AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 112
X X X X Extracts X X X X
X X X X Extracts X X X X
....circumstances of the case are that the assessee debited a sum of Rs. 4,99,06,789/- on account of commission to the profit and loss account. Out of the aforesaid sum of Rs. 1.15,12,259/- paid to M/s. Consolidated Construction Co. (Agencies) Pvt. Ltd. and a sum of Rs. 74,40,000/- paid to M/s. SPS Metal Cast &Alloys Ltd. were disallowed on the following grounds:- "a. The important condition to be satisfied in respect of commission transaction is rendering of service and such condition i.e. rendering of service is not established in this case. b. The parties to whom sale on behalf of the assessee is claimed to have been effected by M/s. Consolidated Construction Co. (Agencies) Pvt. Ltd. and M/s. SPS Metals Cast & Alloys Ltd are Government Undertakings who purchase the goods direct from the seller i.e. without any via media. c. In this instant case the role of any middle man in form of commission agent is not applicable; d. The mere payment and making TDS without rendering of service does not prove the genuineness of commission transaction. In the case the important question i.e. rendering of service is missing." The CIT(A) in concurring with the v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ating the assessee that purchase order no.131/TD/06 dt. 19-1-01 issued by the Executive Director (Material), CESC Ltd. for supply of 1,00,000 nos. CM Meters @ Rs. 1,000/- is being enclosed together with the said purchase order dt.19/10/01 for Rs. 11,94,80,000/-. (iv) Letter of the agent dt. 03-08-02 to M/s.Siemens Metering Ltd. that they were taking up the matter with CESC Ltd. to carry out inspection of another lot of 6000 nos. meters. (v) Letter of M/s. CESC dt.24-3-03 to M/s.Siemens Metering Ltd. asking them to take necessary measure to adhere to change in meter specification and to obtain purchase order with reference to quotation MKTF063/CESC dtd. 27-12-02. (vi) Agents letter dt. 25-3-03 to the Vice-President-Marketing, Siemens Metering Ltd. stating that purchase order no.27/TD/06 dt.25-03-03 for supply of 40,000 nos. single phase type CM-143 Meters @ Rs. 900/- is being enclosed together with such purchase order for Rs. 4,30,12,800/-. (vii) Confirmation letter of sale dtd.27-03-03 of M/s.Siemens Metering Ltd. to M/s.CESC Ltd for the supply of 40,000 nos. of single phase meter valued at Rs. 3,60,00,000/-. (viii) Letters dtd.10-01-02 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....such the Principal Officer of M/s.SPS Metal Cast & Alloys Ltd. did not appear before the AO, even though summon was issued to the said party. The assessee thereafter was required by the AO to furnish evidence that the said party indeed rendered services to the assessee as per the agreement. The assessee has not brought any independent evidence to substantiate its claim that the said agent rendered services as required by the said agreement. The assessee also did not produce the Principal Officer of the agent company. In the above circumstances, we are of the considered opinion that the assessee has failed to show that indeed the said party rendered services as per the said agreement entered into with the assessee. In the above circumstances, we find no infirmity in the order of the ld.CIT(A) on this issue and uphold the disallowance of commission payment of Rs. 74,40,000/- to M/s.SPS Metal Cast & Alloys Ltd. Thus, ground no.1(b) taken by the assessee is rejected." Mr. Khaitan, learned senior advocate appearing for the assessee-appellant submitted that the question really is whether the view taken by the learned Tribunal is perverse. He submitted that the evidence which was in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....absolutely impossible, for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused, it is not obliged to prove them as part of its primary burden." Mr. Dudhoria, learned advocate appearing for the revenue submitted that the view taken by the learned Tribunal is not a view which was arrived at for the first time. That was the view taken by the assessing officer which was affirmed by the CIT(A) and which has also found approval of the learned Tribunal. He submitted that whether the agents were appointed and whether the agents rendered any service are essentially questions of fact. The questions of fact have been answered by all the three statutory authorities in the negative. The finding has now become final. He added that it is not the case of the assessee that any piece of evidence adduced by him has not been considered by them. He submitted that it cannot be said that the view taken by the assessing officer or the CIT(A) or the learned Tribunal is perverse. Therefore, the question even after it is reformulated, as suggested by Mr.Khaitan, has to be answered in the negative. The case of the assessee is that SPS Metal Cast & Allo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ddle man in form of commission agent is not applicable." Mr. Khaitan, submitted with some justification that the aforesaid impression is purely based on presumption, and not on the basis of any evidence. He added that Court can take judicial notice of the fact that CESC Limited is not a government undertaking. It is this incorrect impression, it was rightly contended, which has influenced the judgement of all the statutory authorities. They have also discarded the contents of the documents, which throw light on the services rendered by the agents appointed by the assessee on the ground that they are "merely correspondences between the assessee and the said agents." It is not in dispute, pursuant to notice issued by the Assessing Officer, both the agents confirmed in writing that they had rendered services to the assessee. The assessee has, before making payment, deducted tax at source. The Consolidated Construction Co. [Agencies] Pvt. Ltd. in its letter dated 15th February, 2006 addressed to the Assistant Commissioner of Income Tax has confirmed that they were appointed marketing agent of the assessee. They have also disclosed extract of their books of account in order to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l sale proceeds. If any State or Central Sales Tax (Or any other impost) is chargeable on the Sale of the products, you shall recover the same from the buyers or obtain the necessary Sales Tax declaration forms in our favour. In case you are unable to collect CST from, the difference of Sales Tax along with penalties and interest amount will be adjusted from your commission." The following terms amongst others appear to have been agreed to between the assessee and S.P.S. Metal Cast & Alloys Ltd. "You shall guarantee and be fully responsible to us all times for realisation of al sales proceeds and fulfilment of all contractual obligations by the buyers. This guarantee is the essence of the contract and your liabilities hereunder shall extend to all orders in respect of which you are entitled to claim commission. Our records shall be final and binding in this respect. If any State or Central Sales Tax (or any other impost) is chargeable on the sale of the products, you shall recover the same from the buyers or obtain the necessary valid sales tax declaration forms in our favour and keep us indemnified against all claims, demands and liabilities ....