AKSHOY CREATION,KOLKATA vs. A.C.I.T., RANGE-43, KOLKATA, KOLKATA

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ITA 2006/KOL/2014Status: DisposedITAT Kolkata05 April 2017AY 2009-20105 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had discharged its onus by providing sufficient documentary evidence, including TDS certificates, bank statements, commission bills, and ledger accounts. The transaction was through account payee cheques, proving the identity and genuineness of the transaction.

What were the facts?

The assessee, a wholesale dealer and manufacturer of sarees, paid commission to Smt. Hema Suraiya. The Assessing Officer (AO) treated the commission payment as a bogus claim and made an addition to the assessee's income. The CIT(A) confirmed the AO's addition.

What were the issues?

Whether the commission paid to Smt. Hema Suraiya was a bogus claim and whether the assessee provided sufficient evidence to prove the genuineness of the transaction.

Which sections of the Income-tax Act were involved?

Section 131,Section 143

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D”, BENCH KOLKATA

Before: SHRI S.S.VISWANETHRA RAVI, JM & DR. A.L.SAINI, AM

Hearing: 15/03/2017Pronounced: 05/04/2017

O R D E R

Per Dr. Arjun Lal Saini, AM

1.

The captioned appeal filed by the Assessee, pertaining to assessment year 2009-10, is directed against the order passed by the ld. Commissioner of Income Tax (Appeals)-XXX, Kolkata, in Appeal No.303/CIT(A)-XXX/R-43/2011-12, dated 18.08.2014, which in turn arises out of an order passed by the AO u/s.143 of the Income Tax Act 1961, (hereinafter referred to as the ‘Act’), dated 27.12.2011.

2.

Brief facts of the case qua the assessee are that the assessee is a whole sale dealer and manufacturers of fancy handloom and silk sarees. The assessee filed its return on 19.6.2009 declaring total income of Rs.9,67,500/-, which was selected for scrutiny and the AO completed the assessee after making various additions.

3.

Not being satisfied with the order passed by the AO, the assessee filed an appeal before the CIT(A), who has confirmed the addition made by the AO observing the followings :-

“4.2 Decision The A.O. appears to have wanted to examine Smt. Hema Suraiya, purported recipient of commission. In spite of Summon u/s.131, smt. Hema Suraiya did not personally report to the AO for examination but sent some written communication instead. The AO treated the transaction as bogus because the Appellant also failed to produce her before the AO. In the appeal stage, the Appellant has merely gone into technicalities as to how the AO was wrong in making the addition. It has shown no willingness to produce Smt. Hema Suraiya for examination to any authority of Income Tax. In my view, the Appellant seems to be relying only on papers purportedly from Smt. Hema Suraiya. The AO has pointed out some other missing links in the balance sheet and P/L account of Smt. Hema Suraiya in respect of commission transactions. I therefore do not see any reason to interfere with the decision of the AO and the assessment order is therefore confirmed. The ground is rejected.”

4.

Not being satisfied with the order of ld. CIT(A), the assessee is in further appeal before us and has taken the following grounds of appeal :-

I. a) For that the Id. Commissioner of Income Tax (Appeals) - XXX, Kolkata erred in confirming the decision of the A. O. in treating Rs.2,51,515/-, being Commission Paid to Smt. Hema Suraiya as Bogus Claim and concealment of income which is illegal, unjust, arbitrary and against principal of natural justice. b) For that the Id. A. O. neither did take any further steps to call Smt. Hema Suraiya in person nor did he send any Departmental Inspector to verify the existence of the said party but hurriedly rushed to complete the assessment which was getting time- barred on 31-12-2011 by passing an Order dated 27-12-2011 adding back the entire sum of Brokerage / Commission paid to Smt. Hema Suraiya at Rs.2,51,515/- and the said addition was confirmed by the Id. Commissioner of Income Tax (Appeals) - XXX, Kolkata which is unjustified and bad in law. II. For that the appellant craves leave to add, alter, amend, modify or delete all or any of the grounds of appeal at or before the time of hearing. the time of hearing the solitary grievance of the assessee has been confined to the issue that ld CIT(A) was wrong in treating Rs.2,51,515/-, being Commission Paid to Smt. Hema Suraiya as Bogus Claim and concealment of income.

5.1 Ld AR for the assessee has submitted before us that in response to notice u/s 142 (1) dtd.30-06-2011, the assessee furnished the details of the said Commission Paid at Rs. 2,51,515/- before the AO. The assessee submitted form No. 16A along with other required details and documents relating to A. Y. 2009 – 2010. Assessee also submitted photocopies of PAN Card, copies of commission bills, I.T. Acknowledgement copy, Computation of Total Income and final accounts of Smt. Hema Suraiya.

The ld AR pointed out that the appellant has duly discharged its onus to prove the genuineness and authenticity of its transactions with the said party Smt. Hema Suraiya by submitting all the relevant details and sufficient documentary evidences from time to time to establish the genuineness of transactions with Smt. Hema Suraiya. Further, the summons u/s 131 of the Income Tax Act, 1961 as issued by the Id. A. O. has been served on the said party Smt. Hema Suraiya at the given address and she responded the same, and the written communication filed by her proves that the said Smt. Hema Suraiya does exist at the given address. Therefore the AO completed the assessment based on his own presumptions, assumptions, conjectures and surmises which is in law and the said addition of Rs.2,51,515/- should be deleted in toto.

5.2. Ld. DR for the Revenue has also primarily relied on the findings of the AO which we have already noted in our earlier para and is not being repeated for the sake of brevity.

5.3. Having heard the rival submissions, perused the material available on records, we are of the view that there is a merit in the submissions of the assessee, as the proposition canvassed by the ld. AR for the assessee are supported by the facts narrated by him above. As the ld. AR for the assessee has pointed out that the assessee has produced TDS certificate. The assessee has also submitted bank statement suggesting payment to Hema Suraiya. The assessee also submitted the collection sheet of commission paid to Hema Suraiya. The assessee also submitted copy of ledger account of Hema Suraiya. The assessee also submitted Xerox copy of commission bills. Moreover, the transaction is through account payee cheque. In addition to this, the assessee also submitted copy of income tax return, PAN Card and other details. In all these details submitted by the assessee ld. AO did not find any mistake.

Therefore, based on these documents, identity and genuineness of the transaction has proved beyond doubt. Therefore, the addition made by the AO and confirmed by the ld. CIT(A) needs to be deleted. Accordingly, we delete the addition.

5.4. In the result, the appeal filed by the assessee is allowed.

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