THE ACIT,CIRCLE - 1, RAJAHMUNDRY vs. M/S. SAMPAT KUMAR BANG, RAJAHMUNDRY

आदेश / O R D E R

PER D.S. SUNDER SINGH, Accountant Member:

This appeal filed by the revenue is directed against order of the

Commissioner of Income Tax (Appeals)-11 {CIT(A)}, Mumbai, Camp at

Visakhapatnam vide ITA Nos.518/11-12/ACIT,C-1/RJY/12-13 dated

8.1.2013 for the assessment year 2009-10.

specific adjudication.

regard to additional evidence. During the appeal hearing, the Ld. D.R.

did not establish that the CIT(A) has considered the fresh evidence

without giving opportunity to the A.O. The Ld. A.R., on the other hand,

submitted that with regard to the addition of ` 53,39,842/-, the Ld.

CIT(A) has called for the remand report, and after considering the

remand report, the Ld. CIT(A) has passed the appeal order, hence,

argued that there is no case of violation of Rule 46Aof IT Rules, hence

requested to dismiss the ground.

on record and gone through the orders of the authorities below. As per

the record, there is no case of violation of Rule 46A and the CIT(A) has

ITA No.166/Vizag/2013 & CO No.80/Vizag/2013 M/s. Sampat Kumar Bang, Rajahmundry called for the remand report and after considering the remand report,

the Ld. CIT(A) has passed the order. Therefore, the ground raised by

the A.O. is infructuous and accordingly dismissed.

of payments made to persons specified in section 40A(2)(b) of the Act.

The Ld. D.R. during the appeal hearing has submitted that ground No.4

is related to the addition of ` 53,39,842/- pertaining to commission and

brokerage. The Ld. D.R. submitted that the A.O. has made the addition

of ` 53,39,942/- on account of difference in commission and brokerage

as per the TDS certificate and admitted in P&L account. These are

payments in respect of the person specified in section 40A(2)(b) of the

Act but neither the CIT(A) nor the assessing officer has examined the

genuineness of payments as well as the payments specified u/s

40A(2)(b) of the Act. The A.O. even in remand report has not examined

the genuineness of payments and payments made in respect of specified

persons u/s 40A(2)(b) of the Act, hence, requested to set aside the

matter to the file of the A.O. for fresh consideration.

not the payments made to the specified persons u/s 40A(2)(b) of the

Act. The case of the A.O. was not accounting the receipts as per the

TDS certificates. The assessee has submitted all the evidences before 3

ITA No.166/Vizag/2013 & CO No.80/Vizag/2013 M/s. Sampat Kumar Bang, Rajahmundry the CIT(A) and filed reconciliation statement which was scrutinized and

verified by the A.O. and satisfied with regard to the genuineness as well

as the correctness of the expenditure and submitted the remand report.

After verifying the entire material, the A.O. has submitted the remand

report accepting the income admitted by the assessee is in order.

Hence argued that there is no case for setting aside the issue to the file

of A.O. and requested to uphold the order of the CIT(A).

on record and gone through the orders of the authorities below. On

verification of the assessment order, we find that the A.O. has not made

out any case for addition u/s 40A(2)(b) of the Act with regard to the

payments made to specified persons. For ready reference, we extract

the relevant para of the assessment order, which reads as under:

“On verification of TDS certificates enclosed to the return of income, it is found that the assessee is received Rs.54,72,747/- as commission and brokerage on which tax was deducted at source and credit allowed. Verification of the P&L account, an amount of Rs.1,32,885/- was only offered as income by crediting the P&L account; thus leaving a difference of Rs.53,39,842/-. Hence, the same is added back to the income returned.”

dismissed.

and reconciliation/statement filed by the assessee to the A.O. for 4

ITA No.166/Vizag/2013 & CO No.80/Vizag/2013 M/s. Sampat Kumar Bang, Rajahmundry

submission of remand report. The A.O. has verified the evidences and

the reconciliation filed by the assessee and submitted the report

accepting the correctness. The Ld. CIT(A) relying the remand report of

the A.O. has deleted the addition. For ready reference, we extract the

relevant paragraphs of the order of the CIT(A), which reads as under:

5.2 Regarding the discount, the Ld. AR furnished a copy of ledger account of discount wherein total discount credited is Rs.52,78,576/- whereas discount income transferred to P&L account by way of journal entry dtd.31.03.2009 is Rs.14,65,486/-. The AO in his remand report has mentioned that discount paid/allowed to various customers is Rs.14,65,486/-. The matter was further sent for remand vide letter dtd.23.08.2012 and the AO was requested to examine the copy of the 5

ITA No.166/Vizag/2013 & CO No.80/Vizag/2013 M/s. Sampat Kumar Bang, Rajahmundry

ledger accounts of commission, discount, volume discount and service tax and in his remand report dtd.19.11.2012 AO has stated as under:

(vi) Regarding Commission assessee, who had already submitted account copy and confirmation letter from party that commission was paid, told that there is nothing left unaccounted to be taken on accrual basis for F. Y 2008-09. AO verified the amount of commission, confirmation letter and TDS made on that and found in order. (vi,) Regarding Discount, four parties are there, and nothing is left unaccounted to be taken on accrual basis for F. Y. 2008-09. AO verified the amount of discount, confirmation letter and TDS made on that and found in order. (viii) Regarding Volume Discount, there are four parties and AR/Assessee confirmed that there is nothing left unaccounted to be taken on accrual basis for F. V. 2008-09. A0 has verified the volume discount, individual party ledger account and confirmation letter. A0 has found them in order.

(ix) Regarding Service Tax Account, assessee paid four amount Rs. 6,979/-, Rs. 3,854/-, Rs.5,400/-1 Rs.2,002/- in F V.2008-09, and balance amount of Rs.2,156/- paid on 04.07.2009. Nothing is left unaccounted in accounting year 2008-09.

5.3 In the above paragraphs, AO has categorically recorded the finding that commission, discount, volume discount, are found in order whereas the service tax is paid for the year till 04.07.2009 and nothing is left unaccounted in the accounting year 2008-09. The Ld. AR has further filed written submission on 07.01.2013 regarding the above additions as under:

5.4 Considering the facts of the case, submissions made by the Ld. AR and the reports of the AO in remand, it is hereby held that the commission income as per TDS certificates has been fully reconciled by the appellant before the AO and hence the addition made on this count is directed to be deleted.

report and after reconciling the entire difference, we do not find any

reason to interfere with the order of the CIT(A) and the same is upheld.

ITA No.166/Vizag/2013 & CO No.80/Vizag/2013 M/s. Sampat Kumar Bang, Rajahmundry Cross objection No.80/Vizag/2013: (ITA 166/Vizag/2013)

cross objections are adjudicated in revenue’s appeal, hence, no separate

adjudication is considered necessary and the cross objections raised by

the assessee are allowed. The above order was pronounced in the open court on 25th Jan’18.

Sd/- Sd/- (वी. दुगा�राव) ( ड.एस. सु�दर "संह) (V. DURGA RAO) (D.S. SUNDER SINGH) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER #वशाखापटणम /Visakhapatnam: 'दनांक /Dated : 25.01.2018 VG/SPS आदेश क� ��त)ल#प अ*े#षत/Copy of the order forwarded to:-