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Income Tax Appellate Tribunal, ‘A’ BENCH,
Before: Shri Waseem Ahmed & Shri S.S.Viswanethra Ravi
Per Shri S.S. Viswanethra Ravi :-
Both the appeals filed by the Revenue are directed against the separate orders of the Commissioner of Income Tax(Appeals)-VIII, Kolkata dated 06-02-2013 and 20-02-2013 for the assessment years 2003-04 and 2004-05 respectively.
In this appeal, the revenue has raised the following ground:- 1. That under the facts and circumstances of the case, the ld. CIT(Appeals)-VIII, Kolkata, has erred in law as well as in facts in & 1377/Kol/13 M/s. Jalan Infosystem P.Ltd 1
deleting the payment of Rs.55,92,150 as sales commission to M/s. Jawala Steel Pvt. Ltd.”
The only issue to be adjudicated in this appeal is as to whether the CIT-A justified in deleting an amount of Rs.55,92,150/- paid towards sales commission in the facts and circumstances of the case.
At the outset, we observed that the Assessee filed an additional evidence before the CIT-A in support of its claim. The CIT-A sought remand report from the AO. The AO examined such additional documents and made no adverse inference against such documents. The relevant portion of remand report is reproduced herein below:-
Since the appellant furnished some additional evidences in support of this issue of appeal which were not produced before the AO during the assessment proceedings, those were sent to the AO for his verification and comments. In response of the same, the AO has sent a remand report. the relevant portion of the remand report is reproduced below:- "On receiving your first letter my predecessor-in-office fixed the case for hearing and subsequently by me on my taking over this charge. In response Shri G.L. Saraogi, Adv. A/R of the assessee company appeared from time to time and produced evidences in support of his claim. The explanations and documentary evidences so produced were examined. On examination of the same it was observed that the assessee company has furnished some fresh evidences before your goodself which could not be produced before the A.O. before passing order u/s143(3) dated 14.12.2007. Since, there was no specific direction U/S 250(4) in the instant case, therefore, the inquires are restricted only to fresh evidence that were produced before your goodself and not before the A.O. Followings are the evidence which were examined. A.Y.2003-04 (i) Details of statements of booking, partywise and Monthwise, through M/sJawala Steels (P) Ltd. (ii) Deed of agreements with M/s. Jawala Steels (P) Ltd. (iii) Proof of speed post. (iv) Copy of letter sent to M/s. Jawala Steels (P) Ltd. (v) Copy of letter to the Addl CIT. Range-3/Kol, requesting to furnish certain documents.
& 1377/Kol/13 M/s. Jalan Infosystem P.Ltd 2
(vi) Copy of Ledger account of M/s. Jawala Steels (P) Ltd. in the books of the assessee. (vii) Bank statements as proof of payments of commission (viii) Confirmation from M/s. Jawala Steels (P) Ltd. During the A.Y. 2003-04 the assessee company claimed to have paid commission of Rs.55,92,150 to M/s. Jawala Steels(p) Ltd towards collecting order from various customers on behalf of the assessee company, resulting sale of 74562 pieces of Nokia sets M/s. Jawala Steels(P) Ltd has issued a debit note for the said agreement, ledger copy showing dates of payments through bank supported by bank statements, month and party wise booking of mobile sets were examined and no adverse interference could be made on these documents."
The CIT-A examined the remand report, where the AO verified the agreement, ledger copy showing dates of payments through bank supported by bank statements, month and party wise booking of mobile sets M/s. Jawala Steels(P) Ltd and made no adverse remarks. Accordingly deleted the addition made on account of sales commission paid at Rs. 55,92,150/-. The relevant portion of which is reproduced herein below:
After carefully considering the submission along with the supporting evidences furnished & case laws relied upon on behalf of the appellant, perusing the facts of the case including the impugned assessment order, contents of the Remand Report and other materials brought on record, it is held that the action of the AO in making the disallowance of the claim of sales commission paid at Rs. 55,92,150 to M/s. Jawala Steelst (p) Ltd by the appellant is not justified and hence the same cannot be sustained. Thus, the addition so made by the AO is hereby directed to be deleted and this ground of appeal is allowed. “
6. We find that under remand proceedings the AO examined the documents at S.L No. (i) to (viii) mentioned therein at page 7 of the order of CIT-A. Admittedly, the said documents were not before the AO at the time of hearing. We find that the AO did not make any adverse remark on such documents and in view of same, we dismiss the sole ground raised by the revenue in A.Y 2003-04. & 1377/Kol/13 M/s. Jalan Infosystem P.Ltd 3
The appeal of the revenue in is dismissed. A.Y 2004-05 of the Revenue)
In this appeal, the Revenue has raised the following ground:- 1. That under the facts and circumstances of the case, the ld. CIT(Appeals)-VIII, Kolkata, has erred in law as well as in facts in deleting the payment of Rs.63,98,815 as sales commission to M/s. Jawala Steel Pvt. Ltd., M/s. Goldayan Trading Pvt. Ltd and Shri Rajesh Kumar Jain”
The only issue to be adjudicated is as to whether the CIT-A justified in deleting an amount of Rs.63,98,815/- paid towards sales commission in the facts and circumstances of the case.
At the outset, we observed that the Assessee filed additional evidence before the CIT-A in support of its claim. The AO examined such additional documents and made no adverse inference against such documents. The relevant portion of remand report is reproduced herein below:-
Since the appellant furnished some additional evidences in support of this issue of appeal which were not produced before the AO during the assessment proceedings, those were sent to the AO for his verification and comments. In response of the same, the AO has sent a remand report. the relevant portion of the remand report is reproduced below:- "On receiving your first letter my predecessor-in-office fixed the case for hearing and subsequently by me on my taking over this charge. In response Shri G.L. Saraogi, Adv. A/R of the assessee company appeared from time to time and produced evidences in support of his claim. The explanations and documentary evidences so produced were examined. On examination of the same it was observed that the assessee company has furnished some fresh evidences before your goodself which could not be produced before the A.O. before passing order u/s143(3) dated 14.12.2007. Since, there was no specific direction u/s 250(4) in the instant case, therefore, the inquires are restricted only to fresh evidence that were produced before your goodself and not before the A.O. During A.Y : 2004-05, the assessee company paid commission to the following parties:- 1) M/s. Jawala Streets (P) Ltd Rs. 51,15,450 & 1377/Kol/13 M/s. Jalan Infosystem P.Ltd 4
2) M/s. Goldayan Trading (P) Ltd Rs.12,04,165 3) Sri Rajesh Kumar Jain Rs. 79,200 ------------------- Rs.63,98,815 ------------------ Copies of bills, copies of agreement/appointment letter, ledger copies, details of month wise books of mobile sets were produced for all the three parties and they were examined and no adverse interference could be made on these documents. Tax has been deducted on the commission so paid by the assessee company.”
The CIT-A examined the remand report, where the AO verified the agreement/appointment letter, ledger copy, details of month wise books of mobile sets of all the three parties and made no adverse remarks. Accordingly deleted the addition made on account of sales commission paid at Rs.63,98,815. The relevant portion of which is reproduced herein below:
After carefully considering the submission along with the supporting evidences furnished & case laws relied upon on behalf of the appellant, perusing the facts of the case including the impugned assessment order, contents of the Remand Report & rejoinder to remand report furnished by the appellant and other materials brought on record, it is held that the action of the AO in making the disallowance of the claim of sales commission amounting to Rs.63,98,815/- paid to M/s. Jawala Steels(p) Ltd, M/s. Goldayan Trading (P) Ltd and Sri Rajesh Kumar Jain by the appellant is not justified and hence the same cannot be sustained. Thus, the addition so made by the AO is hereby directed to be deleted and this ground of appeal is allowed. “
12. We find that under remand proceedings the AO examined the documents available/recorded at page 7 of the order of CIT-A. Admittedly, the said documents were not before the AO at the time of hearing. We find that the AO did not make any adverse remark on such documents and in view of same, we dismiss the sole ground raised by the Revenue in for the A.Y 2004-05. ITA Nos.1376 & 1377/Kol/13 M/s. Jalan Infosystem P.Ltd 5
In the result, both the appeals filed by the Revenue are dismissed.
Order Pronounced in the Open Court on 21st September,2016.