Income Tax Appellate Tribunal - Mumbai
Drishti Marine Solutions P. Ltd, Mumbai vs Ito 5(1)(3), Mumbai on 20 March, 2018
आयकर अपील य अ धकरण "डी" यायपीठ मुंबई म।
IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं./I.T.A. No.2803/Mum/2014 ( नधारण वष / Assessment Year: 2009-10) Drishti Marine Solutions Pvt. Ltd. The Income Tax Officer 5 (1)-3, Top Floor, Mehta Mahal, बनाम/ Aayakar Bhavan, Mumbai-400 020 15, Mathew Road, Vs. Opera House, Mumbai-400 004 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AAACL 6405 F (अपीलाथ /Appellant) : ( यथ / Respondent) अपीलाथ क ओर से / Appellant by : Dr. K. Shivam यथ क ओर से/Respondent by : Shri Ram Tiwari सनु वाई क तार ख / : 16.01.2018 Date of Hearing घोषणा क तार ख / : 20.03.2018 Date of Pronouncement आदे श / O R D E R Per Shamim Yahya, A. M.:
This appeal by the assessee is directed against the order of the ld.
Commissioner of Income Tax (Appeals) dated 11.03.2014 and pertains to assessment year 2009-10.
2. The grounds of appeal read as under:
1. The ld. Commissioner of Income Tax (Appeals) erred in disallowing the claim of deduction of interest paid of Rs.30,834/- on PT, VAT and Service Tax.2 ITA No. 28 0 3/ Mu m/ 2 0 14
Drishti Marine Solutions Pvt. Ltd.
2. The ld. Commissioner of Income Tax (Appeals) erred in disallowing the claim of depreciation of Rs.1,01,634/- on motor cars used for the purposes of appellants business.
3. The ld. Commissioner of Income Tax (Appeals) erred in disallowing the claim of deduction of expenditure incurred on account of commission paid to Drishti Adventure Sports Pvt. Ltd., wholly and exclusively for the purposes of business.
3. At the outset, the learned counsel of the assessee submitted that he shall not be pressing ground number one and two. Hence, these grounds are dismissed as not pressed.
Apropos disallowance of commission:
4. Brief facts of the case are that during the course of assessment proceedings the Assessing Officer noticed from the P & L account that the assessee had debited an amount of Rs.53,90,000/- under the head "commission". It was noticed from the ledger copy that the commission had been paid to M/s. Drishti Adventure Sports Pvt. Ltd., a group concern of the assessee. The Assessing Officer asked the assessee to furnish the details of this expense and also to explain as to why the same was incurred. The assessee furnished that commission was paid to M/s, Drishti Adventure Sports on account of technical expertise provided by them and all the concerned suppliers were only known to M/s Drishti Adventure Sports Pvt, Ltd., and it has provided the necessary knowhow for direct deals with the suppliers and charged a commission @ 23% on total sales to M/s. Drishti Special Response Services Pvt. Ltd. On going through the assessee's submission the Assessing Officer noticed that the 3 ITA No. 28 0 3/ Mu m/ 2 0 14 Drishti Marine Solutions Pvt. Ltd.
same was much general in nature. The assessee submitted a detailed submission also. The Assessing Officer was not satisfied with the assessee's submission and the expenses claimed as commission of Rs.53,90,000/- was held to be non-obligatory and not for the purpose of business as the assessee failed to provide any evidences to the contrary. Therefore, Rs.53,90,000/- was disallowed and added to the total income of the assessee by the Assessing Officer.
5. While making the addition, the Assessing Officer held as under:
(i) The assessee has stated vide letter dated 22.08.2011, that commission was paid on account of technical expertise provided by M/s. Drishti Adventure Sports Pvt. Ltd since the suppliers were only known to it. The assessee specified that direct deals were facilitated with the suppliers and therefore has been charged a commission @ 23% on total sales to M/s.Drishti Special Response Services Pvt, Ltd. On perusal of the case records, it is noticed that during the year under review, sales of Rs 2.39 crores out of total sales of Rs 3.51 crores has been made to M/s.Drishti Special Response Services Pvt. Ltd.
The assessee has not clarified the extent of benefit it has received through purchases made through influence of M/s.Drishti Adventure Sports Pvt. Ltd. The assessee has failed to furnish any documentary evidence to prove that preferred rates were received by it from the suppliers who were known only to M/s. Drishti Adventure Sports Pvt. Ltd.
(ii) It was noticed that one of the Director of the assessee, Shri Rajiv Somani, is holding 50% of the shares in M/s.Dnshti Adventure Sports Pvt, Ltd. which has transferred the Contract Bid won from the Goa Govt, totally in favour of M/s.Drishti Special Response Services Pvt. Ltd. Thus, Shri Rajiv Somani was in a commanding position to directly influence the purchase deals especially since he was being paid a huge remuneration of Rs.30 lacs p.a. The assessee has conveniently chosen to ignore this aspect and paid commission for purchases made, that too, on total sales which is based on future three years imaginary profits, thereby leading one to doubt the commercial expediency of a prudent businessman.
(iii) The assessee considered the total projected sales of marine & rescue equipments for lifeguarding work to be about Rs.ll.80 crores. It further considered the maintenance and supply of spares business to be worth Rs 2.65 crores per year for 3 years. Thus, the business turnover of the assessee for 4 ITA No. 28 0 3/ Mu m/ 2 0 14 Drishti Marine Solutions Pvt. Ltd.
achieving lifeguarding work was projected at about Rs 19.75 crores or say about Rs 20 crores during the first 3 years. The payment of Rs 53,90,000 as commission was @ 2.7 %. This stand of the assessee is quite contradictory. The asseessee vide etter dated 22.08.2011 had stated that commission was paid @ 23% on total sales. Now, the assessee says that the commission is a one-time payment @ 2.7% of the total projected sales for three years. The assessee has arrived at a hypothetica sales figure of Rs 20 crores which includes Rs 11.80 crore sales to M/s.Drishti Special Response Services Pvt. Ltd. It is fair to assume that this is based on the Contract bid of Rs 12.71 crores transferred by M/s.Drishti Adventure Sports Pvt. Ltd to M/s.Dnshti Special Response Services Pvt. Ltd. However, no evidence for such assumption was submitted for the balance projected sale of Rs.8.20 cr. The assessee simply stated that the maintenance and supply of spares business was worth Rs 2.65 crores per year for 3 years.
(iv) While on this, it may also be borne in mind that the Contract bid won by M/s.Drishti Adventure Sports Pvt, Ltd was transferred to M/s.Dnshti Special Response Services Pvt. Ltd. The submissions made by the assessee did not specify any benefit or profit margin to be gained by M/s.Dnshti Adventure Sports Pvt, Ltd for transfer of the Bid. Can any prudent businessman transfer his lucrative contract without any monetary gain7 The answer is an emphatic 'No'.
(v) The assessee has stated vide letter dated 0709.2011 that since M/s.Drishti Adventure Sports Pvt. Ltd did not wish to execute the work of providing water safety patrol services at coastal beaches of Goa as per the Bid Contract, a commission of Rs.53 lacs shall be paid to it. It was also stated that as M/s. Drishti Special Response Services Pvt Ltd could not pay the commission, the same would be paid by M/s.Drishti Marine Solutions Pvt Ltd, who would, with the aid of Drishti Adventure Sports Pvt Ltd get preferred rates from the suppliers of Drishti Adventure Sports Pvt Ltd. can be seen from the above, it appears that M/s.Drishti Adventure Sports Pvt. wanted revenue of Rs 53 acs but since M/s.Drishti Special Response Services Pvt. Ltd could not pay the commission of Rs 53 lacs, the assessee was made to pay the commission. If any commission was to be paid, it was M/s.Drishti Special Response Services Pvt. Ltd who should have paid the commission to M/s. Drishti Adventure Sports Pvt. Ltd because it was the direct beneficiary of the Contract bid won & transferred by M/s.Drishti Adventure Sports Pvt. Ltd.
(vii) Why would the assessee pay such a high commission when it did not stand to gain any benefit except the assumed and unsubstantiated preferred purchase rates from suppliers7 The answer lies in the tax records. The assessee has claimed expenses of Rs 53,90,000/- as commission paid even though it was not duty bound to pay for such expenses which should have been borne entirely 5 ITA No. 28 0 3/ Mu m/ 2 0 14 Drishti Marine Solutions Pvt. Ltd.
by M/s.Drishti Special Response direct beneficiary of the Contract Bid transferred by M/s. Drishti ture Sports Pvt. Ltd. The amount of Rs.53,90,000/- has thus escaped taxation. In fact, on going through the records of M/s.Drishti Adventure Sports Pvt. Ltd it is seen that it has huge unabsorbed business losses/ depreciation which shows that it would never pay taxes on the income which are diverted to it. The assessee with the intention of not paying taxes on its income has diverted the same to its sister concern which will get set off against its losses. The expenses have in fact been booked at the fag end of the financial year. Thus, this is nothing but a case of avoiding taxes.
(viii) The assessee has made wrong claim of expense with a view to reduce the tax liability of the year under review and it is for such type of case that the Hon'ble Supreme Court has held in the case of M/s McDowell & Co Ltd (154 ITR 148) as under:
"Tax planning may be legitimate provided it is within the framework of law. Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain a belief that it is honourable to avoid the payment of tax by resorting to dubious methods. It is obligatory of every citizen to pay the taxes honestly without resorting to subterfuges."
After taking into consideration the above elaborate discussion, the expense of Rs.53,90,000/- claimed by the assessee as commission is held to be non-obligatory and not for the purpose of business as the assessee has failed to provide any evidences to the contrary. The amount of Rs.53,90,000/- is therefore disallowed and added to the total income. Penalty proceedings u/s 271(1)© of the I.T.Act 1961 are separately initiated for furnishing of inaccurate particulars of income and concealment of income.
Without prejudice to the above, even if it is accepted that the assessee was liable to pay commission on its sales to M/s.Drishti Special Response Services Pvt. Ltd as stated in assessee's letter dated 22.08.2011, still the complete amount of commission claimed by the assessee cannot be allowed. The quantum of commission was initially stated to be 23% of sales to M/s.Drishti Special Response Services Pvt Ltd but subsequently stated to be revised at 2.7% of the total projected sales of the assessee for the next three years.
In the above scenario, the commission becomes due & payable by the assessee only when sales are made to M/s.Drishti Special Response Services Pvt. Ltd. Since sales amounting to Rs.2,39,54,940/- only have been made to M/s.Drishti Special Response Services Pvt. Ltd during the year under review, the assessee becomes liable to pay commission amounting to only Rs 6,46,783/- i.e 2.7% of Rs.2,39,54,940/-. The balance commission will become payable only when the actual sales are effected to M/s.Drishti Special Response 6 ITA No. 28 0 3/ Mu m/ 2 0 14 Drishti Marine Solutions Pvt. Ltd.
Services Pvt. Ltd in subsequent years. Hence, the balance commission of Rs.47,43,217/- (Rs 53,90,000;- less Rs 6,46,783/-) cannot be allowed as it does not pertain to the year under review and therefore the same is disallowed,
6. Upon the assessee's appeal, the ld. Commissioner of Income Tax (Appeals) considered the admission of additional evidence and also obtained remand report from the assessing officer. In this regard he observed as under:
During the appeal proceedings, it was contented by the appellant that at the assessment stage the appellant could not file some evidence because it was under the impression that the AO will allow the commission expenditure after considering the explanation of the assessee that the same was paid for the purpose of business. Accordingly, the appellant requested for admission of additional evidence in form of work order etc. Vide letter dated 17/10/2012 my predecessor forwarded the submissions and additional evidence to the AO for his objections and comments on the merits of the additional evidence. Vide letter dtd:14/1/2013 the AO has submitted the remand report wherein it is stated that during the assessment proceedings at three occasions reference was made to the commission expenses yet the appellant did not file the evidence which has now been filed during the appeal therefore the same should not be accepted at this stage. On merit of the evidence the AO has submitted that at this stage also the assessee has not furnished any evidence to prove that the equipments were purchased by the from various suppliers through the influence of M/s. Drishti Adventure Sports Pvt. Ltd. to whom commission had been paid. Further, initially it was stated by the assessee that commission has been paid @ 23% on total sales made during the year to M/s. Drishti Special Response Services Pvt. Ltd. and subsequently it was stated that the commission is a one time payment @ 2.7% of the total projected sales for three years. It is also highlighted by A.O. that Shri Rajeev Somani was holding 50% shares in M/s. Drishti Adventure Sports Pvt. Ltd., so he was in a commanding position to influence the purchase deals and if any genuine commission was to be paid it should have been paid by M/s. Drishti Special Response Service Pvt. Ltd. to M/s. Drishti Adventure Sports Pvt. Ltd. because it was the direct beneficiary of the contract bid owned and transferred by M/s. Drishti Adventure Sports Pvt. Ltd. There is no gain to the assessee and it was not duty bound to make such expenses. The amount of commission has escaped taxation in the hands of the recipient M/s. Drishti Adventure Sports Pvt. Ltd. as it has huge unabsorbed business losses/depreciation. On these grounds the AO has inferred in the 7 ITA No. 28 0 3/ Mu m/ 2 0 14 Drishti Marine Solutions Pvt. Ltd.
remand report that a wrong claim of expense was made by the appellant with a view to reduce the tax liability hence the same should be disallowed.
7. The ld. Commissioner of Income Tax (Appeals) upheld the action of the assessing officer by holding as under:
5.4.1. In response to the remand report the appellant has mainly contended that the commission in question was paid for business consideration because the said party has helped the appellant in procuring instruments at preferential rates and the appellant has earned business with the help of the said party to whom commission was paid. After considering the rival submissions, I do not find any force in the contention of the appellant because there is no documentary evidence in support of the claim of the appellant that (i) the said party to whom commission has been paid by the appellant has actually helped the appellant in procuring the instrument at preferential rates (ii) there is no concrete evidence that the appellant's business in any way was enhanced by any assistance provided by the said party to whom commission was paid. On the other hand it is also an undisputed fact that Shri Rajeev Somani is a person who has substantial interest in all the group companies who are involved in the business of water sports, therefore, any transaction in the nature of commission has to be analysed in the light of this fact as well as the fact that the group company to whom huge commission has been paid was a company having accumulated losses. Under these circumstances, the payment of commission to such concern becomes a tool of tax evasion by connivance of group companies in such a way where the company paying commission reduces its tax liability as it gets deduction of this expenses and the company receiving payment does not pay any tax on the receipt of commission. In the instant case, it is also noted that not only there is no direct evidence to show that the appellant has actually been benefitted by any noticeable services provided by the concern to whom commission was paid, there is no clarity even on the basis of calculation of the commission because initially it was claimed as commission on purchases whereas later on the appellant changed its stand to claim that commission was paid on the projected receipts for three years. Normally, commission is paid on predetermined basis and it is restricted to the amounts of transactions which are finalized during the year under consideration. Commission is generally not paid in advance in anticipation of projected sales in subsequent years which have also not materialized in the instant case. After considering all these material facts and circumstances, it appears that the commission has been paid to a closely group concern just with the sole intention of reducing the tax liability.8 ITA No. 28 0 3/ Mu m/ 2 0 14
Drishti Marine Solutions Pvt. Ltd.
Such commission cannot at all be held as a deductible business expenditure. The same has correctly been disallowed by the AO, which is confirmed.
8. Against the above order, the assessee is in appeal before us.
9. We have heard both the counsel and perused the records. The learned counsel of the assessee summarized his propositions as under:
1. Drishti Adventure Sports Pvt Ltd being awarded the Work Order from the Govt. of Goa for providing the water safety and beach lifeguarding services including equipment required for the contemplated work.
2. The Procurement by the Appellant of more than 52 jet skis from Sea Doo resulted the largest private purchase till date in the corporate history of BRP.
3. The Appellant Company being a buyer for such a large quantity and having a distributorship agreement with the manufacturer enabled the Appellant Company to obtain the principal rescue equipment at preferential rates.
4. Without having agreement with Appellant did not agree to pay the commission to Drishti Adventure Sports Pvt Ltd, the Appellant Company would not have been able to enter into a distributorship agreement with BRP as it was Drishti Adventure Sports Pvt Ltd. which was having a relationship (through being a first importer / existing user of BRP products in India) with BRP.
5. The Appellant Company was benefited by the experience of Mr Manoj Agiwal of Drishti Adventure Sports Pvt Ltd who helped the Appellant Company to develop the Surf Rescue Board and the Rescue Tube thereby saving tremendous costs.
6. Appellant's business was increased by assistance provided by the party to whom the commission was paid.
Period Total Turnover and
other income
March 2006 2,42,480
March 2007 19,52,120
March 2008 11,47,810
March 2009 351,95,540
March 2010 425,13,010
March 2011 343,20,000
9
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Drishti Marine Solutions Pvt. Ltd.
March 2 012 305,40,280
March 2013 319,78,017
March 2014 397,61,104
March 2015 417,23,042
7. The Above chart shows the turnover of the appellant in future years has been increased.
8. The Appellant Company had deducted the TDS on the payment of Commission and same has been deposited to the Governments. Hence there is no any doubt about the payment of such huge commission.
9. The reasonable of expenses has to be judged from businessman's point of view. Revenue cannot sit in the arms chair of business man and hold that expenses are not deductible.
10. If the AO has doubt about the business transactions he could have examined the parties who are parties to the agreement.
11. The Department cannot dictate the circumstances in which expenses is to be incurred. Commercial expediency must be decided from businessman's point of view. CIT vs. Sales Magnesite P. Ltd. (1995) 214 ITR i (Bom.)(HC)(PG.6)(Pg.
No.363-369)(rel pg.s67) Shahzada Nand & Sons v. CIT (1977) 108 ITR 358 (SC) (366)(Pg. No. 370 -
379) For deciding the commercial expediency, contractual obligation is not required. CIT vs. Associated Electrical Agencies (2004) 266 ITR 63 (Mad)(HC)(38o-
387)(rel Pg.386)
12. Goa Lifeguarding Contract:
Work performed by Drishti Special Response Services Pvt Ltd Bid won by Dristiti Drishti Marine Adventure Sports Solutions Pvt Ltd Pvt. Ltd supplied Equipment Goa and provided Mainteannce andSpares Contract > The tender was bid by Drishti Adventure Sports Pvt Ltd and the Work Order was issued to Drishti Adventure Sports Pvt Ltd . (Pg. No. 20).10 ITA No. 28 0 3/ Mu m/ 2 0 14
Drishti Marine Solutions Pvt. Ltd.
> The shareholding of Drishti Adventure Sports Pvt Ltd was held by two groups (a) Rajiv Somani Family and (b) Sunil Shetty group. > The successful bidder vizDrishti Adventure Sports Pvt Ltd informed the Government of Goa that a special purpose company had been incorporated vizDrishti Special Response Services Pvt Ltd which would sign the contract, execute the work, raise the invoices and receive the payments for the work to be performed under the tender.
> The shareholding of Drishti Special Response Services Pvt Ltd is 100 % held by Rajiv Somani and family.
> Drishti Adventure Sports Pvt Ltd consented to allow Drishti Marine Solutions Pvt Ltd. (Appellant) to be appointed the distributor for BRP and other companies as the profit from the sale of equipment to Drishti Special Response Services Pvt Ltd was to be retained in Drishti Marine Solutions Pvt Ltd, (Appellant) > Profit from sale of equipment to Drishti Special Response Services Pvt Ltd would accrue in Drishti Marine Solutions Pvt Ltd. (Appellant) > In lieu of providing consent to being appointed as distributor, Drishti Marine Solutions Pvt Ltd. (Appellant) paid commission to Drishti Adventure Sports Pvt Ltd. The quantum of commission was a percentage of the estimated contract of supply and of providing maintenance and spares in course of the Goa Contract.
10. Per Contra, the learned departmental representative relied upon the order's of authorities below.
11. We have heard both the counsel and perused the records. We find that in the present case the group company of the assessee had won a bid from Goa government for providing water safety and beach lifeguarding services including supply of equipments required for the contemplated work. Thereafter, the said group company M/s. Drishti Special Response Services Pvt Ltd got the contract awarded to the assessee company for execution of the same. The assessee company has paid a commission of Rs.53,90,000/- to the said group company. The assessee's plea is that 11 ITA No. 28 0 3/ Mu m/ 2 0 14 Drishti Marine Solutions Pvt. Ltd.
the works contract involved large purchases and the asseessee company was not equipped to handle this. Therefore, it needed the services of the said group company to execute the contract properly. Hence, it paid the impugned commission. The assessing officer was of the opinion that assessee company was not required to pay that much of commission. For this, the assessing officer referred to the assessee's statement regarding conflicting rates of commission agreed. He opined that commission of Rs.6,46,783/- was only payable. The assessing officer also found that the magnitude of services claimed to have been provided by the group concern has not been established. The assessing officer largely took adverse inference on the ground that the group concern has large unabsorbed losses and by making large payment to the group concern taxes are being sought to be avoided. In this regard, the assessing officer has placed reliance upon the decision of Hon'ble Apex Court in the case of Mcdowell & Co.
12. The ld. Commissioner of Income Tax (Appeals) has also affirmed the assessing officer's order. He has concluded that it appears that the commission has been paid to a closely group concern just with the sole intention of reducing the tax liability. Such commission cannot at all be held as deductible business expenditure. We find that assessee's group company won a bid. Thereafter it got the contract transferred to the assessee company. A sum of Rs.53,90,000/- has been paid by the group company to the assessee company as commission. We find that assessing officer's ground that a 12 ITA No. 28 0 3/ Mu m/ 2 0 14 Drishti Marine Solutions Pvt. Ltd.
lesser amount of commission should have been paid is not at all sustainable, in light of the various decisions including that from Hon'ble Apex Court, which expounded that assessing officer should not sit into the shoes of the businessman and decide what is the necessity for the business. Moreover the fact of the case clearly indicates that the group concern had won the bid. Thereafter, it got the contract transferred in the name of the assessee company. It amounts to outsourcing where the group company is entitled for its margin. In such scenario nothing would have prevented the group concern for from demanding a specified sum as consideration for passing on the contract. This would have certainly qualified also as diversion of income from overriding title. Be as it may, the very fact that the group concern got the contract awarded to the assessee company after winning the bid/lender, the same is a huge service in itself. Thereafter facts of the case clearly indicate that the group concern has provided its expertise in handling the large amount of purchases and other services in this case. The assessing officer has only disputed the quantum of amount paid. In our considered opinion, on the facts of the case, and the case laws referred by the learned counsel of the assessee reproduced here in above, the justification of payment of the sum involved is established.
13. Furthermore, the main plank of the assessing officer as well as the Commissioner of income tax is that asseessee company has indulged in colorable device. It is the plea that the group concern had huge loss and sums have been paid to reduce the tax liability. Here we note that if the group concern had huge losses and it 13 ITA No. 28 0 3/ Mu m/ 2 0 14 Drishti Marine Solutions Pvt. Ltd.
wanted to adjust profits it could have very well executed the contract itself the bid which it had won. Moreover, no case has been made out that the assessee has not actually executed the contract. Or that the contract had actually been executed by the group concern and the accountings of the sums involved are only paperwork. We find that the Company are artificially juridical entities. Even if for argument sake it is taken that some tax planning has been resorted to, there cannot be any adverse inference for that. As tax planning through legitimate means is not prohibited.
14. Even in the case of Mcdowell & Company Ltd. vs. CTO 1986 AIR 649, 1985 SCR (3) 791, the majority decision delivered by Justice Misra Rangnath held that "tax planning may be legitimate provided within the framework of law". The Mcdowell & Company Ltd. (supra) decision on the issue of tax avoidance was again reconsidered by the Hon'ble Supreme Court in the case of Union Of India vs Azadi Bachao Andolan And Anr dated 07.10.2003 in which three member bench categorically restored the right of tax payer to mitigate taxes by all legitimate means. Recently, the Hon'ble Supreme Court has elaborately ruled in the case of Vodafone vide order dated 12.01.2012 that there was no conflict between the Mcdowell & Company Ltd. (supra) and Azadi Bachao Andolan (supra) case and there was no need for reconsidering the Azadi Bachao Andolan (supra) decision by a larger bench. In delivering the judgment, the Hon'ble Supreme Court after reviewing the various judgments of the House of Lords of England, has reiterated that the westmimster principle is the corner-stone of law and every tax payer is entitled to arrange his affair so as to reduce the tax liability. 14 ITA No. 28 0 3/ Mu m/ 2 0 14
Drishti Marine Solutions Pvt. Ltd.
15. In this background, in the present case, we find that the assessee's group concern has won a bid from the Government. After winning the bid, it has gotten the contract transferred under the name of the assessee-company. The assessee company has duly executed the contract with the assistance of the group concerned. In such factual background, sums paid as consideration/commission to the group concern cannot be said to be colorable devise. Hence, we set aside the orders of the authorities below and decide the issue in favour of the assessee.
16. In the result, this appeal by the assessee stands allowed.
Order pronounced in the open court on 20.03.2018
Sd/- Sd/-
(Amarjit Singh) (Shamim Yahya)
या यक सद य / Judicial Member लेखा सद य / Accountant Member
मुंबई Mumbai; दनांक Dated : 20.03.2018
व. न.स./Roshani, Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आयु त(अपील) / The CIT(A)
4. आयकर आयु त / CIT - concerned
5. वभागीय त न ध, आयकर अपील य अ धकरण, मंब
ु ई / DR, ITAT, Mumbai
6. गाड फाईल / Guard File
आदे शानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt. Registrar)
आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai