TMI Blog2016 (6) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act would come into play only when the payment is from principal to agent - Decided in favour of assessee Addition u/s 68 - On question raised by AO about the payment of the incentive in the subsequent year, the assessee submitted that the documents was stolen from its office on 12.10.2011 and therefore the supporting evidences are not available for the purpose of verification - Held that:- AR has not brought anything before us at the time of hearing in support of his ground of appeal. No FIR was filed by the assessee for the stolen books of accounts. Accordingly, we find no infirmity in the order passed by the lower authorities. - Decided against assessee - ITA No. 847/Kol /2012 - - - Dated:- 15-6-2016 - Shri Waseem Ahmed, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Appellant : Shri Somnath Ghosh, Advocate For the Respondent : Shri Niloy Baran Som, JCIT-DR ORDER Per Waseem Ahmed, Accountant Member This appeal by the assessee is arising out of order of Commissioner of Income Tax (Appeals), Jalpaiguri dated 05.03.2012. Assessment was framed by ITO Ward-45(2), Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by assessee are clubbed together which state that Ld. CIT(A) erred in confirming the order of AO by sustaining the disallowance of the expenses claimed as incentive paid to retailers for ₹ 52,63,871/- on account of alleged infringement of the provisions of Sec. 194H r.w.s. 40(a)(ia) of the Act. The facts of the case are that assessee is a partnership firm and engaged in the distribution business of AIRCEL products of Dishnet Wireless Limited (for short DWL). The assessee for the year has filed income tax return declaring profit under the business head for ₹ 1,00,730/- only. The case was selected for scrutiny under section 143(3) of the Act through CASS system. During the year assessee has received a sum of ₹ 61,93,897/- from DWL towards incentive and service tax after the deduction of tax at source under section 194H of the Act. Against the above receipt the assessee claimed expenditure under the head incentive paid to retailer for an amount of ₹ 54,80,381/-. The Assessing Officer during the assessment proceedings observed that a sum of ₹ 52,63,871/- out of ₹ 54,80,381/- has been incurred without deducting the Tax at Source (TDS fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of it. (iv) The assessee has claimed the benefit of TDS in the books of accounts and in income tax returns, so it proves that the assessee is enjoying the incentive income. (v) The assessee failed to produce the copy of the agreements or prospectus or other documents about the scheme of the incentives. Being aggrieved by this order of Ld. CIT(A) assessee came in second appeal before us. 4. We have heard rival contentions and perused the materials available on record. Ld. AR submitted paper book which is running pages from 1 to 108 and submitted various case laws in favour of assessee s issue. The ld. AR stated that assessee has given trade discount to the retailers and as such no commission was paid to the retailers. The assessee has classified the incentive paid to the retailers as an expense by debiting same in profit and loss account for the accounting purpose. In this connection, Ld.AR drew our attention at pages 33 to 41 of the paper book where sales ledger of assessee was placed which was reflecting the entries of the incentive in the category of journal entries. Similarly the details for the payment of incentive paid to retailers was placed on pages 49 to 51 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o sub-franchisees Assessing Officer treated trade discount s commission and disallowed same by applying section 40(a)(ia) on plea that assessee had not deducted tax at source under section 194H on trade discount Whether trade discount made available to sub-franchisees was a compensation by foregoing part of commission already subjected to tax at source by BSNL and it could not have suffered taxation under section 194H Held, yes Whether, therefore, disallowance under section 40(a)(ia) was unjustified Held, yes [para 4] Section 40(a)(ia), read with sections 194-I and 197A of the Income-tax Act, 1961 Business disallowance Interest, commission etc, paid to resident from which no tax was deducted at source rent Assessment year 2008-09 Assessee paid rent to land lady, which was below taxable limit, without deduction of tax at source under section 194-I It filed form No. 15G being given by land lady Assessing Officer having found that there were infirmity in Form No. 15G disallowed rent paid by applying section 40A(a)(ia) Whether since assessee had reasons for non-deduction of tax at source, disallowance under section 40(a)(ia) of rent paid was unjustified Held, y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the incentive in the subsequent year, the assessee submitted that the documents was stolen from its office on 12.10.2011 and therefore the supporting evidences are not available for the purpose of verification. In the absent of such documents, AO disallowed the same and added to the total income of assessee. 7. Aggrieved, assessee preferred an appeal before Ld. CIT(A) who confirming the action of AO by observing as under:- Regarding the disallowance of ₹ 2,11,770/- it may be sated that the ground taken by the assessee was not correct. The Ld. AO made the disallowance in absence of any evidence of disbursement of the same, not invoking the provisions u/s. 43B of the Act. As the assessee failed to produce any evidence in any form showing the disbursement, it is held that the AO has rightly disallowed the same. Both the disallowances made by the AO are, thus, confirmed. Being aggrieved by this order of Ld. CIT(A) assessee preferred second appeal before us. The AR 8. We have heard rival contentions and perused the materials available on record. At the outset, we observed that the ld. AR has not brought anything before us at the time of hearing in support of his g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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