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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI GIRISH AGRAWAL
PER GIRISH AGRAWAL, AM:
This appeal by the Revenue and cross objection by the assessee are arising out of the order of Commissioner of Income Tax (Appeals)-12, Chennai in vide order dated 30.10.2017. The assessment was framed by the ACIT, Non-Corporate Circle 10(1), Chennai u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 30.03.2015 for the assessment year 2012-13.
ITA 85/Chny/2018 2. During the course of hearing before us, the ld.counsel for the assessee pointed out that the tax effect in this appeal is below Rs.50.00 lakhs. The ld.counsel for the assessee further submitted that in view of the CBDT Circular No.17/2019, dated 08.08.2019 brought out by the Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, the appeal was not maintainable and be dismissed. The Ld. Senior DR also agreed to the facts stated by the Ld.counsel for the assessee.
C.O No.57/Chny/2018 3. We have heard the rival submissions and perused the material on record. We find from the records before us that the tax involved in the disputed issue is below Rs.50 lakhs and therefore, in view of the CBDT Circular No. 17/2019 dated 08.08.2019 no appeal should be filed by the Revenue before the Tribunal which has tax effect of Rs. 50.00 lakhs or less and this circular is also applicable retrospectively to all pending appeals. Therefore, the appeal filed by the Revenue is dismissed.
C.O No.57/Chny/2018 4. The only issue in this cross objection of the assessee is as regards to the order of CIT(A) confirming the disallowance made by the AO on commission expenses amounting to Rs.34,05,720/-. For this, assessee has raised the following three grounds:-
1. 1. The order of the Commissioner of Income Tax (Appeals)-12, Chennai dated 30.10.2017 in I.T.A.No.46/CIT(A)-12/2015-16 for the above mentioned Assessment year to the exent of upholding of the disallowance of Rs.34,05,720/- is contrary to law, facts and in the circumstances of the case.
2. The CIT(Appeals) erred in sustaining the disallowance of commission paid and consequently erred in sustaining the addition of such sum partly in the computation of taxable total income without assigning proper reasons and justification.
3. The CIT(Appeals) failed to appreciate in proper perspective the detailed evidences placed on record especially the affidavit dated 31.08.2017 by Mr. Rajeev Chowdhary thus vitiating his findings at para 16 of the impugned order.
C.O No.57/Chny/2018 5. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the assessee is engaged in the business of processing and trading natural minerals (lime stones, red oxide powder, china clay powder, barites powder, soap stone powder and mica). The assessee has claimed commission payment of Rs.1,42,69,279/- paid during the financial year 2011-12 relevant to assessment year 2012-13. After the assessment order and the order of CIT(A), the only dispute remains on the commission payment of Rs.34,05,720/-. The AO noted that the assessee has paid round sums to certain individuals / HUFs which are as follows:- Rs. Giridhari Lal Chowdry 8,00,000 Giridhari Lal Chowdry HUF 5,00,000 Shakunthaladevi Chowdry 5,00,000 Rajeev Chowdry 3,00,000 Rajeev Chowdry HUF 5,50,000 Sanjeev Chowdry 3,00,000 Sanjeev Chowdry HUF 3,50,000 Deepa Chowdry 4,00,000 Namita Chowdry 4,00,000 Total 41,00,000 Both the authorities below i.e., the AO and the CIT(A) has categorized the commission payment into four categories and this third category payments amounting to Rs.34,05,720/- was paid to C.O No.57/Chny/2018 the above nine persons. The concurrent finding of both the authorities below is that there is no agreement with the above parties, there is no invoice raised for payment of above commissions and the assessee only produced ledger copies of the accounts of those parties. Apart from that no details of commission available and even no communication indicating the services rendered by the above parties either available in the record of the AO or CIT(A). The CIT(A) confirmed the addition by observing in para 16 as under:- 16. Out of the above, for Sl.No.1 to 9, there are no details available as mentioned earlier. All of them are related to each other to whom certain round sums are paid by the appellant. The appellant could not give any evidence indicating the work carried out by them. No details have been filed. In fact, the statement that they are “beneficiaries” show that they are not Commission agents. Since the appellant could not substantiate the reasons for making payment parties in Sl.No. 1 to 9 of Rs.34,05,720/-, I confirm the disallowance made by the Assessing Officer to this extent.
When this was pointed out to ld.counsel for the assessee he could not substantiate or could not file any evidence before us even during the course of hearing. On query from the Bench, that the assessee has any evidence regarding payment of commission by cheque or any invoice or any TDS deducted or proof of any services rendered by those parties, the ld.counsel could not answer. We noted that neither before the AO nor before the CIT(A) and even
C.O No.57/Chny/2018 now before us there is no iota of evidence in regard to payment of this commission and hence we have no alternative except to confirm the disallowance of commission. Therefore, the ground raised by assessee in regard to this claim of disallowance of commission is dismissed.
In the result, the appeal filed by the Revenue as well as the cross objection filed by the assessee are dismissed.
Order pronounced in the court on 3rd March, 2022 at Chennai.