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TMI Blog2022 (10) TMI 1207X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, for the commission expenses, the assessee furnished the details of both the parties. We find that out of four parties, three parties are located at distant places. CIT has not disputed the existence of the parties, nor the payment against the purchases or the commissions paid or the evidences filed by the assessee to substantiate the purchases or commissions paid is bogus. When commission was paid through account payee cheques on account of sales canvassed by the parties, was not bogus payment. Considering the legal view taken on commission payment and the expenses incurred on purchased and coupled with the facts that the assessing officer during the assessing made sufficient inquires and took a reasonable view on both the issue, so view taken/ adopted by the assessing officer cannot be considered as erroneous view. Once the assessing officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the assessing officer is unsustainable in law. Hence, the grounds of appeal raised by the assessee are allowed. - Shri Pawan Singh, Judicial Memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Pr.CIT issued show cause notice to the assessee. In the show cause notice, the ld. Pr.CIT recorded that after going through the assessment and order dated 27/10/2016, he found that the assessment order is erroneous and in so far as prejudicial to the interest of revenue and the assessee was asked to show cause as to why the order under Section 263 be not passed. In the show cause notice, the ld Pr CIT identified two issues; i.e. (i) the assessee has shown expenses on purchases form two parties and (ii) commissions payments to two persons. However, the information under section 133(6) i.e confirmation, bank account and return of income were called from such parties were not furnished. Non furnishing such information indicates that payments shown to them were not genuine. 3. The ld. Pr.CIT recorded that the assessee filed its reply dated 10/01/2019. The contents of reply are recorded in para 3 of his order. In the reply, the assessee in sum and substance submitted that the assessment was completed on 27/10/2016. During the assessment, the assessee furnished required details, as required by the Assessing officer. The assessee also furnished the details of purchases and commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e genuine and requested to not to make any addition. 4. The reply of assessee was not accepted by the ld. Pr.CIT. The ld. Pr.CIT held that though the assessee furnished some documentary evidence to show that the purchases made and the commission expenses incurred are genuine. The said purchases and commission expenses have not been confirmed by the parties from whom the purchases were made and the commission paid. Till date, all the four parties have not filed any reply or documentary evidence called for to verify the genuineness of purchases and commission expenses. Unless and until, it is confirmed by the parties by the documentary evidence by recording the transaction in their books of account the purchases and commission expenses claimed by assessee, cannot be treated as genuine. The Assessing Officer had passed the assessment order without making proper enquiries or verification which ought to have been made in this case. Accordingly, the assessment order was treated as erroneous and in so far as it is prejudicial to the interests of revenue and the ld. Pr.CIT set aside the assessment order to the Assessing Officer with direction to frame the assessment de novo after giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Guj) (iii) CIT-1, Mumbai Vs Nikunj Eximp Enterprises (P) Ltd. (2013) 35 taxmann.com 384 (Bom) (iv) CIT Vs Manish Enterprises (2015) 232 Taxman 0115 (Calcutta). 6. On the other hand, the ld. CIT-DR for the revenue has supported the order of ld. Pr. CIT. The ld. CIT-DR submits that the ld. Pr.CIT in para 4 of his finding has clearly held that the assessee has furnished some documentary evidence. However, the parties have not confirmed the transactions to whom commission were paid or from whom purchases were shown. The only confirmation of party can strengthen the genuineness of expenses. The ld. CIT-DR submits that in absence of confirmation of parties, the assessment order passed by Assessing Officer is not only erroneous but prejudicial to the interest of revenue. 7. In rejoinder submission, the ld. AR of the assessee submits that all complete details were furnished before the Assessing officer. The ld. AR submits that Indorama Industries Ltd. is based in Himachal Pradesh, M/s Abhisar Buildwell Pvt. Ltd. is based in Agartala and Shri S.K. Ojha is based in Ludhiana. The genuineness of payments of purchases made and commission expenses is not disputed by the ld. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ximp Enperprises (P) Limited (supra) held that merely the supplier had not appeared before assessing officer or Commissioner (Appeals), it could not be concluded that purchases were not made by assessee. In case of CIT Vs M.K. Brothers (supra), the Hon ble High Court held that Tribunal was justified in deleting the addition to the income of assessee on the ground that there was no evidence to show that the voucher given by those parties to assessee were bogus or that any part of those payment came back to the assessee. In CIT Vs Nangalia Fabrics (P) Ltd (supra), it was held by High Court that where the purchases were supported with bills, entries were made in the books of account and payments were made by way of cheques, the said purchases could not be held as bogus purchases. Further, when commission was paid through account payee cheques on account of sales canvassed by the parties, was not bogus payment. 11. Considering the aforesaid legal view taken by Jurisdictional High court on commission payment and the expenses incurred on purchased and coupled with the facts that the assessing officer during the assessing made sufficient inquires and took a reasonable view on both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Aryan Arcade Ltd., Vs PCIT (2019) 412 ITR 277 (Gujarat) held that merely because Commissioner held a different belief that would not permit him to take the order in revision, it if further held that when Assessing Officer made full enquiry, he made up his mind, the notice of revision is not valid. In CIT Vs Nirma Chemical Works (P) Ltd (2009) 309 ITR 67), the Hon ble High Court also held that when assessing officer after making due inquiries had adopted one of the view and granted partial relief, merely because Commissioner took a different view of the matter, it would not be sufficient to permit commissioner to exercise his powers under section 263. The Hon ble Court in para 22 of its order on the objection of the revenue that there is no discussion of the issue in the assessment order held that the contention on behalf of the revenue that the assessment order does not reflect any application of mind as to the eligibility or otherwise under section 80-I of the Act requires to be noted to be rejected. An assessment order cannot incorporate reasons for making/granting a claim of deduction. If it does so, an assessment order would cease to be an order and become an epic some. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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