2001 (11) TMI 214 - AT - Income Tax

Summary

Issues Involved:
1. Sustaining the addition of Rs. 1,91,611 on account of commission paid to M/s. Prestige Enterprises.
2. Jurisdiction of the Tribunal to give directions or findings for assessment years other than the year under appeal.

Summary:

Issue 1: Sustaining the Addition of Rs. 1,91,611
- The assessee firm, engaged in the business of spare parts of textile machinery, debited Rs. 21,82,988 as sales commission to M/s. Prestige Enterprises for Assessment Year 1992-93.
- The CIT(A) sustained the disallowance of Rs. 1,91,611 on the grounds that debit notes for this amount were issued by Prestige Enterprises during the accounting year relevant to Assessment Year 1991-92 but were wrongly accounted for in Assessment Year 1992-93.
- The assessee argued that the commission was debited in Assessment Year 1992-93 due to settlement of disputes with the commission agent during that year. However, no evidence was provided to support this claim.
- The Tribunal upheld the CIT(A)'s decision, concluding that the commission did not fall for deduction in Assessment Year 1992-93 as the debit notes were received in the earlier assessment year.

Issue 2: Jurisdiction of the Tribunal
- The assessee's counsel argued that the Tribunal has the jurisdiction to direct the deduction of the commission in the earlier Assessment Year 1991-92 if not allowed for Assessment Year 1992-93.
- The revenue authorities contended that the Tribunal cannot give such directions for an assessment year not under appeal, citing section 254(1) and relevant case laws.
- The Tribunal clarified that its jurisdiction under section 254(1) allows it to pass orders necessary for the disposal of the appeal, which may include findings or directions for other assessment years if they are necessary for resolving the appeal.
- The Tribunal concluded that the commission of Rs. 1,91,611 is allowable for Assessment Year 1991-92, as the debit notes were received in that year and no evidence of disputes was provided for Assessment Year 1992-93.

Conclusion:
- The appeal for Assessment Year 1992-93 was disposed of with the finding that the commission of Rs. 1,91,611 is deductible for Assessment Year 1991-92 and not for Assessment Year 1992-93.