M/S PIYUSH JAIN & COMPANY,NEW DELHI vs. ACIT, NEW DELHI

(A) This appeal has been filed by the Assessee against the impugned appellate order dated 23.02.2017 passed by Learned Commissioner of Income Tax (Appeals)-11, New Delhi, [in short, “Ld.CIT(A)”] pertaining to Assessment Year 2011-12. The Assessee has raised following grounds of appeal:-

“1. That the order of the Commissioner of Income Tax (Appeals) [“the Ld. CIT(A)”], New Delhi, dated 15.04.2014, is bad in law and on facts. 2. That the Ld. CIT(A) has erred in law and on facts in sustaining the part disallowance of Rs. 4,66,681/- out of the total disallowances of Rs. 7,58,687/- made by the Ld. Assessing Officer. Page 1 of 15 ITA No.- 2514/Del/2017. M/s Piyush Jain & Co. 2.1 That the Ld. CIT(A) has erred in law and on facts in sustaining the disallowance of Rs. 4,66,681/- on account of commission paid by the appellant firm to three parties namely Shri Arvind Adukia, Shri Siddharth Sarna and Shri Gurpreet Singh Brar despite the fact that the appellant provided all the supporting evidences to prove genuineness of commission paid.

(B) Assessment Order dated 26.02.2014 was passed by the Assessing Officer (“AO’, for short) under Section 143(3) of the Income Tax Act, 1961 (“I.T. Act”, for short), wherein total income was assessed at Rs. 50,06,500/- (rounded off) as against returned income of Rs. 29,24,460/-. The addition made by the AO included an amount of Rs. 7,58,687/- on account of disallowance of Commission paid by the Assessee. The relevant portion of the aforesaid Assessment Order dated 26.02.2014 is reproduced as under:

ITA No.- 2514/Del/2017. M/s Piyush Jain & Co. ITA No.- 2514/Del/2017. M/s Piyush Jain & Co. ITA No.- 2514/Del/2017. M/s Piyush Jain & Co.

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(C) The Assessee filed appeal before the Ld. CIT(A). Vide aforesaid impugned appellate order dated 23.02.2017, the Ld. CIT(A) deleted an amount of Rs. 2,92,006/- out of the aforesaid disallowance of Rs. 7,58,687/- and sustained the remaining disallowance amounting to Rs. 4,66,681/-. The relevant portion of the aforesaid impugned appellate order dated 23.02.2017 of Ld. CIT(A) is reproduced as under:

ITA No.- 2514/Del/2017. M/s Piyush Jain & Co. ITA No.- 2514/Del/2017. M/s Piyush Jain & Co. ITA No.- 2514/Del/2017. M/s Piyush Jain & Co. ITA No.- 2514/Del/2017. M/s Piyush Jain & Co.

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(D) This present appeal has been filed by the Assessee against the aforesaid impugned appellate order dated 23.02.2017 of Ld. CIT(A). In the course of appellate

ITA No.- 2514/Del/2017. M/s Piyush Jain & Co. proceedings in Income Tax Appellate Tribunal (“ITAT”, for short), a Paper Book containing the following particulars was filed from the assessee’s side:

(D.1) In addition, a copy of Bank Statement of the assessee in Axis Bank was also submitted during the appellate proceedings in ITAT.

ITA No.- 2514/Del/2017. M/s Piyush Jain & Co. (D.2) Moreover, a letter dated 16.01.2020, certifying that various documents were filed before the lower authorities at the time of proceedings before them, was also filed, which is reproduced below for ease of reference:

ITA No.- 2514/Del/2017. M/s Piyush Jain & Co.

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(E) At the time of hearing before us, the Ld. Counsel for assessee submitted that the only reason for which the Ld. CIT(A) has sustained the aforesaid disallowance of Rs. 4,66,681/- is that the assessee did not furnish original confirmation letters from these three parties namely Mr. Arvind Adukia, Mr. Siddharth Sarna and Mr. Gurprett Singh Brar; although photocopies of the confirmation letters were submitted. It was submitted by the Ld. Counsel for assessee that the confirmation was obtained by the assessee through E-mail, which is why original confirmation letters could not be obtained. It was further submitted by the Ld. Counsel that because of substantial lapse of time, the original confirmation letters are not available presently. However, the Ld. Counsel for Assessee submitted that the requirement of filing original confirmation may be waived in the present case, because the genuineness of the payments totaling the ITA No.- 2514/Del/2017. M/s Piyush Jain & Co. aforesaid Rs. 4,66,681/- has been proved beyond doubt by the assessee by supporting evidences and the amount should not be disallowed merely because Xerox copies of the confirmations have not been supplemented with original confirmation letters. He took us through the aforesaid Paper Book filed from the assessee’s side during appellate proceeding in ITAT, and also, the copy of the aforesaid Bank Account; to establish that aforesaid payments totaling Rs. 4,66,681/- are genuine and are eligible for deduction.

The Ld. Counsel for assessee also placed reliance on order dated 26.09.2019 of Co- ordinate Bench of ITAT in the ITA No.-865/Del/2015 in the case of ACIT vs. Varun Beverages Ltd; order dated 15.04.2016 of High Court of Calcutta in the case of Ashok Surana v. CIT [2017] 79 taxmann.com 318 (Calcutta); order dated 16.07.2015 of Co- ordinate Bench of ITAT, Delhi in the case of Cheil India (P.) Ltd. vs. ITO in order dated 23.03.2009 of High Court of Delhi in the case of CIT vs. Hi Lux Automotive (P.) Ltd. [2009] 183 Taxman 260 (Delhi); and order dated 18.07.2003 of High Court of Delhi in the case of CIT vs. S.J. Knitting & Finishing Mills (P.) Ltd. [2004] 136 Taxman 13 (Delhi). The Ld. Departmental Representative (“Ld. DR”, for short) was also of the view that the aforesaid documents relied upon by the Ld. Counsel for assessee do prove that the claim of aforesaid amount of Rs. 4,66,681/- made by the assessee is genuine and allowable under I.T. Act. However, the Ld. DR expressed apprehension whether the aforesaid documents [referred to in the foregoing paragraphs (D) and (D.1) of this order] were made available to the AO for the consideration of the AO. The Ld. DR contended that the aforesaid addition of Rs. 4,66,681/- may be deleted if the aforesaid documents were made available to the AO for the consideration of the AO. In rejoinder, the Ld. Counsel for assessee affirmed Page 13 of 15

ITA No.- 2514/Del/2017. M/s Piyush Jain & Co. that he was making a categorical statement standing at the Bar of the Court-Room, that all the aforesaid documents were available before the AO which were further confirmed by the certificate vide aforesaid letter dated 16.01.2020.

(F) We have heard both sides. We have considered the orders and judicial precedents brought to our attention at the time of hearing or referred to in the records. Both sides are in agreement that the aforesaid documents and evidences proved the genuineness of the aforesaid expenses totaling Rs. 4,66,681/- and that it was allowable under I.T. Act. In view of this, we direct the AO to delete the aforesaid disallowance totaling Rs. 4,66,681/-. However, in view of the apprehension expressed by the Ld. DR that all aforesaid documents[referred to in foregoing paragraphs (D) and (D.1) of this order] may not have possibly been available to the AO for the consideration of the AO, we give liberty to Revenue to move an application under Section 254(2) of I.T. Act for recalling this order and for restoration of appeal if it is found that the aforesaid documents relied upon by the Ld. Counsel for assessee were not available to the AO for the consideration of the AO.

(G) In the result, appeal of the Assessee is allowed for statistical purposes.

Order pronounced in the open court on 20/01/2020.