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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA
O R D E R Per Shamim Yahya, A. M.: This appeal by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals)-3, Thane dated 22.03.2015 and pertains to the assessment year 2014-15.
The grounds of appeal read as under: Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)- 3, Thane erred in deleting the addition of Rs. 31,29,495/- on account of commission claimed by the assessee, without appreciating the facts that the (A.Y.2014-15) ITO vs. M/s. Irani Abresives assessee could not substantiate its claim of services from M/s. Utkarsh Enterprises for which it has paid commission to M/s. Utkarsh Enterprises. _ .. The appellant prays that the order of the Ld. CIT(A)-3, Thane, should be set- aside and that of the Assessing Officer should be restored.
3. The assessee firm is engaged in manufacturing in grinding wheels. During the assessment proceedings, it was noticed by the Assessing Officer that, the assessee firm has paid commission of Rs.31,29,495/- to M/s. Utkarsh Enterprises. The assessee filed confirmation along with ITR-V but failed to submit copy of bills/invoices raised by M/s. Utkarsh Enterprises. Further, response to summons, the proprietor of M/s.
Utkarsh Enterprises did not attend; however, submitted through post copy of bank statement, ledger account of assessee, copy of invoice, copy of ITR along with computation. The Assessing Officer however added back the amount of commission by stating that no details such as working of commission, details of service provided and percentage of commission are given and further assessee failed to respond to the letter dated 13,12.2016.
Upon the assessee’s appeal, the ld. Commissioner of Income Tax (Appeals) deleted the addition by holding as under:
(iii) The disallowance made by the AO is not justified and the same is deleted on the following reasons a) The appellant has filed all requisite details and in response to summon u/s.131, Mr. Lauklk Korgaonkar, Prop of M/s. Utkarsh Enterprises has filed all the requisite details like Bank Statement showing receipts of Commission amount, Ledger account confirming all the commission receipts transactions, Copy of ITR for AY 2014-2015 along with Computation of Income, In fact, Mr. Laukik Korgaonkar, Prop. of M/s Ukarsh 'Enterprises could not attend personally, due to sad demise of his mother, therefore, since there was no personal attendance it cannot be the reason for disallowance, b) The commission is not only paid in the year under appeal, but was paid prior to this year, i.e. in A.Y.s 2013-14, 2012-13 & 2011-12 and the (A.Y.2014-15) ITO vs. M/s. Irani Abresives payments of commission were accepted by the then AO under scrutiny assessment u/s,143(3) of the Act. c). The appellant has also deducted TDS on commission paid and M/s.Ukarsh Enterprises has also paid the tax. Therefore, the reasons for disallowance of commission paid are not sustainable, hence, the same is deleted and the appeal of the appellant on this ground is allowed. 5. Against the above order, the Revenue is in appeal before the ITAT.
I have heard both the counsels and perused the records. I find that in this case the assessee has submitted all the necessary details of the commission payment to the concerned party before the Assessing Officer. Adverse inference taken by the Assessing Officer is primarily due to the non attendance to the recipients of commission. The ld. Commissioner of Income Tax (Appeals) has noted that this was primarily due to the sad demise of mother of recipient. Further, the ld. Commissioner of Income Tax (Appeals) has noted that the said commission was paid in earlier years also and the payment was accepted by the Assessing Officer in the scrutiny u/s. 143(3) of the Act. The Assessing Officer has also deducted TDS on the said payment and paid the tax. Under these circumstances, in my considered opinion, there is no infirmity in the order of the ld. Commissioner of Income Tax (Appeals). I accordingly uphold the same.