SATISH KHIMJI GALA,MUMBAI vs. ITO 10(3)(4), MUMBAI

During the course of hearing it was submitted by the Ld. Counsel that ground no.1 was not pressed and therefore same is dismissed.

Ground No.2: In this ground, the assessee has challenged the action of lower authorities in disallowing export commissions paid to non-resident amounting to Rs.10,56,677/-. During the course of hearing, it was submitted by the Ld. Counsel that the assessee has been regularly making payment of export commission in preceding as well as subsequent years and the same has always been accepted. In this year, the disallowance was made of the same by the AO without giving proper opportunity to file requisite evidences. 4.1. Thus, additional evidences were filed before the Ld. CIT(A), but he refused to admit the same under rule 46A. He took us through the orders passed by the lower authorities to demonstrate that these orders have been passed in violation of principles of natural justice. 4.2. Per contra, Ld. DR fairly submitted that if counsel of the assessee undertakes to submit the require evidences and extend requisite cooperation to the AO, then this issue may be sent back to the file of the AO. 4.3. We have gone through the orders passed by the lower authorities. It is noted that export commission has been paid by the assessee. But it could not be substantiated by the assessee because the requisite evidences could not be 3 Satish Khimji gala furnished before the AO. Though the assessee made an attempt before the Ld. CIT(A) to substantiate the impugned expenses by filing additional evidences, but these were not admitted by the Ld. CIT(A) under Rule 46A. In our considered view, these evidences must be considered by the lower authorities before final decision is taken with regard to this issue. Therefore, we send this issue back to the file of the AO. The assessee is directed to furnish the requisite details and evidences and to extend requisite cooperation to the AO. The AO shall give adequate opportunity of hearing to the assessee, and shall decide this issue afresh after considering the entire material as may be placed by the assessee before the AO. This ground may be treated as allow for statistical purposes.

Ground Nos. 3 & 4 are with respect to disallowance of freight charges of Rs.69,790/- and excess disallowance of Rs.55748/-. 5.1. During the course of hearing it was jointly stated by that outcome of Ground no.2 would have bearing on ground nos.3 & 4, therefore these grounds are also sent back to the file of the AO with our directions as given above.

In the result, the appeal of the assessee is allowed for statistical purposes. Order was pronounced in the open court at the conclusion of the hearing.