Income Tax Appellate Tribunal - Ahmedabad
M/S. Madhu Industries Pvt. Ltd., ... vs The Income Tax Officer, Ward-2(1)(4),, ... on 10 December, 2018
आयकर अपील
य अ धकरण, अहमदाबाद यायपीठ ।
IN THE INCOME TAX APPELLATE TRIBUNAL,
"C" BENCH, AHMEDABAD
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
ITA.No.59/Ahd/2016
नधा रण वष / Asstt. Year: 2012-13
M/s.Madhu Industries P.Ltd. ITO, Ward-2(1)(4)
39, Phase-II, GIDC Vs. Ahmedabad.
Vatva, Ahmedabad.
PAN : AAFCM 2587 A
(Applicant) (Responent)
Assessee by : Shri Sunil H. Talati, AR
Revenue by : Shri Kamlesh Makwana, Sr.DR
सन
ु वाई क तार ख/ Dateof Hearing : 05/12/2018
घोषणा क तार ख / Date of Pronouncement: 10/12/2018
आदे श/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
Assessee is in appeal before the Tribunal against order of ld.CIT(A)-2, Ahmedabad dated 16.11.2015 passed the Asstt.Year 2012-13.
2. Though the assessee has take four grounds of appeal, but its grievance revolves around a single issue viz. the ld.CIT(A) has erred in confirming the disallowance of Rs.65,87,433/- which was claimed by the assessee as export commission paid to non-resident agent.
3. The ld.counsel for the assessee, at the very outset, submitted that the assessee has filed an application under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 for permission to lead additional evidence. He contended that the assessee at the relevant time was engaged in the business ITA No.59/Ahd/2016 2 of manufacturing and processing grey cloths. It has disclosed income from sale of Rs.34,71,23,615/-. The return of income was filed on 22.9.2012 electronically declaring NIL income after setting off of the brought depreciation loss of Rs.7,45,069/-. On scrutiny of the accounts, it revealed to the AO that the assessee has debited export commission of Rs.41,44,457/-. The ld.AO has made a detailed analysis and thereafter disallowed the claim at Rs.65,87,433/-. Appeal to the CIT(A) did not bring any relief to the assessee.
4. Before us, the assessee has filed a paper book running into 305 pages. Out of the above, it has placed documents from page no.76 to 305 for the first time before the Tribunal.
5. With the assistance of the ld.representatives, we have gone through the record carefully. We find that the ld.CIT(A) has confirmed the disallowance because the assessee failed to produce confirmation from the recipients, their identity, services rendered by them by filing copy of any agreement with foreign agents. According to the ld.CIT(A) assessee failed to deduct TDS, therefore, disallowance under section 40(a)(ia) has also been made. The ld.CIT(A) further observed that the assessee failed to comply with provisions of Rule 37BB of I.T.Rules. Thus, basically disallowance has been confirmed on the ground that the assessee has failed to comply basic details in support of his claim. The ld.counsel for the assessee contended that certain documents were not collected by the tax consultant at that point of time by way of evidence. It sought to place on record copy of email sent on 4.4.2011 (page no.77). Thus, there are lot of communications between the assessee and the alleged recipient of commission by way of email, fax etc. On the strength of these documents, it has been contended that the assessee would be able to demonstrate nature of services rendered by foreign agents and why the assessee made payment of commission. Rule 29 of the IT(AT) Rules though ITA No.59/Ahd/2016 3 prohibits parties to the appeal for producing any evidence either oral or documentary, but if the Tribunal requires any documents to be produced to enable it to pass order, then Tribunal may direct parties for production of such evidence. Basically, this is a provision which empowers the Tribunal to take on record any material for substantial cause of justice between parties. Prima facie on the strength of these communications, it reveal that foreign agents have acted on behalf of the assessee. Thus, to some extent nature of services and their identity could be demonstrated. Therefore, in view of natural of justice, we deem it appropriate to take these evidences on record. The evidence could be read only if an opportunity is being given to the AO for rebutting these evidences. Therefore, we deem it appropriate to set aside this issue to the file of the AO for fresh adjudication. The ld.AO shall permit the assessee to file these documents afresh or any other explanation in support of its case. The AO shall decide the issue in accordance with law after providing due opportunity of hearing.
The observation made by us will not impair or injure the case of the Assessing Officer and also will not cause any prejudice to the defence/explanation of the assessee. The issue be decided in accordance with law after taking into consideration fresh evidence. Thus, appeal of the assessee is allowed for statistical purpose.
6. In the result appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Court on 10th December, 2018 at Ahmedabad.
Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 10/12/2018