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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: SHRI WASEEM AHMED
आयकर अपील�य अ�धकरण, राजकोट �यायपीठ, राजकोट । IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER And Ms MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./ (�नधा�रण वष� / Assessment Year 2012-13) बनाम/ Shri Prashant Mansukhlal Mehta, A.CI.T., “Amita”, 1-Bhaktinagar Society, Circle-3(1), Vs. Rajkot. Rajkot. �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : ACLPM4434H (अपीलाथ� /Appellant) (��यथ� / Respondent) अपीलाथ� ओर से / Appellant by : Shri M.J. Ranpura, A.R ��यथ� क� ओर से/Respondent by : Shri Suhas Mistry, Sr. D.R. सुनवाई क� तार�ख / Date of Hearing 27/02/2020 घोषणा क� तार�ख /Date of Pronouncement 28/02/2020 आदेश / O R D E R PER BENCH:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-3, Rajkot [Ld. CIT(A) in short] dated 04/05/2016 arising in the matter of assessment order passed under s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") dated 25/02/2015 relevant to the Assessment Years (A.Y.) 2012-13.
The only issue raised by the assessee is that the learned CIT (A) erred in confirming the disallowance made by the AO for Rs. 2,35,230/- on account of commission expenses.
2 - 3. The facts in brief are that the assessee in the present case is an individual and holding the dealership for two wheeler and its spare parts. The AO during the assessment proceedings found that entry for the TDS was made by the assessee in the books of accounts much before the booking of the commission expenses. The details of such parties stand as under:
DISCREPANCIES IN TDS DEDUCTED Sr.No. Name of the party Commission TDS deducted Amount of TDS paid on on commission deducteed paid 1. Harshadrai Amirchand 22/03/2011 01/03/2012 1,09,980/- 10,998/- Sanghani 2. Jashwantiben P. 22/03/2011 01/03/2012 1,25,250/- 12525/- Mandavia 3.1 Accordingly the AO doubted on the genuineness of the expenses as discussed above. Thus he made the disallowance of the commission expenses amounting to Rs. 2,35,230/- and added to the total income of the assessee.
Aggrieved assessee preferred an appeal to the learned CIT (A) who confirmed the order of the AO by observing as under: 5.2 I have noted that the appellant, in his defense, has merely submitted that the said thing took place due to the mistake of the data entry operator since he maintains his accounts on computers. It is pertinent to mention here that the date on which the commission was paid to both the agents is 22nd March 2012 in both the cases and the date on which the TDS was deducted is again the same in both the cases i.e. 1 st March 2012, which is highly unlikely to be identical in both the particular cases unintentionally or by chance. It seems that the said act has deliberately been done and on being noticed by the AO, the appellant has tried to hide his wrongdoing by quoting it the carelellnes or mistake of the Data Enty Operator while feeding the data in the computer. Moreover, the appellant has not submitted any confirmation letter from either of the agents so as to prove genuineness of such deduction at some extent. The income tax returns of the two gents provide the general details of their gross income during the concered financial year and do not verify the fact and therefore, in no way held in resolving the issue. The early booking of the TDS expenses ultimately remains doubtful and therefore, the appellant has not been able or failed to convince the undersigned of the authenticity of the expenses. In such circumstances, I do not find any logical reason to disagree with the Assessing Officer. The addition is therefore confirmed and this ground of appeal is dismissed.
Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us.
3 - 5. The learned AR before us claimed that the amount of commission expenses was subject to the TDS. As such, the entry in the books of accounts was made by the accountant on a date prior to the commission expenses inadvertently. However such mistake cannot render to hold that the expenses are not genuine.
On the other hand the learned DR vehemently supported the order of the authorities below.
We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that the AO was under the obligation before reaching to the conclusion that the impugned commission expenses are bogus to verify the same from the parties concerned. As such, an accounting entry in the books of accounts cannot be a deciding factor to hold that the expenses are not genuine. In our considered view, the prior booking of the TDS is not conclusive to hold that the corresponding expenditures are bogus. Hence we do not find any merit in the finding of the authorities below. Accordingly we set aside the finding of the learned CIT (A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.