RITU SANJAY TOSHNIWAL,MUMBAI vs. ASST CIT 21(3), MUMBAI

Learned Counsel for the assessee, at the outset submits that both these appeals are related to disallowance of commission payable to M/s.Shore Chem. LLC (USA) and the assessee submits that additional

Learned Counsel for the assessee referring to the Coordinate Bench decision in assessee’s own case for the Assessment Years 2009-10 & 2010-11 in ITA.No.7725 & 7213/Mum/2014 dated 12.05.2017 submits that the very same issue of disallowance of commission came up before the Coordinate Bench and the additional evidences filed by the assessee were admitted and the issue is restored to the file Assessing Officer for fresh adjudication. Therefore, the Learned Counsel for the assessee submits that since the matter on similar issue has been restored to Assessing Officer for the subsequent Assessment Years he requested for restoring these two appeals also for fresh adjudication considering the additional evidences submitted before this Tribunal.

Ld. DR has no serious objection in restoring the matter to the file of the Assessing Officer for fresh adjudication as the Coordinate Bench had

Having heard both the parties and on a perusal of the additional evidences as well as the Coordinate Bench decision, we find that the additional evidences furnished before us were admitted on similar issue for the Assessment Years 2009-10 and 2010-11 and restored the issue to the file of the Assessing Officer for fresh adjudication. The Coordinate Bench while restoring the issue to the file of the Assessing Officer observed as under: - “7. We have considered the submissions of the parties and perused the materials on record. As it appears from record, assessee’s claim of commission payment to the foreign agent has been disbelieved primarily on the basis of information received under exchange of information Article of Indo-USA DTAA. It is evident from the information received, which is reproduced in the assessment order passed for the assessment year 2009- 10, the certified public accountant of M/s ShoreChem LLC has stated that since M/s ShoreChem LLC did not provide any service to M/s Marisa International, no income has been received or accrued from M/s Marisa International. However, from the very same reply of the certified public accountant of M/s ShoreChem LLC it is evident that the owner of the said entity did not produce the email dated 6.3.2013. This is the email, the assessee claimed to have received from M/s Lindsay Logue the alleged owner of M/s ShoreChem LLC. It is further evident from the reply of the certified public accountant of M/s ShoreChem LLC that in 2005 and earlier, one of the Principal of M/s ShoreChem LLC introduced M/s Marisa International and its Principal for better business. He has stated that M/s ShoreChem LLC set up the meeting between the assessee and M/s CPP 4 & 4840/MUM/2016 (A.Ys: 2007-08 & 2008-09) Mrs. Ritu Sanjay Toshniwal International and other customers in USA for helping M/s Marisa International for understanding market and retailers needs. From the said information of certified public accountant it is also evident that the Principal of M/s ShoreChem LLC did offer help to the Principal of M/s Marisa International for its stationery business in USA. From the aforesaid facts it appears that there was some kind of dealing between the assessee (Proprietor of M/s Marisa International) and M/s ShoreChem LLC and its principal as well as M/s CPP International for export of paper products and stationery items to USA. Therefore, assessee’s claim that M/s ShoreChem LLC has acted as an agent cannot be discarded at the threshold without examining the evidences brought on record. In this context, the additional evidences produced by the assessee assumes importance. On perusal of the ledger copy, we have noticed that commission payment is duly reflected. Similarly, bank statement copies demonstrate remittance of money to M/s ShoreChem LLC and Lindsay Logue. Therefore, in our view, the additional evidences produced by the assessee before us will have a crucial bearing in deciding the issue relating to payment of commission. Therefore, we are inclined to admit the additional evidences submitted before us. However, since these evidences were not before the departmental authorities, to give a fair chance to the department to examine the evidences and verify the authenticity of assessee’s claim, we are inclined to restore the matter to the file of the AO for fresh adjudication. We make it clear, heavy burden is cast on the assessee to prove the genuineness of the commission payment with documentary evidences. AO is also required to verify the assessee’s claim in the context of evidences brought on record and decide the issue after proper inquiry. Needless to mention, AO must offer reasonable and fair opportunity of being heard to the assessee.

In the circumstances, we admit the additional evidences furnished by the assessee before us for the Assessment Years 2007-08 & 2008-09. We direct the Assessing Officer to examine the issue afresh in the light of 5 & 4840/MUM/2016 (A.Ys: 2007-08 & 2008-09) Mrs. Ritu Sanjay Toshniwal the observations of the Coordinate Bench for the Assessment Years 2009-10 & 2010-11 and decide the issue afresh in accordance with law. Needless to say to provide adequate opportunity of being heard to the assessee.

In the result, both the appeals of the assessee are allowed for statistical purpose.