AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (11) TMI 1329
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..../-. At the time of hearing, the Ground relating to the addition of Rs. 14,36,000/- pertaining to transportation overseas charges was not pressed by the Ld. Counsel for the assessee and hence the same is dismissed as not pressed. 3. The facts relating to the case are stated in brief. The assessee-company is engaged in the business of exporting tea dust. The assessee filed its return of income for the year under consideration belatedly, that too beyond the time allowed under the provisions of section 139(4) of the Act. Hence the Assessing Officer issued notice u/s. 148 of the Act and completed the assessment u/s. 143(3) r.w.s.147 of the Act by making additions discussed in the preceding paragraphs. The assessee challenged these additions before the Ld. CIT(A) but could not succeed. Hence, the assessee has filed this appeal before us. 4. The first issue relates to the disallowance of commission expenses of Rs.6,38,217/-. It was claimed before the assessing officer that the said commission amount was payable to a foreign national named Mr. Ahamed Taha and it was further claimed that he negotiated the business in the country of Iraq on behalf of the assessee. However, before the Asse....
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....edly, the assessee could furnish only a copy of the receipt signed by the foreign national, Shri Ahmed Taha. The Assessing Officer has pointed out that there were discrepancies not only with regard to the amount of commission and but also with regard to the period for which the commission was claimed to have been paid. In addition to the above, the assessee has furnished the details of cash withdrawn by it from a bank on 07-02-2004 to the tune of Rs.7,50,000/-. However, we notice that the commission was claimed to have been paid during the period from 30-05-2004 to 02-07-2004, i.e., approximately after 3.5 months after the date of withdrawal. Hence, the claim of withdrawal of Rs.7.50 lakhs for the purpose of payment of commission also, in our view, does not substantiate the claim of its payment. There should not be any dispute that the liability to pay commission expense could be substantiated by various types of evidences, such as Agreement entered between the parties containing clear terms and conditions, quantum of business procured by Mr. Ahamed Taha, the basis for calculation of commission amount, bills raised by Mr. Ahamed Taha etc. Admittedly, the assessee could not substant....
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....e sheet. In this regard, the Ld A.R invited our attention to the copies of bank accounts placed in pages 29 to 32 of the paper book filed before us. We notice that the bank account titled as "SBT- Packing credit" is showing a balance of Rs.70,85,624/- as on 31.3.2002 and another bank account titled as "State Bank of Travancore" is showing a balance of Rs.5,26,193.90 as on that date. The explanation of the Ld A.R that the assessee had clubbed the balances available in both the bank accounts for the purpose of disclosure in the Balance sheet, apparently, appears to be correct. However, the assessee has furnished this explanation for the first time before us and hence the said claim of the assessee requires verification at the end of the assessing officer. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the assessing officer with the direction to examine the explanation furnished by the assessee on this issue and take appropriate decision in accordance with the law, after affording necessary opportunity of being heard to the assessee. 9. The next issue relates to the addition of Rs. 14,50,000/-. The AO noticed that the assessee has r....
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....herefore, the addition of Rs.14,50,000/- is liable to be deleted. Reliance is placed on the following decisions:- (i) Control Touch Electronics (P) Ltd Vs. ACIT (2001) (77 ITD 522) (Pune) (ii) Asheesh Securities Ltd Vs. DCIT (297 ITR 322) (Delhi) (iii) Stellar Investments Vs. ITO (2001)(251 ITR 263)(SC) (iv) CIT Vs. Smt. P.K. Nurjahan (237 ITR 570 (SC) 11. However, the contentions made before Ld CIT(A) was not convincing to the first appellate authority and hence he confirmed the addition of Rs.14,50,000/- with the following observations:- "4.3 I have carefully considered the above submission. Though the appellant claimed that it has taken cash loan from Shri Prabhakaran, it could not file any evidence not even a confirmation from Shri Prabhakaran. In addition to this, Shri Prabhakaran in his statement u/s. 131 recorded before the Assessing Officer denied to have given such loan. When this was pointed out, the appellant could not come up with any other evidence and had no alternative but to accept the loan as hi....
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....of Rs.14.50 lakhs as its income during the course of assessment proceeding. 13. We have heard the rival contentions on this issue and carefully perused the record. We notice that the assessee company itself has offered the impugned cash credit of Rs.14.50 lakhs as its income after the statement given by Shri Prabhakaran, which means that the assessee company has accepted the statement given by Shri Prabhakaran. Hence, the plea raised about cross examination at the appellate stage is clearly an after though and lacks credence. Further, the assessee has failed to furnish any credible explanation which compelled it to offer the above said amount erroneously. Under these set of facts, in our view, the Ld CIT(A) was right in law in confirming the assessment of Rs.14.50 lakhs in the hands of the assessee. Even otherwise, the burden of proof with regard to the cash credits is placed upon the assessee. It is well settled proposition that the assessee is required to prove the three main ingredients in respect of the cash credit viz., the identity of the creditor, the credit worthiness of the creditor and the genuineness of the transaction. In the instant case, the creditor is the Managing ....
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....hat it paid the amount in cash to its agent named Mr. Ahmed Taha in India during his visit to Cochin. It was further submitted that the amount of Rs.6,38,217/- represented not only the commission amount, but also the expenses incurred by the assessee company during his stay in India. It may be noted that Mr. Ahmed Taha has acknowledged the receipt of commission amount to the tune of Rs.5,70,000/- only and it was in variance to the amount booked by the assessee. Hence, the assessee has attempted to explain the difference between the two figures by stating that the difference between the two amounts represents expenses incurred by the assessee company on the visit of Mr. Ahmed Taha. It is noticed that the assessee has furnished the copy of Hotel Bill in support of its contentions that Mr. Ahmed Taha visited Cochin. The assessee has also shown the withdrawals made from a bank account, though it was held in the quantum proceedings that the said withdrawal does not substantiate the fact of payment of commission. Thus, we notice that the assessee has taken pains to furnish all the evidences that were available with it to substantiate the claim of commission payment. However, in the asses....