9911796707
TMI Blog2017 (1) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst CIT(A)'s Gandhinagar order dated 31.08.2015 in appeal no. CIT(A)/GNR/4/2009-10, affirming Assessing Officer's finding holding it as not to have performed any agency services to the former assessee thereby concluding it as a non genuine firm resulting in disallowance of expenses in the nature of salary of Rs. 40,500/-, travelling expenses of Rs. 32,315/- and advertisement expenses of Rs. 7,28,875/-; respectively, in proceedings u/s.143(3) r.w.s. 154 of the Income Tax Act, 1961; in short "the Act". 2. A combined perusal of all these appeals at the outset reveals that former assessee's three cases suffer from delay of 81 days. Latter assessee's appeal is stated to have been filed after delay of 12 days. Shri Devatia invites our attention to assessees' condonation petition filed in the respective appeals. He submits that the impugned assessment years are 1990-91 onwards making it very difficult for the assessee to compile all the relevant details within the stipulated time. He terms reasons of the delay in question as a case of extreme hardships in getting all the relevant information necessary for filing of the instant appeal. The Revenue fails to rebut the said solemn avermen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch Tona Tab Agencies was having the registered office, that infact the entire business affairs of M/s. Tona Tab Agencies were being conducted from the office situated in Nadiad for last so many years. From the statement recorded of one of the partners of M/s. Tona Tab Industries, Mr. Manoj R Gandhi it was seen that he did not know anything about the business affairs of his firm and he claimed to be a sleeping partner. The AO issued a letter to Shri. Indubhai M Patel, another partner of M/s. Tona Tab at his Nadiad address and requested him to explain the reasons for giving commission to M/s. Tona Tab Agencies who had infact not rendered any service to the appellant i.e M/s. Asha Industries. A statement of Shri. Indubhai M Patel was also recorded in which it was found that he was partner in his HUF capacity in the firm of M/s. Tona Tab Agencies and a partner in his individual capacity in the appellant firm. He stated that M/s. Tona Tab Agencies was looking after market on behalf of the appellant firm, and he accepted that entire work of M/s. Tona Tab Agencies was being conducted from Nadiad. He further stated that commission to M/s. Tona Tab Agencies was paid as it was looking after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as claimed Advertisement expenses of Rs. 2,65,313/-. On further, inquiry, it was found that major portion of the advertisement expenses was paid to painters and Artists situated at Nadiad (Painter Ramesh Rao, Samir Art etc.) The assessee has claimed Travelling expenditure of Rs. 46,488/-. Three entries on page-22, 206 and 339 of Rojmal were verified. What is mentioned is "Tript at Delhi and Amritsar" but the name of the person who has participated in Tour or trip and other details regarding the claim amounting to Rs. 1,360/- page No,22, Rs. 1,870/- (page No. 206) Rs. 2,230/-(page No.339) is not mentioned. The assessee has claimed salary payment of Rs. 56,700/-. According to the statement of Shri. Indubhai M Patel, the details regarding employees is as under- 1. Shri. Prafulbhai Patel working regarding Advertisement. 2. Shri. Natubhai A. Patel Accountant. 3. Shri. Shallesh. T. Patel- Sales, Advertisement. 4. Shri. Chandubhai C. Patel - Sales, Advertisement. It was further admitted that all these employees are working at Nadiad office. The assessee was requested to produce sales Bills, to verify whether orders are booked by Agents and whether the name of the Agent is me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses narrated hereinabove. Suffice to say, the tribunal has remitted this issue as well back to the Assessing Officer in ITA No.1975/Ahd/2000 for de novo assessment. The Assessing Officer observed in its consequential order dated 24.12.2007 the assessee failed to file any substantive evidence of having provided marketing services to M/s. Asha Industries. He refers to a copy of agreement between these two parties dated 15.02.1973 and 01.11.1973 regarding marketing services commission @15% later on modified to 10% on 23.10.1987. The Assessing Officer observed that the said agreements made it clear that the former assessee would not pay any commission on direct sales through VIP, local sales at Nadiad and export sales. He accordingly holds the latter assessee not to have rendered any marketing services which could be proved by way of sufficient cogent evidence. He thus completed assessment reiterating his earlier findings. 5. The latter assessee M/s. Tona Tab thereafter preferred appeal. The CIT(A) declines the same in the order under challenge as follows: "6. I have considered the facts of the case, assessment order and submission made by the appellant. The facts as discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a/ Shri Talati vide letter dated 13/3/2015 stated that cases were pending before the CIT(A)-4, Baroda and therefore, the present appeal could not be taken up for disposal. A fresh notice was issued to the appellant dated 7/8/2015 and in response to the same, AR of the appellant attended on 24/8/2015 and furnished copies of orders passed by the CIT(A)-4, Baroda for AYs 1990-91 1992-93 and 1992-93 and in ail the orders for the 3 years, CIT(A)-4, Baroda had confirmed the view of the AO that Asha Industries had not given commission to Tona Tab Agency (appellant) and thus the contention of the AO that the expenses claimed by the appellant which is disallowed by the AO are bogus and non-genuine. Further, it is also submitted by the AO that Asha Industries has not gone in further appeal against the order passed by the CIT(A)-4, Baroda which proves that the view of the AO has been accepted by M/s. Asha Industries. AR of the appellant was specifically asked about the fate of the order of the AO in the case of Asha Industries for AY 1993-94 at the appellate stage. The AR of the appellant has submitted that as such there is no information available with him with regard to the appeal filed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i character of the assessee firm. We would however like to mention that mere fact that the firm has been granted registration, does not bind the AO to assessee the alleged income from any source on substantive basis in the hands of the firm. However, as already pointed out, this issue has become irrelevant, in the light of no substantive assessment having been made of the income assessed by the AO on protective basis in the hands of the assessee. We accordingly confirm the conclusion of the CIT(A) that the income of the respondent firm is assessed on substantive basis. 7. Shri Divatia's case accordingly is that the said co-ordinate bench's order has attained finality. He thus pleads that the former assessee's commission disallowances in assessment year 1990-91 to 1992-93 is accordingly not sustainable. This argument fails to impress upon us as the ld. co-ordinate bench appears to have not been apprised of the correct factual position wherein the Assessing Officer had disallowed the above commission's payment in the very impugned assessment years in the reassessment in question framed in February 1996 i.e. much before the tribunal's order dated 19.11.2011. The above co-ordinate be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
