ITA No. 2929/Del/2013
Asstt.Year: 2008-09
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `C' NEW DELHI
BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT
AND
SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER
I.T.A.No. 2929/Del/2013
Assessment Year : 2008-09
Income Tax Officer, vs Inder Lal Mehta,
Ward-33(2), Room No.1602, B-1/591H,
16th Floor, Tower E-2, Janakpuri,
Dr. S.P. Mukherjee Civic Centre, New Delhi-110058
J.L. Nehru Road, (PAN: AABFD2095B)
New Delhi-110002
(Appellant) (Respondent)
Appellant by: Shri Satpal Singh, Sr.DR
Respondent by : Shri S.K. Arora
ORDER
PER CHANDRA MOHAN GARG, JUDICIAL MEMBER
This appeal has been preferred by the revenue against the order of
CIT(A)-XXVI, New Delhi dated 28.02.2013 in Appeal No. 308/2011-12 for
AY 2009-10.
2. The Revenue has raised following grounds in this appeal:-
"1. "The CIT(A) has erred in deleting the addition of
Rs. 24,18,900/- made by the A0 on account of payments
received from M/s Hitachi Singapore during the year
under consideration.
2. The CIT(A) has erred in not appreciating the fact
that the assessee offered this amount of Rs. 24,18,900/- in
Page 1 of 7
ITA No. 2929/Del/2013
Asstt.Year: 2008-09
return of AY 2011-12 after the AO made addition on this
account in AY 2009-10.
3. The CIT(A) has erred in admitting additional
evidences without providing opportunity to the AO under
Rule 46A of the IT Rules 1962.
4. The CIT(A) has erred in deleting the disallowance
of Rs. 10,72,000/- made by the AO on account of
commission expenses despite the fact that the assessee
could not substantiate the business expediency of the
same."
3. We have heard arguments of both the sides and carefully perused the
relevant material placed on record. Apropos ground no. 3, ld. DR submitted
that the CIT(A) accepted additional evidence without calling remand report
from the AO in contravention of Rule 46A of the Income Tax Rules, 1962.
4. The ld. Counsel for the assessee replied that no additional evidence was
submitted before the CIT(A). The ld. Counsel vehemently contended that the
copies of income tax return for AY 2010-11 and TDS certificates are part of the
record of the Income Tax Department which cannot be said as additional
evidence and there was no violation of Rule 46A of Income Tax Rules, 1962 by
ld. CIT(A).
5. On careful perusal of the order of the CIT(A), specially paras 8 and 11,
we note that the assessee filed copies of e-filing acknowledgement along with
Balance Sheet, P&L account, annexures thereto and copies of the TDS returns
before CIT(A) at the first time and these documents were not produced before
the AO during assessment proceedings. We also note that the CIT(A) admitted
Page 2 of 7
ITA No. 2929/Del/2013
Asstt.Year: 2008-09
and considered this documentary evidence while granting relief for the assessee.
At the same time, we observe that the acknowledgement of filing return and
TDS certificates are part of the record of the revenue department and until and
unless their genuineness is doubted by the revenue authorities, the same
document does not require any verification or examination at the end of AO.
Hence, we decline to hold that the CIT(A) admitted and considered additional
evidence in contravention to Rule 46A of the I.T. Rules, 1961. Hence, legal
ground no. 3 of the revenue is dismissed.
Ground No. 1 & 2
6. Apropos these grounds, ld. DR for the assessee submitted that the CIT(A)
has erred in deleting the addition of Rs.24,18,900 made by the AO on account
of payment received from M/s Hitachi Singapore during the financial year
under consideration. The DR further contended that the CIT(A) also erred in
not appreciating the fact that the assessee offered this amount in the return of
AY 2011-12 after the AO made addition non the count in AY 2009-10. The DR
finally supported the assessment order and submitted that the impugned order
may be set aside by restoring that of the AO.
7. Ld. Counsel for the assessee replied that the CIT(A) has granted relief for
the assessee on cogent and justified ground, hence the appeal is having no
substance. He has drawn our attention towards para 8 of the impugned order
Page 3 of 7
ITA No. 2929/Del/2013
Asstt.Year: 2008-09
and also submitted that when the assessee has offered this income for taxation
in AY 2010-11, therefore, action of the AO was not tenable.
8. On careful consideration of above and perusal of the operative part of the
order, we observe that the CIT(A) decided the issue in favour of the assessee
with following conclusion:-
`'I have considered the facts of the case, submissions of
the AR and the Assessing Officer's finding. As explained by the
AR, the appellant had received US$ 50,000 from M/s Hitachi
Singapore to meet the cost of site preparation and installation
of the said MRI machine at the premises of MLB Medical
College after its arrival. I find that the MRI machine was
although shipped by M/s. Hitachi from Japan on 28.2.2009, but
it received in India in the month of May 2009 i.e. in the next
financial year when the work of its installation started and it
was out of the advance amount of RS.24,18,900/-, the appellant
met the cost of installation and other expenses. The AR of the
appellant has filed before me copy of e-filing acknowledgment
number 381097640310312 dated 31.3.2012 along with copies
of balance sheet, profit & loss account and all annexures to
show that this amount of RS.24,18,900/- has duly been declared
as income of the appellant for the assessment year 2010-11. I
have perused these documents and find that the appellant has
offered this income for taxation in the assessment year 2010-11.
Therefore, considering all the facts and circumstances of the
case, I find that the impugned addition made by the Assessing
Officer was not justified. Accordingly, the addition of
Rs.24,18,900/- made by the Assessing Officer is deleted."
9. In view of above, we are inclined to hold that the CIT(A) was quite
justified in deleting the impugned addition as the assessee received disputed
amount in May 2009 i.e. in the next financial year related to AY 2010-11 when
the work of installation of MRI machine was started and the amount of addition
was an advance to meet the cost of installation and other expenses.
Page 4 of 7
ITA No. 2929/Del/2013
Asstt.Year: 2008-09
Subsequently, when the assessee had declared this amount as income in the
return of income filed for AY 2010-11, then it was not justified to sustain the
addition in the hands of assessee. The DR has not disputed the fact that the
amount was received in May 2009 and offered for taxation in AY 2010-11.
Under these circumstances, we are unable to see any valid reason to interfere
with the findings of the CIT(A), hence, ground no. 1 & 2 of the Revenue are
dismissed.
Ground No.4
10. Apropos ground no. 4, ld. DR submitted that the CIT(A) has erred in
deleting the disallowance of Rs.10,72,000 made by the AO on account of
commission expenses despite the fact that the assessee could not substantiate
the business expediency of the same. The DR contended that the impugned
order may be set aside by restoring that of the AO.
11. Ld. counsel for the assessee replied that the assessee earned commission
of Rs. 15 lakh from M/s Blue Star Ltd. On account of his services in
successfully obtaining the contract for supply of MRI machine by Ms/ Hitachi.
The assessee paid some commission to Dr. Rajesh Mehta, Mr. O.P. Malhotra
and Mrs. Annu Malhtora who provided their valuable services during the
process of securing order. Ld.Counsel vehemently contended that the payment
of commission was made by the assessee through cheques and after deduction of
Page 5 of 7
ITA No. 2929/Del/2013
Asstt.Year: 2008-09
TDS which was further deposited with the department, hence, the AO was
wrong in making the addition which was rightly deleted by the CIT(A).
12. On careful consideration of above, we observe that the CIT(A) granted
relief for the assessee with following conclusion:-
"I have considered the facts of the case and the
written submissions of the appellant. On perusal of details,
on record, I find that the appellant earned a commission of
RS.15 lakh from M/s. Blue Star Ltd. on account of his
services in successfully obtaining the contract for supply of
MRI machine by M/s. Hitachi. The appellant in turn paid
some commission to Dr. Rajesh Mehta, Mr. O.P. Malhotra
and Mrs. Annu Malhotra who provided a valuable
professional and technical in-puts. during the process of
securing the order. All the payments were made through
cheques and TDS was duly deducted and deposited by the
appellant on these commission payments. The appellant has
filed before me copies of the TDS returns in respect of
deduction and deposit of tax on commission payments.
Therefore, considering these facts, I see no justification for
the Assessing Officer to disallow these commission expenses.
Accordingly, the addition of Rs.10,72,000/- made by the
Assessing Officer is deleted."
13. In view of above, we are in agreement with the findings of the CIT(A)
because as per factual matrix of the case, the payment of commission was made
by the assessee under commercial expediency as it was not possible for the
assessee to secure order without technical support of the payee professionals.
We further note that all payments have been made through cheques after
deduction of TDS which was also deposited with the Department. Hence, we
are unable to see any perversity or ambiguity in the impugned order in this
Page 6 of 7
ITA No. 2929/Del/2013
Asstt.Year: 2008-09
regard and we uphold the same. Accordingly, ground no. 4 of the Revenue is
also dismissed.
14. In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 28.10.2014.
Sd/- Sd/-
(G.D. AGRAWAL) (CHANDRAMOHAN GARG)
VICE PRESIDENT JUDICIAL MEMBER
DT. 28th OCTOBER, 2014
`GS'
Copy forwarded to:-
1. Appellant
2. Respondent
3. C.I.T.(A)
4. C.I.T.
5. DR
By Order
Asstt.Registrar
Page 7 of 7
|