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The Commissioner of Income Tax-II, Amritsar Versus M/s V.M. Reality Pvt. Ltd., Amritsar

2016 (7) TMI 531 - PUNJAB AND HARYANA HIGH COURT

Commission receipt - Enhancement of income - Held that:- Tribunal held that the addition of ₹ 70 lacs to the income of the assessee and the enhancement to the already assessed income of the assessee for having received commission to the tune of ₹ 8.60 lacs for the assessment year 2007-08 was not justified and resultantly, these additions were directed to be deleted. - On going through the record of the case, we are of the view that the decision of the Tribunal, which is impugned .....

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rerna, Advocate DEEPAK SIBAL, J. : Invoking the provision of Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as - the Act), the Revenue has preferred the instant appeal laying a challenge therein to the order dated 12.02.2014 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as - the Tribunal). The issue raised in the present appeal pertains to the assessment year 2007-08 and seeks to raise the following questions of .....

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ght out by the CIT (A) that the assessee himself had been declaring commission income on accrual basis. In order to appreciate the issue involved in this appeal, it is necessary to set out the relevant facts in brief. For the assessment year in question, the assessee had filed his return showing therein a carried forward loss of ₹ 17,68,144/-. Such return was processed under Section 143(1) of the Act. However, later on, during the course of proceedings, under Section 132-A of the Act, in t .....

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eived in cash. Resultantly, notice under Section 143-C of the Act was issued to the assessee, in response to which, a reply was filed. The books of accounts of the Company were compared with that of the assessee and the Assessing Officer, finding the afore-referred amount of ₹ 70 lacs to be unaccounted for, ordered addition of the same to the income of the assessee. The order to make such addition was taken up in appeal by the assessee before the Commissioner of Income Tax (Appeals), Amrit .....

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ssing of aforereferred order by the Commissioner, the assessee knocked the doors of the Tribunal, which, on the consideration of the entire record and arguments advanced before it on behalf of the contesting parties, came to a categoric conclusion that the agreement, on the basis of which the addition had been ordered to be made by the Assessing Officer to the income of the assessee, was half baked as it had admittedly not been signed by the Company and thus, could not be relied upon. It was fur .....

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of the Company and had been paid to the farmers and such receipt could, at the most, be treated as a capital receipt, but in no circumstance, the same could be added to the income of the assessee, especially when the same had already been added to the income of the Company. The Tribunal further noticed that the agreement, which had been recovered from the afore-referred Vipin Verma, between the Company and the assessee, was for a total amount of ₹ 5 crores, out of which, the Commissioner h .....

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