TMI Blog2016 (9) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... made which was also disclosed by them. The other agent namely, SPS Metal Cast and Alloys Ltd. by its letter dated 22nd March, 2006 furnished to the Assistant Commissioner of Income Tax, a copy of the extract of the ledger from its books of account disclosing the dealings and transactions between the assessee and the aforesaid agent and the copies of their balance sheet for the relevant period together with their PAN card number. From the evidence disclosed by the assessee we are inclined to think that the assessee had adduced such proof as it was in its power to prove - Decided in favour of assessee. - ITA No. 236 of 2009 - - - Dated:- 22-7-2016 - Girish Chandra Gupta And Arindam Sinha, JJ. Mr.J.P.Khaitan, Sr.Advocate, Mr.Asim Choudhury, Mr.Siddharth Das, Advocates For Appellant Mr.P.Dudhoria,Advocate For Respondent ORDER The Court: The subject matter of challenge in the appeal is a judgment and order dated 17th April, 2009 passed by the learned Income Tax Appellate Tribunal, B Bench, Kolkata in ITA No. 159/Kol/07 pertaining to the assessment year 2003-04 by which the learned Tribunal dismissed the appeal preferred by the assessee. The assessee has on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 20th March 2006 and 27th March 2006. (iii) Agent s letter dtd.04-02-03 wherein collection of cheque no.222287 dtd. 3-2-03 for ₹ 2,07,71,920/- from M/s.NPDCL, Warangal was intimated to the assessee. (iv) Agent s letter dtd. 24.01.03 to the assessee regarding collection of cheque no.891155 dtd. 20-1-03 for ₹ 2,20,55,664/- from CPDCL, Hyderabad. (v) Agent s letter dtd. 30.09.02 regarding receipt of two cheques from the Superintending Engineer, Southern Power Distribution Co. of A.P.Ltd., Vijayawada for ₹ 37,83,091/- and ₹ 5,87,589/- respectively. (vi) Agent s letter dtd. 28-09-02 regarding receipt of cheque no.640574 dtd. 25.09.02 for ₹ 3,52, 44,403/- from EPDCL, Visakhapatnam. (vii) Agent s letters dtd. 20-09-02, 19-08-02, 29-06-02 and 19-6-02 regarding the intimation to the assessee that inspection for supply of certain meters were waived by the various authorities. 16. The assessee has relied on following documents to show that the agent rendered services to the assessee:- (i) Letter of M/s.VXL Landis Gyr Ltd. dtd. 05-04-2001 to the General Manager (Material), CESC Ltd. stating that M/s.SPS Metal Cast A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how that the agents indeed carried on the work as evidenced/envisaged in the agreement entered into by the assessee with the said agents. The Principal Officer of M/s. Consolidated Construction Co.(Agencies) Pvt Ltd. in his statement before the AO has clearly stated that the company has not made any correspondence with the parties for whom the said agent was appointed as marketing agent of the assessee. He has also stated that purchase orders were placed by the parties directly to the assessee. No evidence whatsoever has been brought on record to show that the agent rendered any services as envisaged in the agencies agreement dated 4-4-02. In the above circumstances, the case laws as relied on by the ld.AR for the assessee are not applicable in the present case. We hold that the assessee has failed to bring on record any evidence to show that M/s.Consolidated Construction Co.(Agencies) P.Ltd. indeed rendered any service as envisaged in the said agreement. Thus, we uphold the disallowance of commission payment of ₹ 1,15,12,259/- made to the said party. Thus, ground no.1(a) of the assessee is rejected. 18. As regards the agent, M/s. SPS Metal Cast Alloys Ltd., it is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to which Section 178-A does not apply, the burden of proving that the goods are smuggled goods, is on the Department. This is a fundamental rule relating to proof in all criminal or quasi criminal proceedings, where there is no statutory provision to the contrary. But, in appreciating its scope and the nature of the onus cast by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not required to prove its case with mathematical precision to a demonstrable degree; for, in all human affairs absolute certainty is a myth, and as Prof.Brett felicitously puts it all exactness is a fake . El Dorado of absolute proof being unattainable, the law accepts for it probability as a working substitute in this work-a-day world. The law does not require the prosecution to prove the impossible. All that it requires is the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. Thus, legal proof is not necessarily perfect proof; often it is nothing more than a prudent man s estimate as to the probabilities of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 3rd August, 2002 addressed by the agent to the assessee goes to show that the former was taking steps to have the goods inspected. The letters dated 25th October, 2002 and 27th February, 2003 go to show that the agent was also collecting dues of the assessee. The letters tabulated in paragraph 14 of the impugned judgement go to show that the agent Consolidated Construction Co. (Agencies) Pvt. Ltd. was taking steps for acceptance of the goods delivered by the assessee and was also collecting price of the goods sold by the assessee to the customers located in Andhra Pradesh. The learned Tribunal was of the opinion that:- The evidences on which reliance has been placed by the assessee are merely correspondences between the assessee and the said agents. No independent evidence has been filed to show that the agents indeed carried on the work as evidenced/envisaged in the agreement entered into by the assessee with the said agents. The documentary evidence, adduced by the assessee, discussed above could not have been dismissed by saying that they were mere correspondences. They were correspondences with respect to the various activities undertaken in discharge of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant period together with their PAN card number. From the evidence disclosed by the assessee we are inclined to think that the assessee had adduced such proof as it was in its power to prove. It is at this juncture that the judgement relied upon by Mr. Khaitan in the case of Collector of Customs, Madras and Others [supra] becomes relevant. It goes without saying that it was in the power of the revenue to have contradicted the evidence adduced by the assessee and its agents to the extent that the income earned by them on account of commission paid by the assessee was not offered for taxation or that the particulars of the final accounts or the final accounts themselves disclosed by the agents were not in accordance with the Returns of income which they may have filed. It is difficult to believe that it did not occur either to the Assessing Officer or to the CIT(A) that they could seek these information from their counterparts who may have been in seisin of the income tax files of the aforesaid two agents. Therefore, the only inference, which may be drawn, is that these facts were not contradicted because they were factually undeniable. Our attention was not drawn to any sug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t anyone to whom the agent sells the goods on credit will pay promptly for them. For this guaranty, the agent receives a higher commission for sales. The promise of such an agent is almost universally held not to be within the statute of frauds. For the aforesaid reasons, we are inclined to think that the view taken is plainly contrary to common sense and is a view, which no person of ordinary prudence properly instructed in law could have arrived at. The aforesaid view is, therefore, perverse. We are supported in our view by a judgement of the House of Lords in the case of Edwards Vs- Bairstow reported in 1955(3) ALL.E.L.R 48 wherein the following view was taken:- .it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the court must intervene. We are also supported in our view by a judgement of the Apex Court in the case of Omar Salay Mohamed Sait vs. C.I.T. Madras, reported in [1959] 37 ITR 151, wherein the following views were expressed:- We are aware that the Income-Tax Appellate Tribunal is a fact finding Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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