TMI Blog2018 (2) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal filed by the assessee. - I.T.A. No. 1994/Kol/2016 - - - Dated:- 9-2-2018 - Shri P.M. Jagtap, AM Shri I, Banerjee, FCA, appearing on behalf of the Assessee Shri Amitave Bhattacharya, Addl. CIT appearing on behalf of the Revenue ORDER Per P.M. Jagtap, AM This appeal filed by the assessee is directed against the order of Ld. CIT(A) 18, Kolkata dated 29.07.2016 and although there are as many as five grounds raised by the assessee, the solitary common issue involved therein relates to the disallowance of ₹ 35,00,000/- made by the A.O. and confirmed by the Ld. CIT(A) on account of supervision charges. 2. The assessee in the present is a company which is engaged in the business of trading of industrial consumables. The return of income for the year under consideration was filed by it on 28.09.2010 declaring a total income of ₹ 7,96,250/- In the Profit Loss Account filed along with the said return, a sum of ₹ 35,00,000/- was debited by the assessee on account of supervision charges. Since no such expenditure on account of supervision charges was incurred by the assessee in the earlier years, the A.O. required the assessee to furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenged by the assessee in the appeal filed before the Ld. CIT(A). It was submitted on behalf of the assessee before the Ld. CIT(A) that it was a dealer of Usha Martin and had supplied wire ropes manufactured by Usha Martin to the various customers. It was also submitted that the supervision charges of ₹ 35,00,000/- were paid to five contractors @ ₹ 7,00,000/- each in pursuance of the agreement with M/s. Usha Martin. The following submissions were also made by the assessee to support and substantiate its claim for deduction on account of supervision charges: 1.To increase customers satisfaction and services assessee was specifically required to appoint supervisors. 2. The payees were mere contractors. They were not technically expert but they had their own technical staff trained by Usha Martin to do the actual supervision. 3. Assessee denied that supervisors were appointed by the buyers. It was submitted that supervisors were appointed by the assessee and payments were made by the assessee. 4. Installation of wire ropes at the site of the buyer involves strict supervision. Hence these supervisors were placed at buyer s premises. 5. No adverse in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is nothing mentioned about any services to be provided by assessee at buyer s premises. 6. Specifications in Guarantee Certificate issued by Usha Martin speak about the quality of product. Supervisors have no role in product quality. 7. A.O. has pointed out that each of the contractor was paid following amounts on the same day: a) ₹ 1,96,000/- on 05.03.20102 b) ₹ 4,14,000/- on 24.03.2010 c) ₹ 96,000/- on 24.03.2010 A.O. has further pointed out that it seems unbelievable that each contractor provided equal services over a period of time which necessitated equal payments. 8. Assessee did not furnish details of payments [cheque no., date of payment, clearing dates etc.] Further bills furnished by assessee is not signed by the contractors. 9. Purchase bills regarding which services of contractors were availed shows that the bills are for Seamless Pipes and Polyster Sling and not for wire ropes. 10. Assessee did not produce TDS details for payments made to contractors. 5. When the remand submitted by the A.O. was confronted by the Ld. CIT(A) to the assessee, the later filed copies of acknowledgement of income t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Chandan Prasad Perusal of these documents shows the following: 1) All 4 returns are belated returns filed respectively on 13/01/ 2011, 12/01/2011, 14/01/2011 and 11/01/2011. 2. Form 26AS in the case of Smt. Kamla Devi shows that TDS of ₹ 73O1/- was made by Jagdamba Commercial Pvt. Ltd. and ₹ 14,000/- was deducted by the assessee. However, in the return of income , she has claimed credit of only ₹ 7301/-. 3) In the case of Sri Ashok Sharma, he has shown income receipts from only Maa Vaishnovi Sponge Ltd. and Reliable Sponge Ltd. There no mention of the assessee Co. in Form 26AS. 4) In the case of Sri Ghanashyam Das Agarwal, income has been received from Jagdamba Commercial Pvt. Ltd., Suraj Solutions Pvt. Ltd. and the assessee company. However, in the return of income he has not claimed credit for TDS made by assessee company. 5) In the case of Sri Raman Das, only one income receipt is there and i.e. from the assessee company. Sri Raman Das has also claim TDS credit of ₹ 14,000/- in the return of income. Thus only one contractor Sh. Raman Das is showing the receipts from the assessee company. All other contractors have not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee to show the terms and conditions of the contract stated to be for rendering the supervisory services. He also submitted that there was no other documentary evidence that is filed by the assessee to show the services claimed to be rendered by the concerned contractors for the purpose of assessee s business. He submitted that the learned counsel for the assessee has not been able to make any submissions to explain the stand of the assessee in respect of various adverse findings / observations recorded by the A.O. in the remand report as well as by the Ld. CIT(A) in the impugned order. He contended that there is thus clear failure of the assessee to support and substantiate its claim for deduction on account of supervision charges and since the assessee has not satisfactorily discharged the onus that lay on it, it was not incumbent upon the A.O. to make any enquiry with the concerned parties before making disallowance on account of supervision charges. He, therefore, strongly supported the impugned order of the Ld. CIT(A) confirming the disallowance made by the A.O. on account of supervision charges and urged that the same deserves to be upheld. 9. I have considere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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