SRI DINESH KUMAR TAPARIA,KOLKATA vs. ITO, WD-34(3), KOLKATA, KOLKATA

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ITA 1277/KOL/2016Status: DisposedITAT Kolkata25 January 2018AY 2010-20113 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since services were rendered and payment was made via account payee cheques after TDS, the CIT(A) could not substitute his judgment for the agreed commission rate in the MoU. The appeal was allowed.

What were the facts?

The assessee paid commission at 12% to M/s. Stacker & Devices for business generation. The Assessing Officer disallowed the entire commission, but the CIT(A) allowed 8%. The assessee appealed against the restricted disallowance.

What were the issues?

Whether the CIT(A) can fix the rate of commission when services are accepted and payment is duly made, overriding the agreed rate in the MoU.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy, Hon’ble]

Sri Dinesh Kumar Taparia.……...……….……………………………………………….…….……...Appellant C/o. International Engineering Agency 47, N.S. Road Kolkata – 700 001 [PAN : ABHT 3153 F] Income Tax Officer Ward-34(3), Kolkata…………………………..…………………..…. Respondent Aayakar Bhawan (Poorva) 8th Floor 110, Shanitpally Kolkata – 700 107 Appearances by: Shri Sunil Surana, Advocate, appeared on behalf of the assessee. Shri Sanjoy Mukherjee, Addl. CIT, DR appearing on behalf of the Revenue. Date of concluding the hearing : December 28th, 2017 Date of pronouncing the order : January 25th, 2018

O R D E R Per J. Sudhakar Reddy :-

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-10, Kolkata, (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 19/02/2016, for the Assessment Year 2010-11, on the following effective grounds:- “For that the Ld. CIT(A) erred in restricting the disallowance of commission payments to 8% as against the entire commission payments @ 12% disallowed by the AO when the services rendered have been accepted and the party to whom the commission was paid was not related.”

2 Assessment Year: 2013-14 Ram Bilas Agarwal 2. The assessee claimed to have paid commission to M/s. Stacker & Devices for helping it to generate business with M/s. Hindalco. The commission was paid @ 12 per cent. The Assessing Officer disallowed the entire commission.

2.1. On appeal, the ld. First Appellate Authority, upheld the claim of the assessee that M/s. Stacker & Devices have rendered services as commission agents. He directed that the commission @ 8 per cent should be allowed.

3.

Aggrieved the assessee is in appeal before us.

4.

When the fact that M/s. Stacker & Devices had rendered services to the assessee, is not in dispute before us and when the amount has been paid by account payee cheques, after due deduction of tax at source, it is not open for the ld. First Appellate Authority to fix the rate of commission that is liable for such services. The ld. CIT(A), cannot substitute his judgement to the rate mentions in the MoU entered between the parties. Hence, I allow this ground of the assessee and direct the Assessing Officer to allow the commission @ 8 per cent.

5.

In the result, appeal of the assessee allowed.

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