TaxTMI 
TaxTMI 
2018 (3) TMI 1153
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....32/- made on account of machinery hire charges in the facts and circumstances of the case. 2.1. The brief facts of this issue is that the assessee is a partnership firm engaged in the manufacturing of Ballasts / Choke and had filed its return of income for the Asst Year 2010-11 on 24.9.2010 disclosing total income of Rs. 1,33,14,980/-. During the course of assessment proceedings, the ld AO observed that the assesse had debited an amount of Rs. 39,24,876.53 under the head 'Machinery Hire Charges' in its profit and loss account. The ld AO issued a questionnaire u/s 142(1) of the Act dated 16.8.2012 asking the assessee to furnish the details in respect of the same. The assessee submitted the related documents and stated as under:- Payment to Philips Electronics India Ltd - Rs. 38,69,298.96 Payment to Amit Kr Ghose & Others - Rs. 55,577.57 The ld AO asked the assessee to produce the relevant bills and vouchers for the same. The assessee produced the same except one bill. The assessee was asked to show these payments in the bank statements which was not done by the assessee. Accordingly, the ld AO disallowed the same in the assessment. 2.2. Before the ld CITA,....
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....ould not have given relief for the remaining 10% of the expenditure. Hence the action of the ld AO need to be seen in a holistic manner in as much as he had disallowed only to the extent of bill and evidence not provided by the assessee in the sum of Rs. 3,51,932/-. In response to this, the ld AR vehemently supported the order of the ld CITA and stated that it is not known as to wherefrom the ld AO had taken the figure of Rs. 3,51,932/- to justify his conclusion that the assessee had not submitted the supporting documents in that regard. 2.4. We have heard the rival submissions and perused the materials available on record. The dispute arises only with regard to payment made to Philips Electronics India Ltd. We have gone through the contents of pages 122 to 124 of paper book containing the date wise details of machinery hire charges paid to Philips Electronics India Ltd together with bill details, PAN, gross amount, TDS details and TDS remittance details. We have also gone through the entire ledger account of Philips Electronics India Ltd for the period 1.4.2009 to 31.3.2010 enclosed in the paper book and we are not able to find the figure disallowed by the ld AO in the sum of R....
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....h commission if he or she had actually acted as a commission agent. The commission bill was raised at the fag end of the financial year although the purchases from the parties were made regularly from very beginning of the financial year. The ld AO conducted further inquiry in this regard by issuing summosn u/s 131 of the Act dated 22.2.2013 to the following parties :- a) Pramod Kumar Agarwal b) Director of Mittal Iron & Foundry Ltd c) Director of Tijiya Steels Pvt Ltd In response, Shri Pramod Kumar Agarwal appeared before the ld AO on 4.3.2013, Director of Mittal Iron & Foundry Ltd Mr Vijay Kumar Agarwal appeared on 6.3.2013 and authorized representative of Tijiya Steels Pvt Ltd Mr Amit Kumar Jaiswal appeared on 12.3.2013. During the course of proceedings u/s 131 of the Act, Shri Vijay Kumar Agarwal presented a bill according to which he earned commission from Khaitan Electronics in their purchase of items from the respective 12 parties. Mr Agarwal stated that he met few parties personally in their offices and contacted the rest of the parties over phone. The ld AO observed that Mr Agarwal was unable to provide the addresses or contact numbers of any ....
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....ry Ltd was instrumental in sourcing the purchases from these 12 parties to the assessee for which the assessee had paid commission to Mittal Iron & Foundry Ltd. In this regard, the ld CITA observed that Shri Vijay Kumar Agarwal, Director of Mittal Iron & Foundry Ltd, had stated that he had submitted the list of vendors who had supplied goods to assessee and also observed that the said company had also received commission income from M/s Sendoz. The ld CITA observed that Shri Vijay Kumar Agarwal had also made a mention in his statement regarding the names of some of the products like bobbins, connectors, varnish paint, plastic covers and igniters. The ld CITA observed that similar is the position in the statements recorded from other two commission agents. The ld CITA also observed that the commission payments were not made to any related parties so as to allege any connivance of the assessee with the said parties. The ld CITA in addition to placing reliance on various decisions, placed reliance on the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs Alfa Hydronics Pvt Ltd in ITA No. 549 of 2004 dated 10.11.2014 wherein it was held that when there was nothing ....
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....d we find that those parties are in receipt of commission from various persons other than assessee also. The ld CITA had stated that these commission agents are not related parties or family members of the assessee which facts remain uncontroverted by the revenue before us. Hence there is no reason to suspect these transactions. The three commission agents to whom summons were issued u/s 131 of the Act had appeared before the ld AO and had submitted necessary documents and clearly deposed that they had rendered services to the assessee for which commission was received from the assessee firm by them. The names and addresses of the vendors from whom the purchases were sourced to the assessee were also provided to the ld AO. Hence if at all, there is any doubt on the same, the ld AO could have verified the same with the concerned vendors to ascertain the veracity of the transactions. This is not the case that the assessee as well as the commission agents had not submitted any details so as to give one more opportunity to the revenue for making fresh enquiry. We also find that the net profit shown by the assessee during this year had increased substantially when compared to that in th....