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TMI Blog2017 (1) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. 3. The learned CIT(A) has erred in disallowing the claim of depreciation amounting to Rs. 2,43,084 without appreciating the fact of the case in the right perspective." 3. Grounds raised by the Revenue are as under:- "1. On the facts and in circumstances of the case and in law, the CIT(A) erred in directing the AG. to restrict 25% of total commission/brokerage payment against 90% disallowed by the assessing officer as bogus claim of commission/unexplained expenditure u/s 69 of Income-Tax Act". 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing to A.O. restricting the disallowances upto 25% without cogent reason. He summarized that it would be proper in his opinion that commission/brokerage payment made by appellant should be restricted upto 25% only without any basis". 3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) allowed relief to the assessee, however he himself mentioned that it cannot be denied that the appellant has inflated commission/brokerage expenses (vide para-2.7 of the appellate order)". 4. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has igno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts were recorded from them. After examining the statements recorded from the concerned parties, the Assessing Officer observed, in case of Shri Sunil Rohra, though, the assessee is paying annual commission of less than Rs. 10,000, however, in the TDS certificate in Form no.16A, the amount of commission paid is mentioned at Rs. 2,00,990. Further, the concerned person is not actually working for the assessee company and has no idea about the basis of commission. Similarly, in respect of Ms. Anjali Navani, it was found that she has no idea about the work done, who files her return of income and what is her commission income. She also stated, she is a house wife and her name is being used. It was also found that Ms. Saanjhi Laxmi, to whom the assessee claimed to have paid commission, as per statement of her mother she is pursuing her graduation in U.S.A. for the last one year. As far as commission received by Ms. Nitu Lakshmi, the Assessing Officer observed, she could not explain anything about her transaction with the assessee company and she had no idea about the money going and coming out of her account. As far as Ms. Shubha Laxmi Mishra, to whom the assessee claimed to have paid c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer, it was submitted, the assessee was never confronted the statements recorded from them nor was given opportunity to cross examine them. He submitted, the Assessing Officer in the course of assessment proceedings not even disclosed a single information about the enquiry conducted by him with the concerned party. Only after completion of assessment, the assessee could come to know from the assessment order the enquiry conducted by the Assessing Officer with the five persons. The learned Authorised Representative submitted, before the learned Commissioner (Appeals), though, a assessee has raised A specific ground challenging the action of the Assessing Officer in not allowing the assessee an opportunity of cross examining the parties, the learned Commissioner (Appeals) failed to adjudicate the ground. He, therefore, submitted, the addition made on the basis of statements recorded without confronting them to assessee or allowing opportunity to the assessee to cross examine is invalid. 8. Learned Departmental Representative on the other hand relying upon the observations of the Assessing Officer submitted to verify authenticity of assessee's claim, the Assessing Officer had issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed opportunity of cross examination. That being the case, there is clear violation of rules of natural justice as the assessee has been denied a fair opportunity of hearing by the Assessing Officer. Though, the assessee has raised a specific ground on this issue before the learned Commissioner (Appeals), he has failed to adjudicate the same. It is a fact on record that the Assessing Officer has not made any adverse comment in respect of any party other than the five parties examined by him. It is also evident, in respect of rest of the parties the Assessing Officer has not made any enquiry. Therefore, without making any enquiry in respect of other parties, it is totally unjustified on the part of the Assessing Officer to disallow 90% of the commission payment on the basis of enquiry conducted by him in respect of five persons to whom aggregate amount of commission paid is only Rs. 11,06,549. More so, when the Assessing Officer has allowed 10% of the commission paid thereby agreeing that some amount of commission paid by the assessee is genuine. However, on what basis, he has quantified such payment to 10% of the amount paid by the assessee is unknown. Under these circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, learned Authorised Representative relied upon the decision of the Tribunal, Mumbai Bench, in Edwise Consultants Pvt. Ltd. v/s DCIT, ITA no.5376/Mum./2011 and ITA no.594/Mum./2013. 14. Learned Departmental Representative relied upon the observation of the learned Commissioner (Appeals) and the Assessing Officer. 15. We have considered the submissions of the parties and perused the material available on record. As could be seen from the orders of the Departmental Authorities, only reason on which assessee's claim of depreciation was disallowed is, the motor car is registered in the name of one of the directors. However, undisputed facts are, the motor car was purchased with the funds of the assessee. It appears, as an "asset" in the books of account of the assessee. There is also no dispute that motor car is wholly and exclusively used for the business of the assessee. Therefore, merely because the motor car was registered in the name of one of the directors under the Motor Vehicles Act, it cannot be said that the assessee is not the owner of the vehicle. For the purpose of claiming deprecation under section 32 of the Act. The decision relied upon by the learned Authorised Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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