INCOME TAX OFFICER, WARD-10(1), I.P ESTATE vs. GLOBAL REACH EXPERTS PVT. LTD., VILLAGE NAHARPUR
Income Tax Appellate Tribunal, DELHI BENCH ‘B’: NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWALIncome Tax Officer, Ward-10(1), Delhi-110002. Vs. Global Reach Experts Private Limited, Office No.25, Ground Floor, Near Post Office, Village Naharpur, Sector-27, Rohini, Delhi.
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PER MANISH AGARWAL, AM:
This appeal is filed by the Revenue against the order of the Ld.
Commissioner of Income Tax (Appeals), NFAC dated 10.01.2024 in Appeal No. CIT(A), Delhi-4/10910/2016-17 arising out of the order passed u/s 144 of the Income Tax Act, 1961 (the Act, in short) dated
09.12.2016. ITO vs. Global Reach Experts Pvt. Ltd.
Brief facts of the case are that the assessee has filed its return of income on 30.11.2014 declaring total income of Rs.6,09,972/-. The assessment was completed u/s 144 of the Act as the assessee has failed to make compliance before the AO and thus it is held by AO that the commission income of Rs.4,76,13,539/- as appearing in 26As statements was not been disclosed in the financial statement filed by the assessee and, accordingly, the additions for the same was made.
Against this order, the assessee preferred an appeal before the Ld. CIT(A) who vide impugned order has deleted the additions so made.
Aggrieved with the said order, the Revenue is in appeal before the Tribunal by following the grounds of appeal: “1. CIT(A) has ignored the fact that there is no provisions in the Income Tax Act which allows auditor to revise its audit report completely i.e. nature of business given in the audit report.
CIT(A) has ignored that the said receipt is recorded in P&L Account as commission and expense head claim shows that the business of the assessee is manufacturing and not service.
The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing.”
Since, all the grounds of appeal are pertaining to one issue of deletion of addition of Rs.4,76,13,539/-, therefore, they are taken together for consideration before us.
Before us, the ld. Sr. DR submits that the assessee has not participated in the assessment proceedings and the AO after perusing the financial statements observed that assessee has ITO vs. Global Reach Experts Pvt. Ltd.
declared total revenue from operations (sale) at Rs.6,94,83,475/- against which the expenditure of Rs.6,75,95,769/- were claimed towards material consumed. According to ld. DR, no income with respect to the commission as appearing in 26AS statements and at Rs.5,76,13,539/- nor any expenditure related to such income were claimed, though, the assessee had claimed credit of TDS on the said commission. The ld. Sr. DR submits that before the Ld. CIT(A) assessee filed additional evidences wherein a certificate of the auditor was filed stating that the total Revenue of Rs. 6,93,83,475/- was comprising of sales of goods of Rs. 21,86,993/- and sales of service of Rs.4,76,13,539/- however, inadvertently both are shown under single hear of Revenue from operations, therefore, the commission was part of the total revenue disclosed in the P&L Account. The assessee also filed the copy of ledger of sales service, sales of goods etc. before the ld. CIT(A). The ld. Sr. DR submits that in the remand report, the Assessing Officer had seriously objected for the admission of these additional evidences and observed in remand report that all the expenditure claimed in the P&L accounts were with respect to the materials consumed to the extent of Rs.6w,75,95,769/- and thus, it is not clear whether any expenditure was claimed against the sales of service i.e., commission receipt. The ld. Sr. DR submits that the ld. CIT(A) without appreciating these facts had deleted the additions solely based on the certificate issued by the auditor, he thus prayed for the reversal of the order of ld. CIT(A). In the alternate, it is requested by ld. Sr. DR the matter may be sent back to the file of the AO for making necessary verification of the claim of the assessee as ITO vs. Global Reach Experts Pvt. Ltd.
the assessment was completed u/s 144 of the Act and no verification of expenses pertaining to such commission income were appearing in the P&L A/c.
None appeared on behalf of the assessee.
Heard the Ld. Sr. DR and perused the materials available on record. In the instant case, the assessment was completed u/s 144 the directions to examine the issue and pass the assessment order denovo fresh in accordance with the provisions of law. The assesse is also directed to file all the evidence before the AO and also direct to file all the other details in support of the claim made in the P&L Accounts. With these directions, all the grounds of the Revenue are partly allowed for statistical purposes.
In the result, the appeal filed by the Revenue is partly allowed. Order pronounced in the open court on 13.08.2025. (SATBEER SINGH GODARA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:13.08.2025
PK/Ps