ACIT 21(1), MUMBAI vs. HARRISON GARMENT DIVISION, MUMBAI

ITA 5459/MUM/2016Status: DisposedITAT Mumbai22 February 2018AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the facts and circumstances were identical to previous assessment years where a coordinate bench had deleted a similar disallowance, the order of the CIT(A) deleting the disallowance should be confirmed.

What were the facts?

The Revenue appealed the deletion of a disallowance of commission expenses amounting to Rs. 36,03,599/-. The Assessing Officer had disallowed the commission paid to a non-resident agent for sales procurement outside India.

What were the issues?

Whether the disallowance of commission expenses paid to a non-resident agent for foreign sales procurement was justified, especially when similar disallowances were deleted in prior years.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, G Bench, Mumbai

Before: Shri C.N. Prasad & Shri A.L. Saini

For Appellant: Shri V. Vidyadhar

For Respondent: Shri Sameer G. Dalal

Hearing: 22.02.2018Pronounced: 22.02.2018

This appeal has been filed by the Revenue against the order of the CIT(A)-33, Mumbai dated 21.06.2016 for A.Y. 2012-13 arising out of the assessment order passed under Section 143(3) of Income Tax Act, 1961 (hereinafter “the Act”).

The only grievance of the Revenue in this appeal is in respect of deletion of disallowance of `36,03,599/- on account of commission expenses.

At the outset the learned counsel for the assessee submitted that similar issue came up before the Tribunal in assessee’s own case for assessment years 2008-09 and 2009-10 in &

M/s. Harrison Garments Division 6480/Mum/2012 dated 30.04.2014 wherein the AO disallowed the commission payable to non-resident agent, Mr. Lenny King for procurement of sales outside India. Referring to the said order of the Tribunal the learned counsel submitted that the Tribunal deleted the disallowance made by the AO. Therefore the same may be followed for the current assessment year also as there is no change in facts. The learned counsel submits that in fact the CIT(A) followed the order of the Coordinate Bench for assessment years 2008-09 and 2009-10.

The learned D.R., on the other hand, vehemently supported the order of the Assessing Officer.

We have heard the rival submissions and perused the orders of the authorities below. The AO disallowed agency commission payable to Mr. Lenny King by observing that the assessee failed to establish with documentary evidence that services were rendered by the foreign agent.

Similar disallowance was made in assessment years 2008-09 and 2009-10 and the Coordinate Bench deleted the disallowance vide order dated 30.04.2014 in & 6480/Mum/2012. During current assessment year also similar disallowance was made by the AO. It is undisputed fact that there is no change in facts and circumstances in the assessment years 2008-09, 2009-10 and the year under consideration.

Therefore, respectfully following he said decision of the Coordinate Bench in assessee’s own case we confirm the order of the learned CIT(A) who deleted the disallowance of agency commission by following the order of the Coordinate Bench. Grounds raised by Revenue are rejected.

M/s. Harrison Garments Division 6. In the result, the appeal filed by the Revenue is dismissed.

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