2023 (5) TMI 1055

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....he Act. 2. It is therefore prayed that addition made by the Assessing Officer and confirmed by CIT(A) may please be deleted. 3. Assessee craves leave to add, alter delete any ground(s) either before or in the course of hearing of the appeal." 3. The relevant material facts, as culled out from the material on record, are as follows. The assessee before us is a private limited company and engaged in the business of marine related services. In the instant case, the assessee filed return of income for assessment year 2013-14, declaring total income at Rs.21,48,920/-. The assessee`s case was selected for scrutiny under CASS. During the course of assessment proceedings, it was observed by the Assessing Officer that assessee had paid commission of Rs.2,34,91,839/- to M/s Sumeet Industry Ltd and M/s J & P Foils Ltd, being 45% of the total turnover. In order to verify the claim of commission made by the assessee, the Assessing Officer issued notices u/s 133(6) of the Act, to following eight parties, to whom assessee had provided marine related services: a. M/s Mophit Minerals P.Ltd. b. Sai Maritime & Management P. Ltd. c. Hazira Port P.Ltd. ....

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....nts and evidences viz: (i)confirmation from parties, (ii) Ledger account of parties, (iii) acknowledgement of return of income of both the parties to whom the commission was paid, and (iv) Transaction was through banking channel therefore genuineness of the transaction should not be doubted. 7. The Ld. Counsel has also argued that in response to notice issued by the Assessing Officer u/s 133(6) of the Act, all the parties replied to the Assessing Officer with documentary evidences, therefore genuineness of the parties should not be doubted. It was also argued that both the parties are the agent of the assessee and not the agent of the persons from whom the assessee received the revenue. The assessee has paid the commission after awarding the work order. In the work order, the scope of the work, the terms relating to remuneration and payment to remuneration have been mentioned. As per the work order the party was not only required to procure the work but also required to do follow up with concerned accounts department for early release of payments. 8. The Ld. Counsel has further argued that similar commission expenses were allowed by the assessing officer in the past assessmen....

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....h the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that in the course of assessment proceedings, assessee produced the confirmation, ledger account and acknowledgement of return of income of both the parties to whom the commission was paid. The assessee also filed the executed work order with both the parties. The transactions were through banking channel and appropriate TDS were deducted. These details and documents are furnished at page no. 11, 12, 49 to 62 of the assessee`s paper book. We note that Assessing Officer has not refuted or discredited these evidences and documents. The Assessing Officer does not mention why he is not accepting these evidences. On the contrary, the Assessing Officer has just brushed aside these evidences. It is a well settled law that when an assessee has all the possible evidence in support of its claim, they cannot be brushed aside based on surmises. Therefore, we note that based on these plethora documents and evidences, the genuineness and bona fide of the transa....

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....he same issue, involving identical facts unless and until a cogent case is made out by the Assessing Officer on the basis of change in facts. For that we rely on the order of the Hon'ble Supreme Court in Radhasoami Satsang vs. CIT 193 ITR 321 (SC), wherein it was held as follows: "We are aware of the fact that, strictly speaking, res judicata does not apply to income tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. On these reasoning, in the absence of any material change justifying the Revenue to take a different view of the matter - and, if there was no change, it was in support of the assessee - we do not think the question should have been reopened and contrary to what had been decided by the Commissioner of lncome-tax in the earlier proceedings, a different and contradictory stand should have bee....

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....ficer observed that only Sumeet Industries Ltd filed the reply in response to notice u/s 133(6). The other party Ms J & P Foil Ltd. might not have replied. It is to be noted that M/s J & P Foil Ltd. was assessed by the same Assessing Officer and so the Assessing Officer should have pursued the matter further. The Assessing Officer shifted the burden of producing the parties before him to the assessee. However, it was the duty of Assessing Officer to issue the summons to the parties so that they could appear before the Assessing Officer as the party, M/s J & P Foil Ltd was assessed by the same Assessing Officer. We also note that Assessing Officer collected the material behind the back of the assessee in respect of both these parties however, both the parties to whom the commission has been paid by the assessee were not produced by the Assessing Officer for cross examination. Even the parties to whom the services rendered by the assessee through agents and who have filed the reply in response to notice issued by Assessing Officer u/s 133(6) were not produced for cross examination. This specific plea was also raised before CIT(A), however, Ld. CIT(A) didn't make further inquiry. ....