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TMI Blog2022 (5) TMI 1372X X X X Extracts X X X X X X X X Extracts X X X X ..... SH JAYANTBHAI, AM This appeal by the assessee is directed against the order of the ld. CIT(A)-2, Jaipur dated 30-07-2019 for the assessment year 2018-19. 2. The hearing of the appeal was concluded through video conference by both the parties in view of the prevailing situation of Covid-19 Pandemic. 3. The solitary ground raised by the assessee is as under:- Under the facts and circumstances of the case, the ld. CIT(A) has erred in confirming the disallowance of brokerage of Rs.8.90 lacs paid to various persons by considering them to be ingenuine. 3.1 Brief facts of the case are that the assessee derives income from trading of precious and semi-precious stones under the trade name of M/s. Bharat Exports. The assesee filed his return of income on 10-10-2012 declaring total income of Rs.4,38,190/-. The case of the assessee was selected for scrutiny under CASS system. The notice u/s 143(2) of the Act was served on the assessee on 03-09- 2013. The assessment proceedings were completed by the AO by passing an order u/s 143(3) of the Income Tax Act, 1961 dated 20-03-2015, determining total income at Rs.13,28,190/-. The total income was arrived at by the AO after disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO, which is mentioned in the assessment order. S.N. Name of Broker Amount of Brokerage Response to summon 1. Giniya Devi Bansal Rs.3,00,000 She through her authorized representative filed the following documents as an evidence for brokerage received. 1. Copy of Income Tax Return wherein the brokerage received was shown and ITR was accepted by the Department. 2. Copy of Bank Statement showing the amount of brokerage received by her. She could not personally attend the office of the AO due to medical reason and medical certificate to this effect was filed. 2. Munni Devi Bansal Rs.3,00,000 She through her authorized representative filed the following documents as an evidence for brokerage received. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). The ld. AR of the assessee further submitted that he has made full efforts to provide the desired details before the AO, however he made the disallowance only on the ground that the above mentioned lady brokers did not appear before him for examination. In the end of submission, the ld. AR of the assesse relied on following case laws praying that the AO did not find out any fault in the books of account of the assessee and the ITR of the respective lady brokers were accepted by the Department without any pinpointing of the details mentioned in their ITRs. 1. Hon ble Kolkata ITAT Bench in case of Tirmuala Seven Hills Pvt. Ltd. vs JCIT (ITA No.782/Kol/2016, a.y. 2011-12 Date of Pronouncemnt 22-11-2018) Facts of the case: The main grievance of the assessee in this appeal is against the Ld. CIT(A)'s action of confirming the disallowance of commission and annual maintenance expenses amounting to Rs.1,92,65,164/- and Rs.4,40,58,520/-made by the AO. Briefly stated the facts of the case are that the assessee is engaged in the business of sale providing maintenance services of imported telecommunication equipment. The assessee imports foreign telecom equipments from Japan, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the AO, it cannot be said that certificate u/s 197 was issued by the Department to bogus or non-existent entities. Instead it went on to establish the identity of the payees, and that they were regular income-tax assessees. We therefore note that the assessee had duly discharged its onus of substantiating the genuineness and business expediency behind the payments as well as the identity 85 creditworthiness of the payees. (Para 29) 2. Hon'ble Gujarat High Court in case of CIT v. M/s Nangalia Fabrics (P.) Ltd[2013] 40 taxmann.com 206 held that Whether where brokerage commission was paid through account payee cheques for sales canvassed by a party and also in consideration of collection recovered from purchaser, said commission payment could not be held to be bogus - Held, yes [Para 6] [In favour of assessee]. 3. Hon'ble High Court of Culcutta in case of CIT v. Inbuilt Merchant Pvt Ltd (ITAT No. 225/2013, G.A. No. 3825/2013, Date of order: 14.03.2014) held that The views expressed by the Assessing Officer are erroneous in law. The Assessing Officer has overlooked the importance of the books of accountsmaintained in the ordinary course of business. Reference in this re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mations supported by their affidavits. The Tribunal had in detailed discussion dealt with the confirmations given by those creditors and observed that there was no reason to doubt correctness of the cash credit amounts taken from the above named creditors. The matter, therefore, touched upon appreciation and evaluation of evidence and did not raise any question of law, much less any substantial of law so as to justify interference by the Court. 5. Hon'ble ITAT Culcutta Bench in case of Syntexa vs. ACIT [2000] 111 Taxman 47 wherein it was held that When the assessee had furnished the names and addresses and other relevant particulars like details of payments, bills, etc. So, the assessee had discharged the primary onus. Moreover, the payments were made through account payee cheques which were duly shown in the books of account. No defect was found in the books of account submitted by the assessee. On the brokers the assessee had no control and if they became hostile, then the assessee could not be punished. The Commissioner (Appeals) had in principle accepted the genuineness of the payment made to the brokers. The payment towards brokerage/ commission was made for renderi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 We have heard both the parties and perused the materials available on record. In this case, the AO made disallowance of Rs.8,90,000/- as per details mentioned hereunder:- 1. Smt. Giniya Devi Bansal Rs.3,00,000/- 2. Smt. Munni Devi Bansal Rs.3,00,000/- 3. Smt. Neha Bhandari Rs.2,90,000/- Total:- Rs.8,90,000/- It is also noted that the AO had mentioned in his assessment order that in absence of verification from the Brokers, such expenses are considered as in-genuine and brokerage paid is disallowed and added to the income of the assessee. In first appeal, the ld. CIT(A) has also confirmed the action of the AO giving following observation. On perusal of overall facts, it is seen that all 3 persons were not produced for verification. No documents was filed which proves that these persons work for the assessee and brought the business. There is no reflection in sale bill. We have noted from the paper Book II wherein the ld. AR of the assessee has f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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