TMI Blog2017 (1) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... ee’s claim of commission payment afresh. Disallowance of depreciation claimed on motor car - motor car is registered in the name of the director of the company - Held that:- Undisputed facts are, the motor car was purchased with the funds of the assessee. It appears, as an “asset” in the books of account of the assessee. There is also no dispute that motor car is wholly and exclusively used for the business of the assessee. Therefore, merely because the motor car was registered in the name of one of the directors under the Motor Vehicles Act, it cannot be said that the assessee is not the owner of the vehicle. For the purpose of claiming deprecation under section 32 of the Act. See Edwise Consultants Pvt. Ltd. v/s DCIT [2015 (12) TMI 297 - ITAT MUMBAI ] - ITA No. 4902/Mum./2014, ITA No. 4944/Mum./2014 - - - Dated:- 21-12-2016 - Shri Saktijit Dey, Judicial Member And Shri Ramit Kochar, Accountant Member Revenue by : Shri Saurabh Kumar Rao Assessee by : Shri Snehal Shah ORDER Per Saktijit Dey, J. M. These cross appeals are directed against the order dated 2nd May 2014, passed by the learned Commissioner (Appeals) 8, Mumbai, for assessment year 2010 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. As could be seen, grounds no.1 and 2 raised by the assessee corresponding to grounds raised by the Department are on the common issue of addition made by the Assessing Officer and sustained by the learned Commissioner (Appeals) on account of commission and brokerage payment. As these issues are common in both the appeals, they are taken up for adjudication herein after. 5. Brief facts are, the assessee a company is engaged in the business of distribution and trading in various types of wires and cables. For the assessment year under consideration, assessee filed its return of income on 29th September 2010 declaring total income of ₹ 60,70,809. In the course of assessment proceedings, the Assessing Officer noticing that the assessee had debited an amount of ₹ 77,13,856 to the Profit Loss account towards brokerage / commission called upon the assessee to furnish party wise details of brokerage / commission paid with confirmation. He also called upon the assessee to explain the reason for increase in commission and brokerage paid. In response, the assessee furnished the party wise details of brokerage / commission paid along with confirmation. It was also explai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ₹ 69,42,471 to the income of the assessee. Being aggrieved of such addition, assessee preferred appeal before the first appellate authority. 6. The learned Commissioner (Appeals), after considering the materials available on record and submissions of the assessee, though, agreed with the Assessing Officer that the assessee has inflated the expenditure on account of commission / brokerage to some extent, however, he did not agree on the quantum of disallowance made by the Assessing Officer. He observed, out of 37 parties to whom the assessee claimed to have paid commission / brokerage, the Assessing Officer has conducted enquiries in respect of five parties and as far as remaining parties are concerned, the Assessing Officer has not recorded any finding. He noted, the commission paid to these five parties enquired into by the Assessing Officer amounted to ₹ 11,06,549. Taking this into account, the learned Commissioner (Appeals) observed, disallowance made by the Assessing Officer is highly excessive. Accordingly, he restricted the disallowance to 25% of the total commission / brokerage payment made by the assessee which worked out to ₹ 19,28,464. Being aggriev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. Undisputed facts are, during the relevant previous year, assessee had paid commission amounting to ₹ 77,13,856 to 37 parties. It is evident from the assessment order itself in the course of assessment proceedings in response to query raised by the Assessing Officer, assessee not only furnished party wise details of brokerage / commission paid but also submitted confirmations from all the persons to whom commission was paid. Even, assessee explained reason for increase in commission payment which, according to the assessee, was due to almost three fold increase in the turnover of the assessee from the preceding assessment year. As it appears, the Assessing Officer chose to conduct enquiry on random basis selecting five parties to whom summons were issued under section 131 of the Act. As it appears, these summons were issued to the concerned parties at the fag end of the proceeding and these parties were examined and statements were recorded from them. On the basis of statements recorded from these five parties, the Assessing Officer concluded that the assessee has made bogus claim of commission payment and accordingly, disallowed 90% of the commission claimed to have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose statements he proposes to utilise against the assessee. Only after providing fair and reasonable opportunity to the assessee to have his say on such adverse material, the Assessing Officer shall proceed to decide the issue with proper reasoning after considering the submissions of the assessee. Thus, grounds no.1 and 2 are allowed for statistical purposes. In view of our above decision, grounds raised by the Department in its appeal have become infructuous, hence, dismissed. 10. In ground no.3, assessee has challenged the disallowance of depreciation claimed on motor car of ₹ 2,43,084. 11. Brief facts are, during the assessment proceedings, the Assessing Officer noticing that the assessee has claimed depreciation on purchase of motor car called for necessary details from the assessee. On examining the details furnished by the assessee, the Assessing Officer noticed that the motor car is registered in the name of the director of the company during the financial year 2009 10. The Assessing Officer observed, though, the motor car is purchased from the funds of the company, however, the company is not the legal owner of the vehicle as the vehicle stands registered in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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