MARVEL CONSUTLACY SERVICES,THANE vs. ADDL CIT RG 3, THANE

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ITA 2755/MUM/2014Status: DisposedITAT Mumbai06 November 2015AY 2008-094 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal directed the assessee to produce the concerned parties before the Assessing Officer to examine the genuineness of the payments and the work done. The assessee was to be given an opportunity to present evidence.

What were the facts?

The assessee claimed commission expenses of Rs. 44,58,000/-. The Assessing Officer disallowed this claim as the notices sent to the commission recipients were returned unserved and their whereabouts were unknown. The assessee argued that payments were made via cheque and TDS was deducted.

What were the issues?

The primary issue was the genuineness of commission payments made to parties whose whereabouts could not be established and who were not produced before the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “B”, MUMBAI

Before: Shri Joginder Singh, & Shri Rajesh Kumar

For Appellant: Shri Devendra Jain, Shri Vijay Kumar Soni
Hearing: 06/11/2015

Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 16/01/2014 of the ld. First Appellate Authority, Mumbai. The only ground raised in this appeal pertains to disallowance of commission of Rs.44,58,000/- with respect to 2 M/s Marvel Consultancy Services Nova Corporate Services Pvt. Ltd. (Rs.43,83,000/-_ and M/s Vardhman Jewellers (Rs.75,000/-).

2.

During hearing of this appeal, the ld. counsel for the assessee, Shri Devendra Jain, advanced his arguments which are identical to the ground raised by contending that M/s Nova Corporate Services Pvt. Ltd. acted as agent of the assessee in executing the projects for the last two years, however, due to shifting of address, the notices sent to the parties were returned back unanswered and further the assessee was in a position of obtain confirmation from said concern after completion of assessment proceedings. On the other hand, the ld. DR, Shri Vijay Kumar soni, strongly contradicted the claim of the assessee by contending that the claim of the assessee with respect to payment of commission is absolutely bogus and even the ware about of the parties were not known even to the assessee and further they were not produced before the Assessing Officer, consequently, genuineness of payment and services rendered by them could not be examined.

1.

2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is a partnership concern procuring and installing equipments in various industrial sectors like refinery, petrochemicals, fertilizers, power plants on commission basis, declared income of Rs.62,68,280/- in its electronically filed return on 29/09/2008 (Paper copy of the return was submitted on 08/10/2008), which was processed 3 M/s Marvel Consultancy Services 143(1) of the Act. Since, the case of the assessee was selected for scrutiny, consequently, required notices were issued to the assessee. The assessee attended and produced certain documents/details. The assessee shown to have received Rs.1,62,80,981/- out of which the amount of Rs.1.58 crores was claimed to be received on account of commission basis. The assessee also claimed expenses of Rs.71.39 lakhs on commission payments, therefore, the net profit was shown at Rs.64 lakhs. During assessment proceedings, the assessee was asked with respect to the commission paid to M/s Nova Corporation and also the other parties. The assessee claimed that all payments were paid through cheque and TDS was deducted. The Assessing Officer sent notices to these firms, which were returned back un-served. The assessee was asked to produce ware about of M/s Nova Corporation. As per the assessee, these parties could not be traced. Admittedly, onus is upon the assessee to prove the genuineness of the payment and mere deduction of TDS conclusively does not prove that payments were made for business purposes. The Bench asked a query with respect to confirmation letter dated 25/01/2011, with respect to M/s Nova Corporation Services Pvt. Ltd.. The ld. counsel explained that this letter was obtained after the completion of the assessment proceedings. It seems that the assessee was in touch with these parties even after completion of assessment but could not produce before Assessing Officer even repeatedly asked to do so. In view of this fact, we direct the assessee to produce the concerned parties before the 4 M/s Marvel Consultancy Services Assessing Officer so that the genuineness of the payment, work done by them can be examined. The assessee be given opportunity of being heard and further to produce evidence, if any, in support of its claim, thus, the appeal of the assessee is allowed for statistical purposes.

Finally, the appeal of the assessee is allowed for statistical purposes only.

This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 28/10/2015.

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