M/S CANDIDA ENTERPRISE,GUWAHATI vs. JOINT COMMISSIONER OF INCOME TAX, RANGE-2, GUWAHATI

IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI BENCH “E” COURT AT KOLKATA Before Shri S.S.Godara, Judicial Member and Dr. A.L.Saini, Accountant Member ITA No.185 & 266/Gau/2013 Assessment Years :2005-06 & 2006-07

M/s Candida Enterprise V/s. JCIT,Range-2, Kaliram Medhi Road, Aayakar Bhawan, Ranibari, Pan Bazar, G.S. Road, Christian Guwahati-781001 Basti, Guwahati- [PAN No.AADFC 9880 N] 781005 .. अपीलाथ� /Appellant ��यथ�/Respondent

Shri D.K.Biswas, Advocate आवेदक क� ओर से/By Appellant Shri M.C Omi Ningshen, JCIT SR-DR राज�व क� ओर से/By Respondent 11-12-2019 सुनवाई क� तार�ख/Date of Hearing 18-12-2019 घोषणा क� तार�ख/Date of Pronouncement आदेश /O R D E R PER BEMCH:- These two assessee’s appeals for assessment years 2005-06 & 2006- 07 arise against the Commissioner of Income Tax (Appeals)-Guwahati’s separate orders dated 02.01.2013 and 14.02.2013 passed in case No.Guwa- 400/07-08 and Guwa-200/2008-09 involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file(s) perused.

ITA No.185& 266/Gau/2013 Assessment Years: 05-06 & 06-07 M/s Candida Enterprise. Vs. JCIT, Rg-2,Guwa Page 2 the course of assessment as affirmed in the lower appellate proceedings. The CIT(A)’s detailed discussion to this effect reads as under:- “5. The second ground of appeal is against addition of Rs.16,57,539/- to Commission Income account out of Net Credit Balance of Rs.4,298,124/-. The relevant portion of the assessment order is at paragraphs 2.1 to 2.10 of the assessment order (pages 1-5) and to avoid repetition, facts are not being reproduced. During the assessment proceedings, the assessee claimed that the credit balance in the names of Principals represented payment made to assessee by the principals to meet specific expenses for the principals and, therefore, they were not adjusted against commission receivable. The AO rejected the contention by observing that had it been for specific payments, the sum should have remained intact and, therefore, it should have been lying as cash-in-hand or as balance in the bank account; whereas cash and bank balance was only Rs.8,40,989/- (far less than credit balances in the names of the principals). The AO treated the credit balances lying in the account of the principals as assessee’s commission since to the extent of commission due from the respective Principals. The total addition was Rs.16,57,539/-. 5.1 During the appellate proceedings, the appellant submitted that all the expenses for and on behalf of Principal were paid timely and no scarcity of fund was ever faced and hence no adverse view should be taken on the basis that advances received from principals were not kept as cash / bank balances. 5.2 I find the addition made by the Assessing Officer to be quite reasonable. It is not disputed that commission was due to the appellant. It is not disputed that money was received by the appellant and there is no evidence to prove that money received was only towards advances for expenses. There is no dispute that amount represented by credit balances were not fully kept in the form of cash / bank balance. There is no dispute that appellant maintains cash system of accounting. Under these circumstances; and when the amount of addition made by AO represented both commission due and money actually received; the addition is sustained. The second ground of appeal is dismissed.” 3. Both the learned counsel vehemently reiterated their respective stands against and in support of the impugned commission amount. The fact however remains that neither the assessee has been able to prove each and every commission received or receivable nor the Assessing Officer and the CIT(A) have asked it to provide for list of prayer for necessary factual verification. We therefore deem it appropriate in these peculiar facts that a lump sum addition of ₹1,57,539/- on estimation basis would meet the larger interest of justice.

ITA No.185& 266/Gau/2013 Assessment Years: 05-06 & 06-07 M/s Candida Enterprise. Vs. JCIT, Rg-2,Guwa Page 3 Consequential necessary computation shall follow as per law. The assessee gets part relief to the above limited extent.