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TMI Blog2017 (1) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... d Rs. 9,28,440/- for assessment year 2008-09, on account of non-deduction of TDS while making payment on account of commission. 4. Aggrieved from the order of AO, the assessee filed appeals before the ld. CIT(A), who has confirmed the addition made by the AO for both the assessment years observing the followings :- Ground No.1: By this combined ground, the assessee challenges the disallowance/addition of Rs. 71,587/-, Rs. 7,15,000/- and Rs. 10,70,926/- being difference in TDS amounts, fresh introduction of capital by one of the partner and commission payment respectively. The assessee has claimed that though M/s. Forbes Infotainment Ltd. issued commission payment of Rs. 14,96,531/-, the company had issued debit notes for Rs. 23,190/- & Rs. 48,397/- on 07.02.2007 & 10.01.07 totalling Rs. 71,587/- and accordingly the commission was less declared by the assessee. The assessee filed the debit notes during the appellate proceedings and these were also forwarded to the A.O. for comments. As the A.O. has also not objected to these facts, the addition of Rs. 71,587/- is deleted. The next addition is the addition of Rs. 7,15,000/- made on account of introduction of fresh capital by Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f proving the capacity of the creditor and the genuineness of the transactions. As regards the payment of commission of Rs. 10,30,926/-, the assessee had not made any submission before the A.O. However. during the appellate proceedings the assessee claimed for the first time that the commission was paid to staff of the assessee. The assessee has claimed that all the staff are engaged for the purpose of selling lotto machine to the retailers for and on belief of the firm/appellant and the firm/appellant earned commission from the company on the basis of sales activity. However, before the A.O., during the remand proceedings, the 'staff' who attended claimed that they distributed maximum amount of the received commission among the retailers and operators for the purpose of selling of lotto machines. But neither in the assessment proceedings, nor in the appellate proceeding and also not even during the remand proceedings the assessee or its 'staff gave any details of the sales effected partywise by each employee who had received the commission. Further they have not given any details of the parties to whom they supposedly passed over the commission to. The business of online ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86,440.00. Actually my staff Sri Narendra Nath Das was committed a mistake in typing while the actual head in profit & loss ale should be commission & salary paid of Rs. 9,28,440.00 in place of wrongly typing as commission paid of Rs. 9,28,440. 00. The said commission & salary paid is divided as commission paid Rs. 8,86,440.00 and salary paid Rs. 42,000/-. Therefore in my/our opinion the above explanation may be rectified and addressed as annexure of my audit report dated 19-09-2008" (emphasis supplied). 5. Not being satisfied with the order of CIT(A), the assessee is in further appeals ( for the above mentioned assessment years) before us and has taken the following grounds of appeal :- 1). For the fact and circumstances, the CIT (Appeals) failed to consider the remand report of the AO which he gathered from the enquiry made by him during the course of hearing. He confirmed the order of the AO on the ground of addition made by him for introduced capital of a partner amounting to Rs. 7,15,000/- which may be deleted. 2). For the fact and circumstances, the CIT Appeals failed to consider a sum of Rs. 10,36,926/- on account of non deduction of TDS from the commission payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and also the said bank account is not the business account, and thus, it cannot be said that as unexplained with the provision of section 68. Submission for ground No. 2 ,of ITA 30/Kol/2014 and ground No. 1 of ITA 31/Kol/2014) b).the Assessing Officer added a sum of Rs. 10,30,926/- on account of non-deduction of TDS while making the payment on account of Commission. The appellant submits before the CIT (A) that the said commission paid to his staff and thus it was not attracted section 40(a)(ia) of the Income Tax Act. In the remand report, the Assessing Officer observed that as the assessee failed to produced books of accounts, salary register etc. before the assessing officer during the course of hearing u/s 143(2), he made this addition. But, during the hearing under remand report, assessee produced all books of accounts, documents, salary register before the assessing officer in response to remand report sent by the CIT (A). Accordingly, the Assessing Officer sent notice u/s 131 to the said five staff of the assessee by post to their residential address for their personal appearance with documents. Four of the staff out of five staff appeared before the A.O. along with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " In this case, the CIT (A) ignored that as the assesse unable to produce books of accounts and documents before the Assessing Officer, he already denied the proper and positive opportunity of being heard. But while, the CIT (A) order remands report from the Assessing Officer after verify the books of accounts and documents in respect of the grounds of appeal of the appellant. After thoroughly verify the books of accounts and documents as well as personal appearance of the staff of the appellant in respect of notice u/s 131, the Assessing Officer made a remand report which was sent to the CIT (A) in due time. But, the CIT(A) ignoring the statute of the Income Tax Laws, disbelief the observation of the Assessing Officer which he gathered from the evidence and records of the case and pass an erroneous order according to his own self made findings without follow the actual merit of the case. In the case of, "lTAT, Delhi, "D" Bench, being ITA No. 3874/Del/2010, the Hon'ble Bench has observed as follows: "The evidence and information is forwarded by CIT(A) to AO. The income tax act contemplates that the AO being entrusted with the job of assessment will verify the information from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee failed to produce books of accounts, salary register before the AO during the course of hearing u/s.143(2), therefore, the CIT( A) made the addition. But during the hearing in remand report, the assessee produced all books of accounts, documents, salary register before the AO in response to the remand report sent by the CIT(A). Accordingly the AO sent the notice u/s.131 of the Act, to the said 5 staff of the assessee by post to their residential address for their personal appearance with documents. Four of the staff out of five staffs appeared before the AO along with their voter ID and bank accounts and they all admitted that they received salary very nominal amount and they received commission on their sale as their designation is 'Sales Representatives'. On considering and being satisfied of their identity with the documentary evidence such as books of accounts, vouchers, bank accounts, voter ID etc. and on considering the oral submissions and acceptance of sale for the staff of the assessee, the AO has rightly observed that commission was paid to the staff of the assessee. Ld. AR also submitted that the remand report prepared by the AO after giving further opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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