Income Tax Appellate Tribunal - Ahmedabad
The Acit, Circle-7, Ahmedabad vs M/S. Kiwifx Solutions,, Ahmedabad on 12 January, 2018
आयकर अपील
य अ धकरण, अहमदाबाद यायपीठ 'Mh
Mh-' अहमदाबाद ।
Mh-
IN THE INCOME TAX APPELLATE TRIBUNAL
" D " BENCH, AHMEDABAD
सव ी एन.के. ब लैया, लेखा सद य एवं महावीर साद, या यक सद य के सम ।
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER And
SHRI MAHAVIR PRASAD, JUDICIAL MEMBER
आयकर अपील सं./I.T.A. No.1536/Ahd/2013
( नधा रण वष / Assessment Year : 2009-10)
ACIT, बनाम/ M/s. Kiwifx Solutions,
Circle - 7, Vs. Off. Survey No.1042/2/1, Nr.
Ahmedabad-380 015 Ashapuri Mata Temple,
Wagheshwar Pole Na Nake,
Chakleshwar Mahadev,
Raipur,
Ahmedabad - 380 001
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AAJFK 0878 R
(अपीलाथ' /Appellant) .. ( (यथ' / Respondent)
अपीलाथ' ओर से /Appellant by : Shri V. K. Singh, Sr. D.R.
(यथ' क* ओर से/Respondent by : Shri S.V. Agrawal, A.R.
ु वाई क* तार.ख /
सन Date of Hearing 08/01/2018
घोषणा क* तार.ख /Date of Pronounce ment 12/01/2018
आदे श / O R D E R
PER MAHAVIR PRASAD, JUDICIAL MEMBER :
This appeal has been filed by the revenue against the order of the Commissioner of Income Tax (Appeals)-XIV, Ahmedabad, vide Appeal No.CIT(A) XIV/Jt. CIT, R-7/277/2011-12 dated 19/03/2013 for the Assessment Year (AY) 2009-10 and following Grounds of appeal has taken by the assessee:
ITA No.1536/Ahd/2013ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10 -2-
i). The learned CIT(A) has erred in law and on facts in deleting the disallowance of commission expenses of Rs.33,91,662/- even though AO through investigation, proved that commission payment was not genuine and Assessee failed to prove that commission agents and provided any service for which commission was paid.
ii). The ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.22,580/- made by invoking provisions of sections 40A(3) of the I.T. Act.
iii).On the facts and circumstances of the case, the ld.CIT(A) ought to have upheld the order of the Assessing Officer.
iv). It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the assessing officer be restored.
2. Briefly stated facts as culled out from the records are that the assessing officer has made an observation in assessment order, which is reproduced as under:
"The assessee firm is an agency providing Forex advisory services. It is noticed that the assessee has debited Rs.33,91,662/- as commission expenses in P&L a/c. Regarding commission expense vide para 11 of notice u/s.142(1) dated 30.06.2011, the assessee was required to file as under:-
"Name and complete postal address of persons to whom commission paid, rate of commission/basis of commission, their copies of accounts, details of services provided by them, details of TDS deducted and paid into the Govt. a/c, proof of payment made. File evidence also ".
The assessee in his written submission dated 10.10.2011 has filed only copy of commission exp. ledger a/c -which is as under:-
Commission Exp.
Ledger Account 1-April-2008 to 31-Mar-2009 Date Particulars Vch Type Vch Debit Credit No 02-06-2008 To PRAN JAIN Journal 15 1,32,500.00 Invoice No.-Jun/24/2008-
09 ITA No.1536/Ahd/2013 ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10 -3- To PRAN JAIN Journal 15 1,20,000.00 Invoice No.-Jun/23/2008- 09 10-06-2008 To AMIT RAJKUMAR Journal 19 25,000.00 Invoice No.-01/2008-09 24-06-2008 To JAIMIN V. SHAH Journal 29 85,000.00 09-07-2008 To PRAN JAIN Journal 37 1,28,700.00 Invoice No.-Jul/31/2008- 09 10-07-2008 To PRAN JAIN Journal 38 1,65,000.00 Invoice No.-Jul/32/2008- 09 12-07-2008 To PRAN JAIN Journal 39 92,400.00 Invoice No.-Jul/33/2008- 09 23-07-2008 To PRAN JAIN Journal 45 1,32,000.00 Invoice No.-Jul/37/2008- 09 24-07-2008 To PRAN JAIN Journal 46 77,500.00 Invoice No.-Jul/38/2008- 09 27-07-2008 To PRAN JAIN Journal 48 1,70,500.00 Invoice No.-Jul/39/2008- 09 11-08-2008 To PRAN JAIN Journal 52 1,55,000.00 Invoice No.-Aug/43/2008- 09 13-08-2008 To NEGA MANAGEMENT Journal 55 96,000.00 SERVICES Invoice No.-NS/AUG/08- 09 17-08-2008 To PRAN JAIN Journal 57 1,32,340.00 Invoice No.-Aug/44/2008- 09 21-08-2008 To AMIT RAJKUMAR Journal 58 50,000.00 Invoice No.-03/2008-09 04-10-2008 To NEGA MANAGEMENT Journal 83 95,000.00 SERVICES Invoice No.-NS/oct/07/08- 09 01-11-2008 To M.R. Somayajulu Journal 99 55,741.00 10-11-2008 To Krishna Associates Journal 107 59,830.00 15-11-2008 To PRAN JAIN Journal 110 62,270.00 24-11-2008 To Krishna Associates Journal 114 1,60,000.00 Invoice No.17 19-12-2008 To Monika Jain Journal 131 4,85,000.00 Invoice No.Dec/13/2008- 09 To M. Lakshmi Journal 132 80,000.00 Invoice No.Jan/23/2008-09 13-01-2009 To M. Lakshmi Journal 151 58,000.00 Invoice No.Jan/29/2008-09 02-02-2009 To Uma Financial Services Journal 163 4,15,000.00 16-02-2009 To M. Lakshmi Journal 167 53,606.00 Invoice No.Feb/38/2008- 09 17-02-2009 To M. Lakshmi Journal 169 2,01,275.00 Invoice No.Jan/32/2008-09 18-02-2008 To Monika Jain Journal 172 1,05,000.00 ITA No.1536/Ahd/2013 ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10 -4- Invoice No.-Feb/15/2008- 09 33,91,662.00 33,91,662.00 Closing Balance 33,91,662.00 33,91,662.00
Thereafter, assessee was required to file remaining details on 10.10.2011. The assessee filed written submission on 14.10.2011 but he did not file required details regarding commission. Therefore, vide note sheet entry dated 14.10.2011, the assessee was required to file details of parties with complete postal address and copies of bills (one for each) on account of which commission paid to the persons (commission agents) in the following format:-
Name Amount reed. Bills Commission paid bills Rate of commission and wise wise relevant to amount address recd.
The assesses was also required to file details which was required as per para 11 of the notice u/s.142(1) dated 30.06.2011.
Thereafter, the assessee submitted vouchers related to commission expenses in the written submission dated 02.10.2011 (by enclosing page-114 to 148). All these vouchers are made part of this order as annexure A (1 to 35). A perusal of these vouchers shows that in these vouchers different parties have mentioned narration as under:-
Krishna Associates, Being value of actual expenditure incurred for providing client services related to international banking (reimbursement of expenses).
Pran Jain, Monika Jain.
Being value of actual expenditure incurred for sourcing of clients towards business development.
M. R. Somayajulu, Amit Rajkumar, Jaymin U Shah.
Being fees raised for expenses incurred towards business development.
M. Lakshmi.ITA No.1536/Ahd/2013
ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10 -5- Being fees raised towards business development, expenditure of Rs.80,000/-.
Uma Financial Services.
Being fees raised for expenses incurred towards business development for the month of Nov-2008, Dec-2008 and Jun-2009. Neha Management Services.
Being value of expenditure incurred for providing client services related to international banking.
It is also noticeable in all these vouchers that it is mentioned in these vouchers that please issue cheque in favour of individual person like B Sreeshkumar, Pran Jain, Monika Jain, M. R. Somayajulu, S. Uma Bharti, M. Lakshmi, Amit Rajkumar, Jaymin V Shah, Neha Saxena.
A perusal of these vouchers also shows that all these vouchers have been made by a particular persons, on a particular computer and not by each of them. Vide note sheet entry dated 20.10.2011, the assessee was required to file as under:-
"The bills regarding commission for actual expenditure done by the persons to whom it has been paid. They have claimed as reimbursement. Please file supporting evidences for the same. "
Thereafter, vide written submission dated 03.11.2011 which was submitted on 11.11.2011, the assessee filed confirmation from 6 parties, mentioned below, to whom commission paid has been shown:- I. Amit Rajkumar II. Neha Management Services III. Pran Jain IV, Monika Jain V. Krishna Associates VI. Uma Financial Services.
The confirmations submitted by the assessee is also made part of this order as annexure 'B'. A perusal of these confirmations shows that the signature of the said persons in the confirmation and signature of ITA No.1536/Ahd/2013 ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10 -6- the same person in voucher are not same. This shows that the person who has given vouchers and the person who has given confirmations are different for each of the above. Since the assessee did not submit supporting evidences as required vide note sheet entry dated 11.11.2011, the assessee was again required to explain as under:-
"Regarding commission paid, it was required to file supporting evidences as the same has been claimed as reimbursement of expenses by the respective persons to whom shown to have paid as commission. Please also explain as to why the same may not be disallowed in absence of evidences/supporting."
The assessee did not file/produce required details in submission dated 16.11.2011. Therefore, assessee was again required to file /produce the same and was also required to produce the commission agents for verification. The assessee in his written submission dated 23.11.2011 has submitted as under:-
"(2) Explanation on narration in bills received from commission agents for commission paid to them:
The commission agents have issued bills to assessee firm for introducing the clients (customers) to the assessee firm and rendering services. In the bills issued by them the narration mentioned is as under:
"Being value of actual expenditure incurred for sourcing of clients towards business development"
Accordingly for above services commission is paid for sourcing the clients. In few bills the narration mentioned is as under:
"Being value of actual expenditure incurred for providing client services related to international banking (Reimbursement of expense)."ITA No.1536/Ahd/2013
ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10 -7- Your good-self has asked to explain what is the meaning of reimbursement of expense. The commission agent procured the clients, provide some services to the clients, and sometimes convince the clients to obtain services of assessee firm i.e. procuring buyers credit facility. For all these work the commission agents charge commission as well as expenses incurred by him. Reimbursement of expense does not mean that assessee firm had incurred expenses on behalf of agent. Because assessee firm is not claiming reimbursement of expenses but it is paying commission inclusive of expenses to the agents which may please note."
The assessee's contention is not acceptable as on the vouchers, it is clearly mentioned that the same are reimbursement of expenses. The assessee has debited these expenses as commission for which it has no evidence nor it has produced the said commission agents in support of its contention.
Therefore, Vide note sheet entry dated 23.11.2011 assessee was again required as under:-
"Vide note sheet entry dated 16.11.2011, it was required to produce commission agents for verification. Please produce them. The basis on which quantum of commission has been given to different commission agent has not been provided so far. Please provide the same i.e. on what basis particular quantum of commission has been given to the particular commission agent. Please file evidences for arriving such quantum also. Adjourned to 23.11.2011 at 11:30 AM. "
In written submission dated 30.11.2011 the assessee has submitted as under;-
"(1) Basis of Commission Paid The commission paid to agents who procured customers who needed buyer's credit. The basis of commission is always decided mutually by assessee firm and commission agent. The commission is paid to the agents at the percentage fixed mutually on commission ITA No.1536/Ahd/2013 ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10 -8- receipt by the firm. The rate of commission is ranging from 11.50% to 55% according to various factors like financial need of customers, time duration in procuring credit facility to customers, facility provide by agents to customers and assessee firm, time within which commission is received by assessee firm, repetition of work from same customer and quantum of commission received by firm etc. The few bills of sales i.e. professional fee received from customers are enclosed herewith."
The details of commission paid has been mentioned as under:-
PRAN JAIN Inv. Amt Comm.% Comm. amts No. 20 760000 50% 132000 77500 170500 22 866410 30% 132340 23 189440 155000 42 129000 62270 7 645922 120000 132500 19 772200 50% 128700 165000 92400 1368210 MONIKA JAIN Inv. Amt Comm.% Comm. amts No. 54 955500 50% 485000 105000 55 257000 590000 S UMABHARATI Inv. Amt Comm.% Comm. amts No. 57 613328 55% 415000 58 145009 415000 M. LAXMI Inv amt Comm.% Comm. amts no.
70 138865 40% 53606 60 143144 30% 58000 ITA No.1536/Ahd/2013 ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10 -9- 62 59582 36 57050 40% 201275 37 122500 38 105840 39 225600 48 324000 15% 80000 49 215000 392881 NEHA MGMT SERVICES Inv Amt Comm.% Comm. amts no.
29 85600 45% 95000 30 126650 15 194300 50% 95000 190000 The assessee produced Shri Amit Rajkumar, "the statement of Shri Amit Rajkumar u/s.131 as cross examination wherein it was stated by him.
(1) I am helping my father's textile business since last 4 months before this, I was studying.
(2) I have completed my studies in 2011.
(3) I have received commission from M/s. Kiwifix Solutions.
On further being asked about the nature of reference Shri Amit Rajkumar stated that (4) I have provided contact details J have given only the mobile no. (5) I have never talked or contacted personally.
Thus, it is clear that actually no service was provided by Shri Amit Rajkumar. Hence, the commission stated to be paid to him is not wholly and exclusively for the purpose of business". This facts also shows that the assessee's contention that commission paid was on account of services as mentioned in para 3.8 is not correct.
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The assessee was again required to explain the basis on which different rate of commission have been arrived as mentioned in written submission dated 30.11.2011 in para 3.9.
The assessee in his written submission dated 02.12.2011 has submitted as under:-
"(1) Basis of fixation of rate of commission paid Your goodself has asked to explain what are the basis on which differential rate of commission ranging from 11.50% to 55% have been paid. The explanation is enclosed herewith at page No.1."
"Basis on which Commission is decided:
(1) Nature of Business the Commission agent has gives us. (2) If he/she provides only the lead and nothing else, the commission would be Minimal.
(3) Alongwith the lead if he/she provides concerned Persons designation and number, commission would be higher than (2). (4) Whether has very strong hold in the company or not. (5) Whether has the ability to get the deal dosed on his/her own, or is just a facilitator.
(6) The size of company, where we get an entry. (7) Amount of business that is expected to generate from the reference or the lead.
(8) The designation at which the commission agent is appointed in the same company or elsewhere.
(9) Fierce competition in our business, i.e. if we don't give him higher commission, the deal will go to our competitor Hence the basis of commission decided is completely verbal, and decided on deal to deal and also no of layers involved in that deal.
E.g. Mr. Pran Jain, Ms. Umabharti and Ms. Monika Jain are very senior people and have very strong hold in the companies through which we get business. Further deals referred by them are always converted. Hence they command a higher commission rate."
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In above submission, the assessee, in para 2, has mentioned that if he/she provides only the lead and nothing else, the commission would be Minimal, This contention of the assessee is also false. As per statement, Shri Amit Rajkumar has provided only telephone number (lead) still commission paid to him is not minimal He has been paid commission @27%, which is more than the minimum commission paid to M, R, Somayajulu, which is 11.5%. This shows that the commission paid has no relation with the services provided. if any, though not proved.
A perusal of percentage of commission mentioned in the chart para 3.9 shows that the commission amount is not @ rate of the commission mentioned in the said chart. This also shows that the commission paid has no relation with the business stated to be achieved through said commission agents.
The basis of commission/services mentioned in submission dated 30.11.2011 (para 3.8) and the basis mentioned in submission dated 02,12.2011(para 3.12) are totally different. This shows that the assessee is making story to prove commission paid for the business purpose.
Regarding personal presence of the commission agents, the assessee has submitted as under:-
"(2) Personal Presence of commission Agents:
Your goodself has asked to produce the commission agents for verification. In this connection please note that except two commission agents all other commission agents are located at Hyderabad city, Andhra Pradesh state and one at Indore city, Madhya Pradesh state. One commission agent located at Ahmedabad, has been produce before your goodself on 30-] 1-2011 for verification.
We have contacted the commission agents located at Hyderabad & Indore and they have informed that, they have already given confirmation, IT details etc., which prove services rendered and the payment received by them. They have stated that, they do not have ITA No.1536/Ahd/2013 ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10
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objection in coming over to Ahmedabad and appear before Hon'ble JCIT, but since they are located at very far place they request Hon'ble JCIT to send letter for their confirmation. We pray your goodself that, payment of commission is genuine, otherwise there cannot be professional receipts of Rs.1,66,13,181/- without payment of commission.
The business of assessee is dependent upon clients, who need finance in Import-Export. The assessee firm do not have knowledge of clients who need the buyer's credit in Import-Export. Mainly through commission agents the clients are introduced to assessee firm for their requirement. Therefore, the receipt of assessee is not be possible without payment of commission.
Your goodself is prayed therefore, to accept commission paid and oblige."
The assessee has shown inability to produced the commission agent as mentioned above which are of out station. But it has not produced another commission agent which is of Ahmedabad itself i.e. Shri Jaimin V Shah. The assessee has not produced supporting evidences of vouchers. It has also not filed any evidences regarding work attended/services provided by the commission agents as a result of which business achieved by the assessee and commission paid to them. This shows that commission paid to the parties was not wholly and exclusively for business purpose as also evident from the statement of Shri Amit Rajkumar.
The assessee in further submissions dated 09.12.2011 and 16.12.2011 has submitted confirmation of Shri Jaimin V Shah & M. Lakshmi respectively. These confirmation are also made part of this order as Annexure 'C'. Signature in these confirmation are also not matching with the signature in vouchers. Apart from this assessee has not been able to file confirmation of Shri M. R. Somayajulu. The confirmation submitted by the assessee proves only that they have received amount as commission. It has no reference that what services were provided by them and the same was received in turn of any ITA No.1536/Ahd/2013 ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10
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serviced provided by them except in the case of Smt. M. Lakshmi. The assessee has not filed any evidences that the commission paid was wholly and exclusively for business purpose. First of all assessee claimed that the commission was reimbursement of expenses for which he could not file supporting evidences. Thereafter, it claimed as commission for which it has not been able to establish that the commission was paid for any services provided by the commission agents nor commission agents in their confirmation have confirmed that they received amount for any services provided by them, the assessee has not been able to produce the commission agents from whom these facts can be verified. This shows that the commission expenses have not been incurred wholly and exclusively for the business purpose.
From the above discussion, it is clear that genuineness of the commission paid/reimbursement of the expenses is not proved beyond the doubt that the same were incurred wholly and exclusively for business purpose. The requirement section 37(1) is that the expenses should have been laid out or expended wholly and exclusively for the purpose of such business. The strength is drawn from the case Jayshree Tea and Industries Ltd. vs. CIT(2005) 272 ITR 193(Cal).
The word 'wholly' here refers to the quantum of expenditure. The word exclusively refers to the motive, objective and purpose of the expenditure and gives jurisdictions to the taxing authorities to examine these matters. As mentioned above the assessee has not been able to prove that the commission was incurred wholly and exclusively for business purpose.
In the instant case neither the recipient of commission were produced, nor assessee was able to justify its logic. One person who was produced could satisfy the genuine of the commission received by him.
It has been held that nexus between expenditure and business is essential which the assessee failed to substantiate CIT Vs Amalgamation Pvt. Ltd.(1997) 226 ITR 188 (SC) CIT Vs Amalgamation Pvt. Ltd.(1997) 108 ITR 895 (Mad) ITA No.1536/Ahd/2013 ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10
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Assesses also failed to substantiate the commercial expendenary Aluminuym Corporation of India Ltd. Vs. CIT(1972) 86 ITR I1-17(SC) Travancore Itanium Product Ltd. Vs. CIT(1966) 60 ITR 277, 282-83 (SC) In CIT vs. Navsari cotton & silk mills (1982) 135 ITR 546 (Guj) it was held that such an expenses should not be unreasonable and out of proportions. In this case assessee failed to substantiate reasonableness and proportion on which it was done. The assessee has paid commission which is from 11.5% up to 55% which is unreasonable.
Looking to the above facts, the commission of Rs.33,91,662/- is hereby disallowed and added back to the income of the assessee."
3. Therefore, assessee preferred first statutory appeal before the ld.CIT(A) but ld. CIT(A) has allowed the commission expenses of Rs.33,91,662/- with following observation:
"I have carefully perused the assessment order and the submissions given by the appellant.
The main thrust of the claim of the appellant is that the provisions of section 40A(3) is not applicable where payment is less than Rs.20,000/- each. I am inclined to accept the submission made by the appellant. The fact remains that the expenses have been incurred otherwise than account payee cheque or demand draft. The main purpose of the provisions of section 40A(3) is to curb the illegitimate expenses which are shown in the garb of cash expenses.
The purpose of introduction Section 40A(3) was to block the loopholes of making cash payments and claiming deductions with a view to frustrate investigation as to the identity of the receipts and the genuineness of the claim provided each such payment is above Rs.20,000/-.ITA No.1536/Ahd/2013
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Therefore, I am in agreement with the submission given by the appellant and the disallowance made is deleted. The ground of appeal is accordingly allowed."
4. We have gone through the relevant record and impugned order. The services have been rendered for appellant's business by the above said commission agents, the appellant has discharged its onus by filing all possible details including confirmations and TDS and successfully established that the genuine expenditure has been expended for the business purposes. On the other hand, the AO could not gather the positive evidence for the department and taken decision based on presumptions and not on the facts on record. It is not the case of AO that the commission has been paid to bogus parties which has come indirectly to the appellant through cash. In absence of any proof AO should not have given such finding. In our considered opinion, ld.CIT(A) has passed detailed and reasoned order. Therefore, we do not incline to interfere in the order passed by the ld. CIT(A).
5. So far as Ground No.2 is concerned that CIT(A) has erred in law and on facts in deleting the addition of Rs.22,580/- made by invoking provision of Section 40A(3) of the I.T. Act. The assessing officer has made an observation in the assessment order, which is reproduced as under:
"Assessee has made an expenses of Rs.22,580/- in cash on 11/02/2009 as evident from details of business promotion expenses. The assessee ITA No.1536/Ahd/2013 ACIT Vs. M/s. Kiwifx Solutions Asst.Year -2009-10
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has filed copy of voucher of Hotel Hillocks, Mount Abu in the name of 4 adults and 2 children. The guest name mention is Mr. Panjabi Monisha. Whether the same is related to business or not is not clear. Since the expenses are made in cash same are disallowed and added back as per section 40A(3) of I.T. Act."
6. Ld. CIT given relief to the appellant with the following observation:
"I have carefully perused the assessment order and the submission given by the appellant. Such expenditure is claimed to have been incurred for business purposes and in view of the facts of the case on record, the submission cannot be brushed aside. The genuineness of expenditure is not in doubt even by AO Payments have been made through cheque and copy of bills is on record. The action of AO would have been correct, had there been no FBT paid. As the amount is subjected to FBT, no further disallowance is tenable. The addition made by the AO is, therefore, directed to be deleted and the ground of appeal is allowed.
3. The third ground of appeal relates to disallowance of Rs.22,580/- u/s.40A(3) of the I.T. Act., 1961 in as much as the payment was made under the circumstances prescribed under Rule 6DD of I.T. Rules.
3.1 The Assessing Officer has made the observation in the assessment order, which is reproduced as under:
"Assessee has made an expenses of Rs.22,580/- in cash on 11/02/2009 as evident from details of business promotion expenses. The assessee has filed copy of voucher of Hotel Hillocks, Mount Abu in the name of 4 adults and 2 children. The guest name mention is Mr. Panjabi Monisha. Whether the same is related to business or not is not clear. Since the expenses are made in cash same are disallowed and added back as per section 40A(3) of I.T. Act."ITA No.1536/Ahd/2013
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3.2 During the course of appellate proceedings, the AR of the appellant has made the written submission and it will be appropriate to reproduce below the relevant part of the submission:
"The AO has disallowed the payment of the ground that the payment was made in cash exceeding Rs.20000/-. The expenses are paid to Hotel Hillock at Mount Abu to accommodate the guests of the firm. AO has not disputed the genuineness of expenses.
It is respectfully submitted that the bill of Rs.22580/- is not single bill but it is total of various bills. Each bill is below Rs.20000/- as under.
(A) Hotel Bill
Date Bill No. Particulars Amount On
page of
Paper
Book
11/02/09 529 Room 17600 198
Charges
(B) Mayur Restaurant
09/02/09 13132 Tea 101 199
11/02/09 13168 Snacks 242 200
11/02/09 13167 Snacks 231 201
10/02/09 13161 Cake 450 202
10/02/09 13159 Snacks 259 203
10/02/09 13151 Lunch 377 204
10/02/09 13144 Lunch 270 205
10/02/09 13143 Breakfast 248 206
10/02/09 26581 Coffee 56 207
08/02/09 14271 Lunch 691 208
08/02/09 13121 Coffee 56 209
08/02/09 13120 Coffee 56 210
09/02/09 13138 Snacks 107 211
09/02/09 13136 Coffee 56 212
09/02/09 13134 Lunch 540 213
(c) Luxury Tax (720 + 520) 1240 198
Total 22580 198
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From the above, your honour can see that each bill is below Rs.20000 of different dates to which provision of section 40A(3) is not applicable. Therefore disallowance made by AO is unlawful & requires to be deleted."
7. We have gone through the relevant record and impugned order. As we can see hotel and restaurant bills, no payment has been made more than 20,000/-. Ld. CIT(A) has given reasoned and detailed order and we find force in the observation of the ld. CIT(A) therefore, we dismiss this ground of appeal.
In the result, appeal filed by the department is dismissed.
This Order pronounced in Open Court on 12/01/2018
Sd/- Sd/-
एन.के. ब लैया महावीर साद
(लेखा सद य) ( या यक सद य)
( N.K. BILLAIYA ) ( MAHAVIR PRASAD )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 12/01/2018
Priti Yadav, Sr.PS
ITA No.1536/Ahd/2013
ACIT Vs. M/s. Kiwifx Solutions
Asst.Year -2009-10
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आदे श क त"ल#प अ$े#षत/Copy of the Order forwarded to :
1. अपीलाथ' / The Appellant
2. (यथ' / The Respondent.
3. संबं6धत आयकर आयु8त / Concerned CIT
4. आयकर आय8
ु त(अपील) / The CIT(A)-6, Ahmedabad.
5. 9वभागीय त न6ध, आयकर अपील.य अ6धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, स(या9पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation 08/01/2018 (dictation-pad 2 pages attached at the end of this appeal-file)
2. Date on which the typed draft is placed before the Dictating Member ...11/01/2018
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......
7. Date on which the file goes to the Bench Clerk.....................
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................