TaxTMI 
TaxTMI 
2021 (9) TMI 953
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....not made any enquiry about the nature of China Tax whether the same is like TDS or Service Tax etc. Without specifying the nature of China Tax, AO has allowed same. 2. The assessee has also claimed Diwali Expenses of Rs. 5,29,500/-. On perusal of the same, it has been found that the assessee has purchased 150 wall clock @ 1000 per watch from M/s. Global Impex, and Executive dairy 200 pcs @ 320 per from M/s. Global Impex. The AO has not enquired about utilization of these items whether these were purchased for business purpose. 3. The assessee has claimed exhibition expenses of Rs. 3,41,250/-. These expenses relates to purchase of 1500 pcs of calendar @ 150 per pcs from M/s. Global Impex and 1000 pcs of notepad @ 100 per pcs from M/s. Global Impex. The AO has not enquired about utilization of huge quantity of these Items for business purpose. AO has also not verified the genuine of purchase. 4. The assessee has incurred the business promotion expenses of Rs. 1,02,980/- but AO has not enquired about nature of these expenses with bills and vouchers. 5. The assessee has paid commission to 6 persons. The AO has not made any enquiry about justification....
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....ly given by the assessee to the AO is reproduced as under: "Sub.: Assessment Proceedings u/s. 143(2) and 142(1) of the Income Tax Act, 1961. Respected Sir, With reference to your notice for the above captioned subject and in furtherance to our earlier submission, we hereby submit the following information and documents as under: 1. The assessee is a Limited Liability Partnership incorporated under LLP Act 2008. It is a Separate Legal Entity and is a Body Corporate. 2. It is a part of Shah TC Group. During the year assessee LLP started the business on commission basis as it was not achieving adequate Profits in its Trading Activities in Previous Years. 3. Note on Commission Income: 3.1 The Assessee LLP is engaged into providing services for procurement of API and Intermediates products for the manufacture of Pharma Medicine in India from China Manufacturers. 3.2. The Assessee LLP has its own clients over the years and also used various services of Agents from time to time who introduce the Indian Pharma Manufacturers Customers to Assessee LLP. 3.3. On the request of Agents as well as our Sale Team, requ....
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....7. 3.11 Thereafter the employees of Assessee LLP follow up for the payment of dues. The payment is received directly in Bank through banking channels i.e. Swift Transfer. Few Copies of Foreign Inward Remittance Certificate (FIRC) is enclosed as per Annexure 8. 4. Note on expenses incurred to earn Commission Income 4.1 The assessee LLP uses its manpower and also services of various outsiders to earn the commission income. 4.2. Major expenses incurred by the assessee LLP include Salary, Commission, Exhibition Expenses, Diwali expenses and China Tax. 4.3. Salary is paid to employees of the assessee LLP details of which along with ledger accounts and appointment letters has already been submitted vide our submission dated 15th September 2017. 4.4. Details of commission paid along with confirmations have already been submitted vide our submission dated 18th August 2017. TDS deducted from their payments reflected through TDS certificates have also been submitted vide our submission dated 20th November 2017. 4.5. Detail of exhibition expenses and Diwali expenses has also been submitted vide our submission dated 3(sic)8th Augus....
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.... your office as per para 4.4 above. 4.11.3. Vijayant Jain is a graduate having 10 years of experience having PAN as AANPJ3471H and is associated with shah TC group since FY 2009-10. Customers for relevant products provided by him were Hetero Labs Ltd., C J Shah & Co. and Kantilal Manilal & Co. Pvt. Ltd. He is not a party u/s. 40A2(b) of the assessee LLP. Related documents of commission to him has already been submitted to your office as per para 4.4 above. 4.11.4. Roopa Malhotra is a graduate having 7 years of experience having PAN as AHEPM4088P and is associated with shah TC group since FY 2010-11, Customers for relevant products provided by her were Ind Swift Laboratories Ltd., MSN Organics Pvt. Ltd., Sagar Rubber Products Pvt. Ltd. She is not a party u/s. 40A2(b) of the assessee LLP. Related documents of commission to her has already been submitted to your office as per para 4.4 above. 4.12. From the above discussions, it is amply clear that all expenses were incurred only for the business purposes and are allowable under relevant provisions including section 37 of the Income Tax Act, 1961." c. With regard to salaries- The same has been requis....
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.... can be rectified in a revision. Thus the Commissioner was to pass a fresh order under Section 283 after hearing the assesses [CIT vs. DLF Power Ltd., (2012) 345 ITR 448(Del.)]. 13.2 The Hon'ble Delhi High court in the case of CIT Vs. Shri Braham Dev Gupta in ITA No. 907/2017 and 1162/2017 has clearly decided that Pr. Commissioner of Income Tax can invoke the provision of section 263 of income Tax Act where AO has not made adequate enquiry and verification. In this matter, SLP of the assessee has also been dismissed by Hon'ble Apex Court. 13.3 Further, section 263 of the Act and amendment made in explanation 2 to section 263 states that "The Principal Commissioner or] Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the as....