TMI Blog2017 (1) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to the staff of the assessee. Ld. AR also submitted that the remand report prepared by the AO after giving further opportunity of being heard to the assessee and after verification of all returns and witnesses and there is no infirmity in the remand report, therefore, ld. CIT(A) must accept it. The remand report was prepared by the AO after thoroughly verification of books of accounts, documents as well as personal appearances of the staff of the assessee in respect of notice u/s.131 of the I.T.Act. But the ld. CIT(A) disbelieved in the remand report of the AO and passed the erroneous order - Decided in favour of assessee - ITA Nos.30 & 31/Kol/2014 - - - Dated:- 28-10-2016 - SHRI K. NARASIMHA CHARY, JM DR. A.L.SAINI, AM For The Assessee : Shri Suvam Das, Advocate For The Revenue : Shri Pinaki Mukharjee, JCIT ORDER Per Dr. Arjun Lal Saini, AM: The captioned above cited two appeals, filed by the assessee, pertaining to the assessment years 2007-2008 2008-09, are directed against the orders passed by ld. Commissioner of Income Tax (Appeals)- XXXII, Kolkata, in Appeal Nos.33 34/XXXII/10-11/50(1)/Kol, dated 17.09.2013, which in turn arise out of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and the A.O. also has not made any verification as he was supposed to. The A.O. has wrongly relied on certain nonspeaking documents eg. a copy of a bank statement which does not mention any customer`s name. No verification was done by the A.O. regarding the immediate sources of the funds, no verification was done from the M/s. Forbes Infotainment Ltd. and the books of the assessee or of the Partner also were not verified. The A.O. has further relied on a letter dated nil addressed to the A.O. wherein Sri Dibyendu Dutta merely mentions that the above payment were made by him from his bank account of his proprietary business M/s. Akash Enterprises. The firm`s bank account no. was given in the letter and the Final Accounts of M/s. Akash Enterprises was also filed. However, it is noted that the Balance Sheet of M/s. Akash Enterprise does not mention SB A/c. No.011600/050512. The Balance Sheet mention the account number as SB alc. NO.11217060779 01660/062338. Further the Balance Sheet of M/s. Akash Enterprise does not declare any substantial drawings from the capital account of Sri Dibyendu Dutta. The total drawing declared is only ₹ 60.000/-. Also the personal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not require to be paid.) Thus in the absence of the compelling need and evidence it is held that the commission has not been paid to the employees and the explanation is only a ploy to reduce taxable income. By this method the assessee had incurred expenditure of ₹ 1 0,30,926/- against total commission receipts of ₹ 14.24.944/- The business model of M/s. Forbes lnfotainment Ltd. is to allow the distributors and retailiers to earn commission based on the amount of lottery played on the lottery machines distributed and installed on the premises respectively. In addition to the general arguments above, the case presents some serious problem. There is no reliability of the replies of the assessee during the appellate as well as during the remand proceedings. Here it is necessary to mention that the auditor of the assessee M/s. Das Associates had filed an explanation regarding the discrepancy on Audit Report for F.Y.2007-08 corresponding to A.Y. 2008-09 dated 17.10.2009. The same is extracted as below: I have received an query from Sri Dibyendu Dutta. Partner of M/s. D.D. Infotech of K N C. Road, Barasat, Northh-24 Parganas. Kolkata-700 1124 being PAN NO.AA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R of the assessee. Ld. AR for the assessee has submitted before us that : Submission for ground No. 1 ( ITA 30/Kol/2014) a) it is submitted by your appellant that the assessing officer added a sum of ₹ 7,15,000/- on account of a partner Sri Dibyendu Dutta as unexplained u/s 68. It is also submitted by the appellant that the CIT (Al asked the assessing officer to produce remand report in this matter. The Assessing Officer called for clarification of the assessee with regard to the submission in the appeal. During the course of hearing before the Assessing Officer, the assessee/appellant produced all relevant documents, such as bank statement, audit report of his personal business namely Akash Enterprise etc. and on perusal of all the documents the Assessing Officer has been satisfied that the introduction capital of ₹ 7,15,000/- is not unexplained. But, the CIT (A) did not consider the remand report of the Assessing Officer on the ground that the bank account of which cheque was issued to the appellant firm as introduction of capital of said Sri Dibyendu Dutta, partner of the appellant firm is not shown in the balance sheet of AKASH ENTERPRISE, and, said pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the commission paid to the staff of the appellant. But, without considering the remand report as well as all the documentary evidence, oral submission and merit of the case, as well as said four staff that were appeared before the A.O. in response to a notice issued u/s 131 of the Act, the CIT (A) did not consider the actual fact and merit of the case on the ground that the assessee submitted two separate set of list of the staff. Regarding the matter he failed to peruse the record properly as then authorized Advocate Sri Partha Pratim Chakraborty of the assessee already submitted an affidavit stating inter-alia that he produced a wrong list of the staff as necessary documents were unavailable to him on that time during the course of hearing u/s 143(2). The CIT (A) has no jurisdiction to turn down a declaration made by an Advocate by way of affidavit until or unless it is proved to be ingenuine. Your appellant begs to submit that the CIT (A) acted beyond his jurisdiction. He failed to maintain the statute mandatorily required. The CIT (A) while deciding the appeal to set out the issue for determination and the decision thereof along with reasons for arriving at the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) does not confrontation of the records, documents and merit of the case and thus, it may be deleted and or set aside. 8. On the other hand, ld. DR for the Revenue has vehemently submitted that ld. CIT(A) has passed a reasoned order. The assessee under consideration has failed to prove the capacity of the creditors and genuineness of the transfer of money without deducting tax at source. The dispute under consideration is that the assessee has paid commission to its staff in addition to their normal salary. The assessee has not deducted any tax at source. Ld. DR also submitted that neither in the assessment proceedings, nor in the appellate proceedings, the assessee or its staff gave any details of the sales effected party-wise by each employee, who have received the commission. The business of online lottery of M/s Forbes Infotainment Ltd. worked on installation of lottery terminals where the ordinary people can play the lottery. In this business the retailers and distributor place a deposit with the company against the terminal installed, which was returned back by M/s Forbes Infotainment Ltd. in exchange for the terminals when M/s Forbes Infotainment Shut shop. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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