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TMI Blog2015 (7) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, in our considered opinion, there is complete lack of enquiry on service tax aspect by the Assessing Officer. Commission payment aspect - Held that:- Assessing Officer has very much raised a query regarding services rendered by commission agents with documentary evidence. But in the reply of the assessee, he has furnished copy of agreement and copy of commission bills along with the details of provisions of commission on handling charges, TDS, date of payment of TDS etc. but there is no evidence furnished by the assessee before the Assessing Officer regarding services rendered by the commission agents. Hence, in our considered opinion, there is lack of application of mind by the Assessing Officer even after making query and therefore, in the facts of the present case, the exercise of the revisionary power by learned CIT u/s 263 appears to be proper. - Decided against assessee. - ITA No.345/LKW/2013 - - - Dated:- 24-7-2015 - Shri Sunil kumar Yadav and Shri A.K. Garodia, JJ. For the Petitioner : Shri P. K. Kapoor, C.A. For the Respondent : Shri Vivek Mishra, C.I.T., D. R. ORDER PER A. K. GARODIA, A.M. This is assessee s appeal directed against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he payments made by the appellant were not only covered by enforceable agreements entered into with the payees, but in pursuance of the said agreement valuable services had also been rendered by them which entitled the appellant to earn handling charges , and observation made by the CIT are wholly erroneous as being inconsistent with the material and information available on record, as listed in Para 6 of the Explanation dated 22.03.2013 (submitted during the course of revisionary proceedings. 8. BECAUSE merely on account of 'doubt' lurking in the mind of CIT, the admissibility of such payment could not have been disputed and the assessment order dated 30.12.2010 could not have been termed as erroneous and prejudicial to the interest of Revenue on this count. 9. BECAUSE even if the services rendered by the payees/ as listed by the appellant in Para 6 of its explanation dated 22nd March, 2013, are held to be in excess of the terms of the agreement it could not have been treated as disqualification, affecting the admissibility thereof. 10. BECAUSE in any case, the CIT having not disputed that (a) there existed agreements between the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that query was made regarding payment of commission by the assessee of ₹ 3,89,89,250/- and ₹ 19,32,266/- totaling ₹ 409.22 lac. He also pointed out that the reply submitted by the assessee before CIT on 22/03/2013 is available on pages 5 to 21 of the paper book. He also submitted that the reply submitted by the assessee before the Assessing Officer is available on pages 28 to 31 of the paper book. He placed reliance on the following judicial pronouncements: (i) CIT vs. Goyal Private Family Specific Trust [1998] 171 ITR 698 (All) (ii) CIT vs. Arvind Jewellers [2003] 259 ITR 502 (Guj) (iii) Allahabad Tribunal decision in the case of Greenland Motors vs. CIT in I.T.A. No.465/Alld/2012 dated 03/05/2013 (copy available on pages 165 to 187 of the paper book (iv) CIT vs. Vikas Ploymers [2012] 341 ITR 537 (Del) (v) CIT vs. Sunbeam Auto Ltd. [2011] 332 ITR 167 (Del) (vi) CIT vs. Ratlam Coal Ash Company [1988] 171 ITR 141 (MP) 5. As against this, Learned D.R. of the Revenue supported the order of learned CIT. 6. We have considered the rival submissions. We find that this is by now settled position of law that if there is lack of enquiry by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, the facts are different. In the present case, a clear finding is given by learned CIT that the order of the Assessing Officer is erroneous and prejudicial to the interest of Revenue. The first reason is that the assessee has shown receipt from 17 parties against the handling charges after excluding the element of service tax and assessee also debited the amount of service tax in the profit loss account and there is no query by the Assessing Officer on this aspect. We have also seen that in the query letter issued by the Assessing Officer, there is no query on this aspect and therefore, there is lack of enquiry. Regarding the second aspect regarding the services rendered against payment of commission, a clear finding is given by learned CIT that the assessee has been completely unable to produce any documentary evidence about any services rendered by these parties to whom commission was paid. We have also seen that although query was raised by the Assessing Officer asking the assessee to furnish evidence but in the reply submitted by the assessee before the Assessing Officer, apart from furnishing copy of agreement, no evidence has been furnished about rendering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the assessee by the CIT. The next basis of decision in this case is that there is no material to show that the order of Assessing Officer is prejudicial to the interest of Revenue but in the present case, CIT has brought material on record to show that when the receipts were accounted for after reducing service tax then the payment of service tax cannot be debited to profit loss account but the assessee has done so and it was allowed by the Assessing Officer and therefore, it is prejudicial to the interest of Revenue. On the second aspect also, this is finding of CIT that the assessee has not brought any evidence on record to establish rendering of service by commission agent and therefore, allowing deduction for commission payment is also prejudicial to the interest of Revenue. Because of these facts, this judgment is also not rendering any help to the assessee. 7.5 The next judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Delhi High Court rendered in the case of Sunbeam Auto Ltd. (supra). In this case, it was held by Hon'ble High Court that the opinion of the Assessing Officer in treating the expenditure as Revenue expenditure is plausib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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