COCHIN BENCH IN ITA
NO.126/COCH/2000.
RESPONDENT'S EXHIBITS:
NIL
// True Copy// PA toJudge
MANJULA CHELLUR, CJ
& A.M.SHAFFIQUE, J.
* * * * * * * * * * * * *
I.T.A.Nos.232 of 2009
and 486 of 2009
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Dated this the 22nd day of October 2013
J U D G M E N T
SHAFFIQUE,J I.T.A.No.232/2009 is filed against the order passed by the Income Tax Appellate Tribunal in I.T.A.No.126/Coch/2000. The order is with respect to the assessment year 1996-1997.
2. The issue involved was with reference to the disallowance of commission paid to various agents for the purpose of business. The assessee debited a sum of Rs.10,45,066/- towards commission and discount, out of which the discount was Rs.2,12,994/-. The balance amount of Rs.8,32,072/- was treated as commission which works out to 2.75% of the total sales turn over. As per the Assessing Officer, the vouchers produced did not contain the signature or complete address of the recipients of the commission. I.T.A.Nos.232 & 486 of 2009 2 The Assessing Officer restricted the commission at 1% of the total sales turn over at Rs.3,02,389/- and the balance of Rs.5,29,683/- is disallowed. The petitioner preferred an appeal before the CIT (Appeals) who by order dated 07/09/1998 allowed the claim of the assessee at 2.5% and disallowed the balance. The Revenue preferred an appeal before the Tribunal and the Tribunal concurred with the view expressed by the CIT (Appeals).
3. In I.T.A.No.486 of 2009 also, the issue involved is similar. That was also a case in which, for the assessment year 2001-2002, the Assessing Officer restricted the commission at 1% of the sales transaction. The CIT (Appeals) enhanced the same to 2.5% against which the revenue filed appeal before the Tribunal. The Tribunal based on the assessee's own case for the earlier two years i.e. 1995-96 and 1996-97 had allowed sales commission at the rate of 2.5% of the total sales turn over in the place of 1%.
I.T.A.Nos.232 & 486 of 2009 3
4. The short question to be considered in the above appeals is with reference to the disallowance of commission paid. With reference to the assessment year 1995-96, an appeal came to be filed by the Revenue as I.T.A.No.1451/2009. Similar situation had arisen in the said case as well wherein the appellate authorities had increased the commission from 1% to 2.5%. We have found that on facts there was no material to delete the said commission and refix the same at 2.5%. In fact, the Assessing Officer had relied upon the fact that no material was produced to prove the payment of commission and the vouchers produced were unsigned. In the absence of any evidence the Assessing Officer permitted disallowance of 1% as commission. In order to increase the said commission to 2.5%, necessarily some additional materials should have been available with the appellate authorities. In the absence of any material to arrive at such a conclusion, the finding is perverse and not substantiated by any materials I.T.A.Nos.232 & 486 of 2009 4 on record. It is needless to state that a perverse finding without any basis gives rise to a substantial question of law.
Under these circumstances, we are of the view that the appeals are to be allowed setting aside the finding of the CIT (Appeals) and the Appellate Tribunal in respect of the deletion of 2.5% of the turn over as commission and sustaining the order of the Assessing Officer in regard to the same.
(sd/-) (MANJULA CHELLUR, CHIEF JUSTICE) (sd/-) (A.M.SHAFFIQUE, JUDGE) jsr I.T.A.Nos.232 & 486 of 2009 5 I.T.A.Nos.232 & 486 of 2009 6 I.T.A.Nos.232 & 486 of 2009 7