TUSHACO PUMPS P. LTD,MUMBAI vs. DCIT 2(3), MUMBAI

O R D E R

PER AMARJIT SINGH, JM:

1. On the facts, in circumstances of the case and in law, the learned Commissioner of Income Tax – Appeals erred in confirming disallowance of commission expenses amounting to Rs.1,47,45,000/- mad by D.CIT.”

3. The brief facts of the case are that the assessee filed his e-return on 10.09.2008 declaring total income to the tune of Rs.9,66,67,146/- under the normal provisions of the of the Income Tax Act, 1961 ( in short “the Act”) and book profits of Rs.8,45,53,093/-. The same was processed u/s.143(1) of the Act on 27.02.2010. The case was selected for scrutiny under compulsory selection. Notice u/s.143(2) of the Act was issued on 28.08.2009 and duly served upon the assessee. Subsequently, notice u/s.142(1) of the Act was issued on 20.05.2010 which was duly served upon the assessee. Further, notice u/s.142(1) of the Act was issued on 24.06.2010 calling upon various details. The assessee company is engaged in the business of development, manufacturing, distribution, trading, service and support of pumping and fluid-handling system. The assessee has shown expenditure of Rs.1,47,45,000/- under the head of commission. On asking, the assessee furnished the details of commission to the agents interconnected with the National Thermal Power Corporation, Bharat Heavy Electricals, National Fertilizers, Powertech Corporation, Bharat Heavy Electricals, National Fertilizers, Powertech Corporation, National Dairy Development Corporation, Goa ITA No.1264/M/2012 A.Y. 2008-09 Shipyard, INS Gomati, Controller of Procurement, Gujarat State Energy Corporation and Vasantrao Dada Patil Sahakari. The Assessing Officer was of the view that no middle man was permitted for the transaction with Government organization and public sector, therefore, the said commission was not allowable hence added to the income of the assessee. Feeling aggrieved, the assessee filed the appeal before the CIT(A) who confirmed the said addition, therefore, the assesse has filed the present appeal before us. ISSUE NO.1:- 4. At the very out set the learned representative of the assessee has argued that the assessee wanted to adduce the additional evidence in support of his claim, therefore, the assessee should be allowed to produce the evidence before the Assessing Officer in the interest of justice. However the Ld representative of the Department supported the order passed by the CIT(A) in question. The issue raised by the assessee with regard to the allowance of claim of commission expences has been declined by the Assessing Officer and confirmed by the CIT(A). The assessee failed to produce the evidence before the authority below as at that time he was unable to procure the evidence. Now to substantiate his claim he the wanted to produce the confirmation received from Denetto International Nature of Service lies at page 47 of the paper book and Denetto Collecting Enquiry from BHEL lies at page 48 of the paper book and submission of offer to A.Y. 2008-09 BHEL with cc to Mr. Bhalla (Denetto) lies at page 49 to 50 of the paper book and submission of Price Bid to BHEL with cc to Mr. Bhalla (Denetto) lies at page 51 to 52 of the paper book and submission of documents to BHEL with cc to Mr. Bhalla (Denetto) lies at page 53 of the paper book. No doubt these documents were not produced before the Assessing Officer as well as before the CIT(A). Burt these documents seems relevant to decide the matter of controversy and to achieve the target of justice, therefore, in view of the said circumstances we allowed the additional evidence and direct the Assessing Officer to consider the claim of the assessee accordingly by giving an opportunity of being heard to the assessee in accordance with law. Accordingly, the finding of the CIT(A) on this issue has been ordered to be set aside and issue is directed to be restored to the file of Assessing Officer to decide the matter a fresh in view of the above said observations and in accordance with law.