COMMISSIONER OF INCOME TAX vs. NANDITA SHUNIK

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ITA - 1715 / 2010HC Delhi09 November 20101 pages
For Petitioner: PL BANSAL
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the sole endeavor of the learned counsel for the appellant (Revenue) was to demonstrate that the findings of the CIT(A) and ITAT were perverse. To appreciate this contention, the Court requested copies of the statements of specific individuals: Sh. Dinesh Kumar @ Danish Kumar, Sh. Lal Babu Mandal, Sh. Parshu Ram, Sh. Ram Babu Singh, and Smt. Sheetal. The Court did not decide the appeal on merits but adjourned the hearing for the production of these documents. Therefore, no finding was reached on the perversity of the lower authorities' orders, and the operative directions are to list the matter for further hearing after production of the requested documents.

What were the facts?

The Assessing Officer (AO) disallowed an expenditure of ₹60,45,890 claimed by the assessee as commission. The AO's disallowance was based on the non-production of commission recipients and statements from a few produced individuals who claimed they were employed earlier but performed no job work for the assessee in the relevant Assessment Year. The Commissioner of Income Tax (Appeals) [CIT(A)] overturned the AO's finding, concluding from the same statements that the payments were genuine for job work done by individuals from a lower income segment, received in cash. The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)'s finding. The Revenue, as the appellant before the High Court, contended that the findings of the CIT(A) and ITAT were perverse.

What were the issues?

1. Whether the findings of the CIT(A) and ITAT upholding the genuineness of the commission payment of ₹60,45,890 are perverse, thereby warranting disallowance under Section 37(1) of the Income Tax Act, 1961. Assessee's Contention: Not recorded. Revenue's Contention: The findings of the CIT(A) and ITAT are perverse. The Revenue relies on the initial assessment order of the AO which disallowed the expenditure based on the statements of the commission recipients. The Revenue argues that the CIT(A) and ITAT erred in interpreting the statements to conclude the payments were genuine for job work.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . 09.11.2010 . Present: Ms. Prem Lata Bansal, Advocate for the Appellant. . + ITA No.1715/2010. . The Assessing Officer had disallowed the expenditure claimed by the assessee to the extent of ` 60,45,890/-. This was shown as commission by the assessee, initially, before the Assessing Officer. One of the reasons for disallowance was that the persons who were paid this commission were not produced. Few persons who were produced for their statement before the Assessing Officer had stated that they were employed by the assessee on an earlier occasion but had not done any job work for the assessee for the relevant Assessment Year. However, this finding of the Assessing Officer was overturned by the CIT(A), and on the basis of same statement of the said persons arrived at a conclusion that they have done job work for the assessee for which payments were made. The CIT(A) also held that these persons belong to the lower income segment of the society and, therefore, they had received the payment in cash for the job work done. Specific finding is recorded that the payment made to them are genuine. The ITAT has upheld this finding. The sole endeavour of learned counsel for the appellant is to demonstrate that the aforesaid finding of the CIT(A) as well as ITAT are perverse. In order to appreciate the contention of . . learned counsel for the appellant, we would like to have the copies of the -2- statement of Sh. Dinesh Kumar @ Danish Kumar, Sh. Lal Babu Mandal, Sh. Parshu Ram, Sh. Ram Babu Singh and Smt. Sheetal. List again on 16.12.2010. . A.K. SIKRI, J. . SURESH KAIT, J. NOVEMBER 09, 2010 hk . . . #29

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