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A C I T - 19(3) Room No. 305, 3rd Floor Piramal Chambers, Parel Mumbai 400012 Vs. Shri Dev Nanik Wadhawani Flat No. 1B, Sanjana Apts. 66, Carter Road, Bandra (W) Mumbai 400050
July, 17th 2015
                           "D" Bench, Mumbai

                 Before Shri D. Manmohan, Vice President
                and Shri Sanjay Arora, Accountant Member

                          ITA No. 824/Mum/2014
                         (Assessment Year: 2009-10)

       A C I T - 19(3)               Shri Dev Nanik Wadhawani
       Room No. 305, 3rd Floor       Flat No. 1B, Sanjana Apts.
       Piramal Chambers, Parel       66, Carter Road, Bandra (W)
       Mumbai 400012                 Mumbai 400050
                           PAN - AAIPW0562D
                Appellant                     Respondent

                   Appellant by:     Shri Sanjeev Kashyap
                   Respondent by:    None

                   Date of Hearing:       16.07.2015
                   Date of Pronouncement: 16.07.2015


Per D. Manmohan, V.P.

     This is an appeal filed at the instance of the Revenue and it pertains to
A.Y. 2009-10.

2.    The only ground urged by the Revenue reads as under: -

     "(1) On the facts and in the circumstances of the case and in law, the
          learned CIT(A) erred in deleting the disallowance of
          Rs.13,48,260/- out of Credit Card payments holding that the
          same were made by third party whereas no evidence was
          produced before the Assessing Officer in support of such claim."

3.    Facts necessary for disposal of the appeal are stated in brief. Assessee
is engaged in the business of chain marketing. For the year under
consideration he declared total income of `28,74,908/- whereas the
assessment was completed by determining the total income at `55,69,770/-
which includes addition referable to Credit Card payments of `13,48,260/-.
Assessee maintained four Credit Cards. In respect of Deutsche Bank Card
assessee claimed to have made payment to the tune of `15,68,262/-
whereas as per the AIR information the sum works out to `29,16,522/-. The
                                       2                            ITA No. 824/
                                                              ITA No. 824/Mum/
                                                                   A C I T - 19(3)
differential amount of `13,48,360/- was sought to be added by the AO. In
response to the show cause notice the assessee submitted that some
payments were made by third parties. Evidence in the form of letter dated
22.12.2011 from Qnet Limited, Hongkong was filed stating that Mr. Dev
Nanik Wadhwani is an independent representative of its company and
during the period 01.04.2008 to 31.03.2009 he had made purchases on
behalf of his clients amounting to USD 29310 and the figure of `13,48,260/-
represents such payments. According to the AO the letter did not establish
that the payments in respect of these purchases are made by the "clients"
and, therefore, added the sum to the total income of the assessee.

4.    Aggrieved, assessee contended before the CIT(A) that the assessee
made purchases for his clients (third parties) through Credit Cards and the
clients in turn reimbursed directly to his Credit Card. Confirmation of
purchases made by the assessee were placed before the CIT(A). It was
submitted that the assessee was a commission agent for the direct
marketing company M/s. Qnet Limited, Hongkong and markets products of
the companies through chain network. In order to enlist the entrants to the
network, i.e. to persuade the clients to purchase the products of the
company assessee made payments through Credit Card initially so that the
purchaser can make the payment at a latter point of time, i.e. after the
product is received by the customer.

5.    The learned CIT(A) observed that the payments were made by the
appellant as part of his business operations, i.e. payments were made on
behalf of his clients through Credit Card while selling the goods of a foreign
company called M/s. Qnet Ltd., Hongkong to the Indian clients. Upon
delivery of the goods the customers had to make the payment. He also
observed that the foreign companies have confirmed that the appellant made
purchases on behalf of the clients using his Credit Card and thus the initial
onus was discharged by the assessee. If the AO had any doubt he could
have made cross verification from such clients regarding the payment made
by them. Since the AO simply proceeded to reject the evidence placed on
                                         3                               ITA No. 824/
                                                                   ITA No. 824/Mum/
                                                                        A C I T - 19(3)
record without any further enquiry, the learned CIT(A) arrived at a
conclusion that the addition made by the AO is not in accordance with law.

6.        Aggrieved, Revenue is in appeal before us. We have heard the learned
DR who solely relied upon the order passed by the AO. We have also
carefully gone through the record. There is no material on record to indicate
that the AO has made any effort to investigate the contentions of the
assessee. Admittedly, the assessee purchased goods through Credit Card on
behalf of the clients. The AO has not disputed this question and in fact the
claim of the assessee was supported by the confirmation letter issued by
M/s. Qnet Limited, Hongkong, who are the principals of the assessee. Under
these circumstances we are of the view that the onus, which was shifted
upon the Revenue, has not been discharged properly. We, therefore, affirm
the order of the learned CIT(A) and dismiss the appeal filed by the Revenue.

Order pronounced in the open court on 16th July, 2015.

                   Sd/-                                     Sd/-
              (Sanjay Arora)                          (D. Manmohan)
           Accountant Member                           Vice President

Mumbai, Dated: 16th July, 2015

Copy to:

     1.   The   Appellant
     2.   The   Respondent
     3.   The   CIT(A) ­ 29, Mumbai
     4.   The   CIT­ 19, Mumbai City
     5.   The   DR, "D" Bench, ITAT, Mumbai

                                                        By Order

//True Copy//
                                                     Assistant Registrar
                                             ITAT, Mumbai Benches, Mumbai
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