DATTATRAY SHANKAR MASURKAR,RAIGAD vs. DEPUTY COMMISSIONER OF INCOME-TAX,

PER D. KARUNAKARA RAO, AM:

This is the appeal filed by the assessee against the order of CIT(A)-

2, Thane, dated 31-03-2016 for the A.Y. 2012-13.

“1. The Ld.CIT(A) has erred in law and on facts in sustaining disallowance for commission expenses of Rs.8,95,599/- paid to various parties under the head commission expenses.

2 ITA No.1208/PUN/2016 Shri Dattatray Shankar Masurkar

From the above, it is evident that the only issue for adjudication by

us relates to sustaining of disallowance of commission expenses to the

tune of Rs.8,95,599/-.

and is engaged in Land Brokerage Commission Agent. Assessee claimed

total sum of Rs.37,90,599/- as commission paid to 10 of his sub-

brokers. As per the discussion given by the AO in Para No.6 and its sub-

paragraphs, the AO disallowed the entire claim of commission

expenditure. AO held that the assessee failed to satisfy the conditions

specified in section 68 of the Act.

evidences furnished by the assessee and noted that the major payment of

commission of Rs.28,95,000/- was paid to Mr. Mangesh Dalvi out of

Rs.37,90,599/-. CIT(A) allowed the same and confirmed the balance sum

of Rs.8,95,599/-. While doing so, the CIT(A) gave the following finding

and the contents of Para No.10.2 of his order is extracted here as under :

3 ITA No.1208/PUN/2016 Shri Dattatray Shankar Masurkar

“10.2 From the above details, it is seen that the commission of Rs.8,95,599/-, paid to the above persons, which appears to be not genuine person, who could have rendered the services for getting commission. Accordingly, the Ld. AR was requested to justify the genuineness of the above payments, by furnishing credible documents. In compliance, the Ld. AT could not substantiated the basis of payment of above amounts. The Ld. AR could not file any credible documents, to establish the genuineness of the above payments. In compliance, it is stated that the appellant has nothing to substantiate the above claim. In view of these facts, vide order sheet nothing dated 30/3/16, it is stated that the disallowance to this extent, is not pressed. Accordingly, the disallowance of commission expense, to the extent of Rs.8,95,599/-, is liable to be sustained.”

Tribunal challenging the impugned order of the CIT(A) with the grounds

referred above.

attention to the correspondence and the written submissions and

submitted that the assessee never gave the consent for offering the said

amount of Rs.8,95,599/- or not pressing the claim. The fact about

asking for the copy of the order sheet was also demonstrated. Further,

he submitted that this issue may be remanded to the file of CIT(A) for

fresh adjudication on the said disallowance involving 8 persons who

received the commission from the assessee. Further, Ld. Counsel for the

assessee drew our attention to the following additional ground filed by

him and submitted that the entire commission paid by the assessee is

genuine and therefore, the claim is required to be allowed in favour of the

assessee, in principle . The said additional ground is extracted as under:

“The Ld.CIT(A) on the facts and in law has erred in sustaining the disallowance of Rs.8,95,599/- in respect of commission paid to the following 08 parties with the remarks that the Ld. Authorised

4 ITA No.1208/PUN/2016 Shri Dattatray Shankar Masurkar

Representative of the assessee has stated that the appellant has nothing to substantiate this claim and in view of these facts vide order sheet nothing dated 30-03-2016 it is stated that the disallowances to this extent is not pressed.”

From the above, it is evident that the additional ground relates to

the fact relating to the non-pressing of the claim of commission payment

to the extent of Rs.8,95,599/-. Further, the paper book contains the

evidences in the form of confirmation letters involving said 8 persons who

received the commission.

genuineness of expenditure qua rendering of services by the sub-brokers.

There are confirmation letters filed by the 8 of the sub-brokers. Further,

nothing is brought to our notice by the Revenue giving the reasons for

justifying the decision of the CIT(A) against the with reference to

Rs.8,95,599/-. Assessee is not satisfied with the way the evidences are

appreciated by the AO/CIT(A). Considering the same, we are of the

opinion that the decision of the CIT(A) given in the para 10.2, needs

reconsideration of the facts. Further, it is in the interest of justice that

the issue should be adjudicated on merits. Ld. Counsel for the assessee

vehemently argued stating that the assessee never gave his consent for

not pressing the issue. Therefore, on admitting the additional ground,

we are of the opinion that the matter should be remanded to the file of

CIT(A) for fresh adjudication after considering the

documents/confirmation letters filed by the said brokers/commission

agents and decide the issue as per the law. It goes without saying that

5 ITA No.1208/PUN/2016 Shri Dattatray Shankar Masurkar

the CIT(A) shall afford reasonable opportunity of being heard to the assessee in accordance with the set principles of natural justice. Accordingly, the grounds/additional ground raised by the assessee are

allowed for statistical purposes.

purposes.

Order pronounced on 06th day of August, 2018.

Sd/- Sd/- (िवकास अव�थी िवकास अव�थी िवकास अव�थी /VIKAS AWASTHY) (डी िवकास अव�थी डी डी. क�णाकरा राव डी क�णाकरा राव क�णाकरा राव/D. KARUNAKARA RAO) क�णाकरा राव �याियक सद�य �याियक सद�य/JUDICIAL MEMBER लेखा सद�य �याियक सद�य �याियक सद�य लेखा सद�य लेखा सद�य/ACCOUNTANT MEMBER लेखा सद�य

पुणे / Pune; �दनांक / Dated : 06th August, 2018. Satish

आदेश क� �ितिलिप अ�ेिषत आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : आदेश क� �ितिलिप अ�ेिषत आदेश क� �ितिलिप अ�ेिषत

आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.