TMI Blog2012 (7) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... ated:- 25-5-2012 - G. D. Agrawal And Rajpal Yadav, JJ. Revenue by : Vikas Suryavanshi, Sr.DR. Assessee by : Anil Chopra, CA. ORDER Per G. D. Agrawal, VP : ITA No.3580/Del/2010 :- The only ground raised in this appeal by the Revenue reads as under:- The ld.CIT(A) has erred in law and on facts in deleting the addition of ₹ 2942534/- made by AO on account of commission paid to Directors of the company ignoring the fact that it was not an allowable expenditure within the meaning of section 36(1)(ii) of the I.T.Act, 1961. 2. We have heard both the parties and perused the material placed before us. We find that this issue is squarely covered in favour of the assessee by the decision of ITAT in assessee s own case for AY 2004- 05 2005-06. In AY 2004-05 also, the Assessing Officer disallowed the commission paid to directors under Section 36(1)(ii) on the similar ground which was deleted by learned CIT(A) and the Department had filed the appeal before the ITAT. The ITAT, in ITA No.3473/Del/2007, upheld the order of the CIT(A) and held as under:- The revenue is in appeal before us against the order of Learned CIT(Appeals) dated 23.5.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was also contended that the directors are assessed to tax at maximum rate and commission received has been shown in their returns as taxable income. There is no reduction of tax liability either by the assessee or by the directors. 4. The learned CIT(Appeals) has gone through the contentions of the assessee and deleted the disallowance. 5. With the assistance of learned representatives, we have gone through the record carefully and found that in assessment year 2003-04, assessee has paid commission @ 3% of total sales to the directors. This commission was allowed to the assessee by the Assessing Officer in an assessments made under sec. 143(3) on 30th November, 2005. In this year, the turnover of assessee has increased and it has paid the commission on the same line. There is no change of circumstance which can persuade the Assessing Officer to disallow the claim of assessee. Therefore, after going through the order of the learned CIT(Appeals) on this issue, we do not see any good reason to interfere in the findings of the learned 1st Appellate Authority. This ground of appeal is rejected. 3. When the similar issue arose in AY 2005-06, the ITAT again following its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the order of learned CIT(A) should be sustained. 7. We have carefully considered the arguments of both the sides and perused the material placed before us. The assessment year under consideration is AY 2003-04 and notice under Section 148 was issued on 31st March, 2009. Thus, admittedly, the notice under Section 148 was issued after more than four years from the end of the relevant assessment year. It is also not in dispute that original assessment was completed under Section 143(3). Section 147 reads as under:- If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ang Lal (supra). However, we find that the issue before the Hon ble Apex Court was altogether different. In that case, there was a subsequent information came to the knowledge of the Department in which the Managing Director of the creditor company had accepted that company had not advanced any loan during the relevant period to the assessee. The assessment year before the Hon ble Apex Court was AY 1963-64 and the question was whether there was fresh information so as to empower the Assessing Officer to reopen the assessment under Section 147(a). The Hon ble Apex Court upheld the reopening on the ground that the subsequent information was definite, specific and reliable, therefore, notice for reassessment was valid. Section 147 has been amended with effect from 1.4.1989 and in the amended Section 147, there is no sub-section like Section 147(a) or 147(b). On the other hand, now there is a proviso to Section 147. We have already dealt with the proviso and have arrived at a finding that as per proviso to Section 147, reopening of assessment was not valid. We find that the Hon ble Jurisdictional High Court has considered this issue in the case of Haryana Acrylic Manufacturing Co. (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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