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TMI Blog2012 (10) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... in not directing the AO to issue summons to M/s. Radhika Synthetics who were under the proceedings of the Debt Recovery Tribunal and to M/s. Spectrum synthetics Pvt Ltd., in whose case the court receiver had been appointed, for confirmation of the transations with them and for nature of services rendered by the broker 'Spectrum Synthetics Pvt Ltd. 3. That the Hon'ble CIT(A) has erred in law and facts of the case in not appreciating that the facts of the case that there is no special relationship exists between the appellant company and M/s. Radhika Synthetics Pvt Ltd., and hence the payment of commission to Spectrum Synthetics Pvt Ltd. for dealings with M/s. Radhika Synthetics Pvt Ltd., being genuine, additions of the same should have been deleted. 4. That the Hon'ble CIT(A) has erred in law and facts of the case in not directing the ld AO to disallow only the amount of Air tickets expenditure incurred on the air ticket of wife of the executive who accompanied him and which ITAT has already set aside vide its order dated 25.4.2006. "5) That the Ho'bie CIT (Appeals) should have directed the Learned Assessing Officer to pass an appropriate Order giving effect to the Order of Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttached by the Hon'ble High Court of Bombay and as the directors of the said company are absconding, assessee required time for furnishing the required explanation. AO stated that later on assessee furnished an explanation claiming that the said company had introduced it to trading in fabrics which is a new line of business to the assessee and that commission had been paid at 2% in addition to brokerage of 5%, which is a common trade practice. AO did not accept the said explanation of the assessee and claims were disallowed. Assessee filed appeal before ld CIT(A). ld CIT(A) confirmed the action of AO for the reasons stated by ITAT in its earlier order dated 25.4.2006 in I.T.A. No.141/M/2002 in para 3 in appeal filed by assessee as under: "3. CIT(A) confirmed AO's action for the reasons that : (i) payment had been claimed not only on sales but also on purchases, which is unusual.(ii) The commission had been claimed to have been made for purchases and sales only from the sister concern, M/s. Radhika Synthetics Ltd., for which commission paid is only a lame reason. (iii)Such commission was not paid to this party either in the earlier years or in the subsequent years but only in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered in the proper perspective by the lower authorities,. We are of the opinion that since these facts have a bearing on the rejection of assessee's claim, that it would be in the interest of justice that the matter should be set aside to the file of the AO to consider appellant's claim afresh in the light of the above. We are of the opinion that this fact being relevant to the issue, requires examination at the level of AO and hence, the affidavit filed by the AR only being in support of a fact being set aside for verification, DR's arguments regarding its validity are not relevant. Appellant is directed that it not having brought on record these facts earlier, that it is its responsibility to furnish the same before the AO in support of its claim without any failure on its part. With this view, this ground is set aside for fresh consideration by heA is treated as allowed only for statistical purposes" 7. Pursuant thereto, AO issued a letter dated 15.9.2008 requiring the assessee, inter alia, to furnish the following details: 1. Details and evidence showing profit earned of Rs. 45,61,005/- out of the transactions with M/s. Radhika Synthetics Ltd., which was introduced by M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uce evidence any regarding the nature of services rendered by Spectrum Synthetics Pvt. Ltd. along with confirmation from the said party together with the name, address, income-tax assessment particulars. Reference to earlier correspondences made and PAN detail of Radhika Synthetics is not relevant to the issue under consideration. Thus, the appellant has failed to comply with the directions of the Hón'ble ITAT and in such situation, there is no infirmity in the conclusion drawn by the AO which is upheld." 9. Hence, assessee is in further appeal before the Tribunal. 10. At the time of hearing, ld A.R. contended that M/s. Radhika Synthetics Ltd., as well as M/s. Spectrum Synthetics Pvt Ltd., who introduced Radhika Synthetics Ltd., to the assessee are not sister concern. He submitted that both the said companies have gone into liquidation and, therefore, assessee could not furnish requisite details. Ld A.R. referred pages 26 to 29 of PB to substantiate his submissions that said companies are not related to assessee company as directors are not common. In reply to a query as to whether ld AR could furnish any other evidence to prove the genuineness of the transactions and clai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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