INCOME TAX OFFICER, JAIPUR vs. SHRI SURESH KUMAR KHANDELWAL, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh Hkkxpan] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM vk;dj vihy la-@ITA No. 286/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2013-14 cuke The ITO, Shri Suresh Kumar Khandelwal Vs. Ward-3(2), B-7, Shiv Marg, Banipark, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACWPK 9243 K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : None jktLo dh vksj ls@ Revenue by : Smt. Punam Rai (DCIT) lquokbZ dh rkjh[k@ Date of Hearing : 27/06/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 02/07/2018 vkns'k@ ORDER

PER: VIJAY PAL RAO, J.M.

This appeal by the Revenue is directed against the order of dated

28.12.2017 of CIT(A), Jaipur for A.Y. 2013-14. The Revenue has raised

the following grounds as under:-

“i) Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in accepting the additional evidences produced by the assessee? ii) Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in setting aside the findings arrived at consequent to the information called for under Sec. 133(6) during the assessment proceedings wherein the

ITA No. 286/JP/2018 ITO vs. Shri Suresh Kumar Khandelwal

purchasers denied the involvement of any commission agent, and allowed the claim of commission to the assessee? iii) Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justified in allowing the appeal of the assessee on the principle of consistency for A.Y. 2012-13 & 2013- 14 on the ground that the AO has allowed the claim of commission in A.Y. 2014-15 the assessment for which was completed after the assessment order for A.Y. 2012-13 & 2013- 14? The appellant craves the right to amend alter or add to any of the grounds of appeal given above.”

the service of notice as per acknowledgement on record. Accordingly

we propose to hear and disposed off of this appeal ex-parte.

material on record. The assessee is a dealer of Steel Authority of India

and selling the iron & steel as a whole seller. During the course of

assessment proceedings the AO noted that the assessee has made

payment of sales commission of Rs. 38,74,553/- to various parties

during the year under consideration. The AO issued notice U/s 133(6) of

the Act to the purchasers of the goods from the assessee to verify

whether the alleged agents to whom commission was paid were

involved in the transaction of sale. Out of 12 parties to whom notice U/s

133(6) was sent by the AO only four responded and denied having any

ITA No. 286/JP/2018 ITO vs. Shri Suresh Kumar Khandelwal

involvement of agents in the purchase and sale of iron and steel from

the assessee. These four parties have clearly stated that they have

directly purchased the goods from the assessee without any service by

the brokers. Accordingly, the AO disallowed this amount of Rs.

38,74,553/- for want of any service rendered by the persons to whom

the alleged commission was claimed to have been paid. On appeal, the

ld. CIT(A) issued a remand order and after considering the remand

report has allowed the claim of the assessee and consequently deleted

the addition made by the AO.

invoices containing the names of such brokers, ld. CIT(A) called for a

remand report which is reproduced at page 5 as under:-

“Kindly refer to your kind letter No. 2014 dated 20.02.2017 calling for report on additional evidences in the case of Shri Suresh Kumar Khandelwal AY 2012-13 & 2013-14 regarding. In this connection, it is submitted that Shri Rajendra Gupta, CA attended the office on 22.02.2017 and assured that the persons who have received the commission from various parties would be produced within a week or so. However, AR has not produced these persons. It is, therefore, requested that the addition evidence produced during the appellate proceedings may not be accepted and the facts as brought on record by the AO may Kindly be accepted.”

Thus, it is clear that during the remand report the assessee assured

that the persons who have received the commission from various 3

ITA No. 286/JP/2018 ITO vs. Shri Suresh Kumar Khandelwal

parties would be produced within a week or so. However, the assessee

failed to produce these persons for verification as directed by the ld.

CIT(A). After receiving the remand report the ld. CIT(A) has allowed the

claim of the assessee on the ground that in the remand proceeding of

the AO asked the assessee to produce the commission agent whereas in

the assessment proceeding the AO issued notices U/s 133(6) of the Act

to the buyers. We find that the reasons of reversing the order of the

Assessing Officer is not proper and particular in view of the fact that the

AO made all efforts to verify the claim of the assessee by conducting an

enquiry from the buyers as well as from the commission agents.

However, both the buyers as well as commission agents failed to

respond or to appear before the AO for verification. The onus is on the

assessee to produce the commission agents for verification. Further, the

AO has also took steps to verify the claim through buyers and only four

buyers responded to the notice issued by the AO who have denied

involvement of any commission agents. Thus, in these facts and

circumstances of the case we find that the assessee has failed to

discharge its own to prove the claim and particularly on the point

whether the commission agents have rendered any services against

alleged payment of Rs. 38,74,553/-. Since, the assessee has not

ITA No. 286/JP/2018 ITO vs. Shri Suresh Kumar Khandelwal appeared despite notice therefore, taking a lenient view we set aside the impugned order of the ld. CIT(A) and restore the matter to the record of the Assessing Officer for giving one more opportunities to the assessee to substantiate the claim with supporting evidence and material. In the result, the appeal of the Revenue is allowed for statistical purposes.

Order pronounced in the open court on 02/07/2018.

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सहायक पंजीकार@Aेेज. त्महपेजतंत