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Income Tax Officer, Ward-33(2), Room No.1602, 16th Floor, Tower E-2, Dr. S.P. Mukherjee Civic Centre, J.L. Nehru Road, New Delhi-110002 Vs Inder Lal Mehta, B-1/591H, Janakpuri, New Delhi-110058
November, 03rd 2014
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

 
 
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