TaxTMI 
TaxTMI 
2013 (9) TMI 40
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.... proceedings before him, made enquiries from the concerned principle and the concerned principle had confirmed the fact that the discount has been granted to M/s. Gopal Sales Corporation through M/s. Surindra Enterprises. 4. That the learned Commissioner of Income-tax (Appeals)-III, Ludhiana, has not considered the fact that due affect has been given while passing the order by the Assessing Officer as per directions of the hon'ble Income-tax Appellate Tribunal by routing the transaction of discount of M/s. Gopal Sales Corporation through consignee agent M/s. Surindra Enterprises and which discount has been disclosed and stands assessed in the hands of M/s. Gopal Sales Corporation. 5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed of." In the course of the present appellate proceedings, the learned autho rised representative narrated that it is second innings of the case. The core issue pertains to allowance of discount of Rs. 7,15,772, passed on to M/s. Gopal Sales Corporation. In the course of assessment proceedings, a confirmation from M/s. United Ink and Varnish P. Ltd., Mumbai was sub....
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.... had submitted during the course of original assessment proceedings that this practice had been carried on since long and such payments earlier made by the appellant to M/s. Gopal Sales Corporation had been allowed as expenses in the hands of the appel lant and also the same has been disclosed by M/s. Gopal Sales Cor poration as income in his return of income and assessed under section 143(3) of the Income-tax Act, 1961. 5. During original assessment proceedings, the Assessing Officer has made the addition on account of commission and discount paid by the appellant to M/s. Gopal Sales Corporation and the Commis sioner of Income-tax (Appeals) had allowed the relief to the assessee, since according to him, the payment of commission and discount was necessitated by the dictates of the business requirement and, thus, had allowed the appeal of the assessee. 6. The matter was carried to the Income-tax Appellate Tribunal and the Income-tax Appellate Tribunal regarding one percent commis sion had allowed the relief to the assessee and as regards the pay ment of discount, the following finding had been given by the Income-tax Appellate Tribunal in paragraph 8 of the order ....
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....ssing to the issue in hand and which fact is borne out from the order of the Assessing Officer and, thus, the adequate enquiries have been made to prove that the beneficiary of the receipt of the discount had been the Gopal Sales Corporation and this is independent concern, being assessed to tax and that discount earned had suffered tax in the hand of Gopal Sales Corporation and, therefore, once the Assessing Officer had applied the order of the Income-tax Appellate Tribunal, the Commissioner of Income-tax could not exercise the jurisdiction under section 263 of the Act. 10. Reliance is being placed on the following judgments : Name of the case Relevant page Nos. (i) CIT v. R. K. Construction Co. [2009] 313 ITR 65 (Guj) 1-8 (ii) Amrik Singh v. Asst. CIT [2010] 36 DTR (Chd-Trib) 111 9-11 (iii) CIT (Addl.) v. Shipra Estate Ltd. [2010] 35 SOT 256 (Delhi) 12-16 (iv) Copy of the judgment in the case of Little Bee Impex v. Addl. CIT, Khanna vide ITA Nos. 36 and 37/CHD/2009 passed by the hon'ble Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh. 17-32 (v) Copy of the judgment in the case of Smt. Savita Goyal v....
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....Sales Corporation, the assessment cannot be said to be prejudicial to the interests of the Revenue and, therefore, on this account too, the order of the Com missioner of Income-tax deserves to be quashed." The learned Departmental representative placed reliance on the order of the Commissioner of Income-tax. We have carefully perused the rival submissions, facts of the case and relevant records. In this context, it is pertinent to reproduce the relevant part of the assessment order passed by the Assessing Officer, for the assessment year under reference. The assessment in this case was completed vide order under section 143(3) of the Income tax Act, 1961 dated March 31, 2004 at total income of Rs. 15,37,250 after making certain additions/disallowances. Aggrieved with this order, the assessee went in appeal before the Commissioner of Income-tax (Appeals)-I, Ludhiana. The learned Commissioner of Income tax (Appeals) vide order dated June 18, 2004 passed in appeal No. 6-rr/ Commissioner of Income-tax (Appeals)-I/2004-05 deleted all the additions except disallowance of Rs. 59,760 out of car maintenance, depreciation, loan interest and insurance and Rs. 23,970 out of telephone ....
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....tshell, the Assessing Officer had made due enquiry, verification independently and objectively applied his mind to the issue in question and framed the assessment. The Commissioner of Income-tax invoked the provisions of section 263, merely on the ground of expression, i.e., "directly paid" used by the hon'ble Tribunal, while restoring the matter to the file of the Assessing Officer. In our considered opinion, the issue in question had led to invocation of provisions of section 263 by the Commissioner of Income-tax has been duly considered and adjudicated by the Assessing Officer. There is no assumption of incorrect application of law by the Assessing Officer in the matter. The Assessing Officer had made requisite enquiry and applied his mind, before recording the findings in the said assessment order in the matter in question. Therefore, having regard to the legislative intent, contained in the provisions of section 263 of the Act and plethora of judicial verdicts in the matter, we are of the considered opinion that this is not a fit case for invocation of the provisions of section 263 of the Act. Therefore, the Commissioner of Income-tax acted beyond his jurisdiction, as cont....