Income Tax Appellate Tribunal - Ahmedabad
Rohit Nandlal Trust, Ahmedabad vs Assessee on 19 September, 2012
आयकर अपीलीय अिधकरण,
अिधकरण, अहमदाबाद Ûयायपीठ 'बी
बी'
बी अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
" B " BENCH, AHMEDABAD
सव[ौी मुकुल कुमार ौावत, Ûयाियक सदःय एवं ौी ए.मोहन अलंकामǔण,लेखा सदःय के सम¢ ।
BEFORE SHRI MUKUL Kr.SHRAWAT, JUDICIAL MEMBER AND SHRI
A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A. No.1108/Ahd/2012
( िनधा[रण वष[ / Assessment Year : 2008-09)
Rohit Nandlal Trust बनाम/ The Asst.CIT
Prop.Modern Tubes Vs. Circle-3
12, 2 n d Floor Ahmedabad-380 015
Shanti Sadan Estate
Mirzapur
Ahmedabad-380 001
ःथायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AABTR 1227 R
(अपीलाथȸ /Appellant) .. (ू×यथȸ / Respondent)
अपीलाथȸ ओर से / Appellant by : Ms.Urvashi Shodhan
ू×यथȸ कȧ ओर से/Respondent by : Shri A.Trikey, Sr.D.R.
सुनवाई कȧ तारȣख /
Date of Hearing : 19/09/2012
घोषणा कȧ तारȣख /Date of Pronouncement : 19.10.12
आदे श / O R D E R
PER SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER :
This is an appeal filed by the Assessee arising from the order of the ld.CIT(A)-6 Ahmedabad passed for A.Y. 2008-09 and the substantive ground is as follows:-
(1) The learned Commissioner of Income Tax (Appeals) 6, Ahmedabad has erred both in law and on facts of the case in framing appellate order u/s.250 of the I.T. Act for A.Y. 2008-09 on 23rd day of April, 2012.
2. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the IT Act dated 01.11.2010 were that the assessee is a Private-Trust and in the business of trading of galvanized pipes, MS pipes, etc. ITA No.1108/Ahd/2012 Rohit Nandlal Trust vs. Asst.CIT Asst.Year - 2008-09 -2- It was noted by the AO that the assessee had paid commission on sales. The commission was paid to H.T.Vora-HUF, Chetna B.Vora and Bimal Enterprises respectively of Rs.1,0,000/-, Rs.1,25,000/- and Rs.2,75,050/-. It was explained that the business is competitive, therefore commission paid to agents for bringing orders and the payment was made through account payee cheques over which TDS was deducted. The commission @ 1% was neither unreasonable nor excessive. However, AO was not convinced and held that the commission was paid to the beneficiaries of the Trust, hence payment made to persons specified u/s.40A(2)(b) was disallowed.
3. Ld.CIT(A) has held that the assessee has failed to discharge the onus of placing on record the rendering of services by those agents. The addition was confirmed.
4. We have heard both the sides. The name, address, PAN and the details of the commission paid along with the TDS detail in respect of all the three parties have been placed on record. The commission was paid @ 1% of the amount of sales. The copies of return of income filed by those parties have also been placed in the compilation. Before us, it was also contested that in A.Y. 2006-07 the assessment was made u/s.143(3) vide an order dated 19.3.2008, wherein the profit as disclosed by assessee was not disturbed on the point of payment of commission and the facts of that year were identical with the facts under consideration. Ld.AR has therefore pleaded that a consistent view on identical facts should have been taken by the Revenue Department. The assessee has furnished the details of the brokerage paid along with the party-wise bills raised. The explanation of the assessee was that the competition in Maharashtra was increasing day-by-day, hence adversely effecting the business, therefore the said three parties were engaged to promote the sales. It was their duty to collect the order as also to follow up the transaction. The assessee has paid the said amount only to increase the sales ITA No.1108/Ahd/2012 Rohit Nandlal Trust vs. Asst.CIT Asst.Year - 2008-09 -3- and to ensure the recovery of payment. Since the expenditure was wholly and exclusively for the purpose of the business, therefore it was argued that the disallowance was not in accordance with law. Case laws relied upon were; in the case of CIT vs. Shree Sajjan Mills Ltd. 112 ITD 135 [ITAT Indore ™], in the case of Aluminium Corporation of India Ltd. vs. CIT 86 ITR 11(SC) and in the case of CIT vs. Indo Saudi Services (Travel) (P) Ltd. 310 ITR 306 (Bom.). Respectfully relying upon these decisions and considering the totality of the facts and circumstances of the case, we hereby hold that the Trust has availed the services of these persons, therefore the commission was legitimately paid on the business brought by them. Resultantly ground raised by the assessee is allowed.
5. In the result, the appeal of the Assessee is allowed.
Sd/- Sd/-
(ए.मोहन अलंकामǔण) (मुकुल कुमार ौावत)
लेखा सदःय Ûयाियक सदःय
( A. MOHAN ALANKAMONY ) ( MUKUL Kr. SHRAWAT )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 19/ 10 /2012
टȣ.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS
आदे श कȧ ूितिलǒप अमेǒषत/Copy
षत of the Order forwarded to :
1. अपीलाथȸ / The Appellant
2. ू×यथȸ / The Respondent
3. संबंिधत आयकर आयुƠ / Concerned CIT
4. आयकर आयुƠ(अपील) / The CIT(A)-6, Ahmedabad
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / Learned Departmental Representative, ITAT, Ahmedabad
6. गाड[ फाईल / Guard file.
आदे शानुसार/ BY ORDER, स×याǒपत ूित //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) उप/ आयकर अपीलीय अिधकरण, अिधकरण, अहमदाबाद / ITAT, Ahmedabad