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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’: NEW DELHI
Before: SHRI S.V. MEHROTRA, & SHRI CHANDRA MOHAN GARG
PER CHANDRA MOHAN GARG, JUDICIAL MEMBER
This appeal filed by the assessee is directed against the order of the CIT(A), New Delhi, dated 24/06/2011 for A.Y 2008-09 passed in first appeal No. 36/2011-12 for AY. 2008-09.
Although the assessee has raised as many as four grounds in this appeal, but except the main effective ground No. 1, all the rest are supportive to the main ground which reads as follows:
“1. On the facts and in the circumstances of the case the CIT(A) has erred in treating the cancelled amount of bill as commission and disallowing the claim of deduction.”
3. We have heard the arguments of both the sides and have carefully perused the relevant material placed on record on the Tribunal inter alia assessment order and order of the CIT(A). The ld. AR submitted that the CIT(A) has erred in treating the cancelled amount of bill as commission and disallowing the claim of deduction.
The ld. AR also pointed out that the CIT(A) has erred in upholding the amount of Rs. 13,36,639/- as commission whereas this amount represented deduction of amount from receipts as per books of cancelled bill and statement of party was also shown. The ld. AR vehemently pointed out that neither the assessee received any amount nor he disbursed or paid to anyone but the CIT(A) proceeded to disallow the same u/s 40(a)(ia) of the Act which was also not the case of the AO. The ld. AR pointed out that the AO only noticed difference in receipt between the P & L account and the return but ignored the difference of the same amount between the expenses shown in the P & L account in the return which support the facts which was also explained before the CIT(A) that the impugned sum is nothing but reversal of the cancelled bill which was first credited to gross receipts at the time of raising by the bill and later debited on cancellation of corresponding advertisement job work.
Per contra, the ld. DR supported the order of the ld. CIT(A) and submitted that the assessee filed ledger account of M/s Hindustan Buildwell Pvt. Ltd wherein no such entry was reflected. The ld. DR vehemently pointed out that the assessee failed to demonstrate that he has raised the bill which later on was cancelled with the help of concerned party’s confirmation and the reasons for such cancellation alongwith primary documents. Hence, the impugned order may be upheld.
4. In rejoinder, the ld. AR submitted that the authorities below did not ask for confirmation or any other documentary evidence and thus the assessee was prevented to file the same in support of his case and explanation.
We have considered the arguments of both the sides and carefully perused the relevant material placed on record before us.
We find from the orders of the authorities below that the difference in expenses of same amount is shown in the P & L account and return.
However, the ld. CIT(A) upheld the addition on the allegations as submitted and argued by the ld. counsel of the Revenue that the assessee could not demonstrate cancellation of agreement and reasons of cancellation by supporting documents. The ld counsel for the assessee, during the arguments, agreed to the submission of the ld. counsel of the Revenue that the issue may be restored to the file
A.O for a fresh adjudication. We are of the considered opinion that the assessee was not provide due opportunity of being heard to explain his stand and, therefore, in that view of the matter, in the interest of justice, we deem it fit to restore the sole ground of appeal raised by the assessee to the file of the AO for fresh adjudication.
Needless to mention, that the AO shall provide due and proper opportunity of being heard to the assessee, without being prejudiced with the earlier order. Ground of appeal raised by the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee stands allowed for statistical purposes.
The order is pronounced in the open court on 27.07.2016.