TMI Blog2021 (11) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... Addition of difference in the Opening Stock in Current Year with that of Closing Stock of the immediately preceding year - AO observed from the record that there is a difference in Opening Stock in Current Year with that of the Closing Stock of the immediately preceding year - CIT(A) rejected the contentions of the assessee by upholding the additions to income made in the assessment order passed by Assessing Officer - HELD THAT:- As observed that there is no difference between the closing stock of the preceding year with the opening stock of the current year, which was ₹ 150.12 lacs - DR has also fairly and correctly submitted that there is no difference in closing stock of preceding year with the opening stock of current year and the issue is to be decided in favour of the assessee. We have observed that as on 31.03.2011, the closing stock was ₹ 150.12 lacs and the opening stock as on 01.04.2011 was also ₹ 150.12 lacs. There is no difference at all between the closing stock in the preceding year and the opening stock in the current year, rather the AO adopted wrong figures of closing stock of current year with that of the increase/decrease in the stock of fini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re used for business purposes, building for the purposes of Registered office and Motor Vehicle for the purposes of official usage by Directors, the facts on record are not sufficient to come to conclusive finding that these assets were actually used by assessee and further that these assets were wholly and exclusively for the business of the assessee company to satisfy the mandate of Section 32 and 38(2) of the 1961 Act. Further, contention of the assessee that it only claimed depreciation on Building and Motor Vehicle of Allahabad unit and no depreciation was claimed with respect to 'Plant and Machinery' installed at Allahabad Manufacturing unit, again the facts on record are not sufficient to give conclusive finding on this issue, in the absence of details/break-up furnished by the assessee. The assessee is also aggrieved that figure adopted by AO for disallowance of depreciation is not correct. Keeping in view totality of facts and circumstances of the case, we are of the considered view that the assessee will not be entitled for claiming depreciation on the closed Manufacturing unit at Allahabad, but, however, for verification and adjudication of other claims of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nghal , CA For the Respondents : A. K. Singh , Sr. DR ORDER Per Bench These three appeals bearing ITA numbers 19 to 21/Alld./2020 for assessment years (ay's): 2012-13 2013-14 has been filed by assessee before Income Tax Appellate Tribunal, Allahabad, U.P. (hereinafter called the tribunal ) against separate appellate orders passed by ld. Commissioner of Income-tax(A), Allahabad (hereinafter called the CIT(A) ). The appeal in ITA No. 19/Alld/2020 for assessment year 2012-13 has been filed by assessee before tribunal against appellate order dated 23.09.2019 passed by ld. CIT(A) in Appeal Number: CIT(A), Allahabad/10444/2015-16, the appellate proceedings had arisen before ld. CIT(A) from the rectification order dated 26.06.2015 passed by ld. Assessing Officer u/s. 154 of the Income-tax Act, 1961 (hereinafter called the Act ). The appeal in ITA No. 20/Alld/2020 for assessment year 2012-13 has been filed by assessee before tribunal against appellate order dated 07.08.2019 passed by ld. CIT(A) in Appeal Number : CIT(A), Allahabad/10432/2015-16, the appellate proceedings had arisen before ld. CIT(A) from assessment order dated 27.03.2015 passed by ld. Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te with tribunal, beyond the time prescribed u/s. 253(3) of the 1961 Act. When technicalities are pitted against substantial justice, the Courts will lean in favour of substantial justice, unless malice is at writ large or there are latches on the part of the litigant. In case, the delay in filing of the appeal is not attributable to malice or latches on the part of litigant, and sufficient cause is shown by litigant, the delay is consequently condoned by the Court, what best can happen is that the appeal will be heard and decided on merits, which in our considered view will not prejudice any of the party. Reference is also drawn to decision of Hon'ble Supreme Court in the case of Collector Land Acquisition v. Mst. Katiji Ors. 1987 AIR 1353. Thus, keeping in view totality of circumstances and facts of the matter in the instant case before us, we condone delay in filing of all these three appeals by assessee with tribunal by exercising our powers u/s. 253(5) of the 1961 Act, beyond the time stipulated u/s. 253(3) of the 1961 Act, as in our considered view sufficient cause is shown by the assessee, and hence we condone the delay in filing of all these three appeals and proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 Act. 5. Aggrieved by an assessment framed by AO vide assessment order dated 27.03.2015 passed u/s. 143(3) of the 1961 Act, the assessee filed first appeal before ld. CIT(A). The assessee submitted before ld. CIT(A) that prior period adjustment of ₹ 73.02 lacs, includes the following: Discount Allowed @ 12% against Business Turnover for the year 2009-10, 2010-11 2011-12 56,86,194.00 Enclosed copy of statement JV 31/03/2012 page 122,123-124 Appeal fees paid for GST 7,000.00 Enclosed JV dated 31.03.2012 page 125/123 Advance given for meeting out pre- operative Expenses of Plant 1 1,94,908.00 Enclosed JV dated 31.03.2012 Ledger of Pre- operative Exp. Page 126/123 Discount allowed to Bawa Float Glass Ltd 8,22,740.00 Copy of Credit Note enclosed Page 127 Interest provided on U.P. Safety Glass I.C.D. upto 31.03.2011 5,90,985.59 Page 126 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted by ld. Counsel for the assessee that Travelling Tour advances were given to Mr. G. Narayan Swamy (Ex-employee) in the earlier years, which were outstanding in the books of accounts for more than 6-7 years since he left his services without intimation to the company. It was submitted that on final settlement of his dues, ₹ 194,908.50/- was adjusted against advance outstanding in the name of Mr. G. Narayan Swamy (Ex-employee) during the financial year 2007-08. It was submitted by ld. Counsel for the assessee that at that time said amount was erroneously debited to head 'Pre-Operative Expenses' instead of 'Prior Period Expenses'. It was submitted that in the year under consideration, in compliance with auditors observation, the same was rectified and then debited to the account head Prior Period Expenses . The ld. Counsel for the assessee submitted that relevant copy of staff advance ledger of Mr. G. Narayan Swamy for the year 2001-08, Pre-operative Expenses for the year 2007-08 2011-12 JV No. 103 dated 31.03.2012 are enclosed in paper book from page no. 11-14. Further, it was submitted by ld. Counsel for the assessee that Court fees paid against ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2011 on ICD taken from UP Safety Glass, and provision of Section 40(a)(ia) and 43B are attracted to said of interest payable. It was submitted by ld. DR that it is not known whether the assessee complied with provisions of Section 40(a)(ia) and 43B. It was submitted by ld. DR that the assessee has submitted details/evidences/explanations for the first time before ld. CIT(A), and that the no remand report was called by CIT(A) from AO, which is in breach of Rule 46A of Income-tax Rules, 1962. The prayers were made by ld. DR to set aside and restore the matter for denovo adjudication of the issue. 6.3. Regarding second issue of difference in opening stock to the tune of ₹ 44,000/-, it was submitted by ld. Counsel for the assessee that the AO erred in making addition, as there was no difference in the closing stock of last year with the opening stock of current year. Our attention was drawn to page 42 of the Annual Report -2012 to contend that there is no difference in the closing stock of last year with that of the opening stock of current year, which was ₹ 150.12 lacs, and it was submitted that the authorities below erred in comparing closing stock of this year whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts and circumstances of the case, that the matter needs to be set aside and restored to the file of Assessing Officer for de-novo adjudication of the entire issue on merits in accordance with law. The assessee is directed to produce all relevant evidences/details/explanation before the Assessing Officer in set aside de-novo proceedings. Needless to say that the AO shall give proper and adequate opportunity of being heard to the assessee in set aside de-novo proceedings in accordance with principles of natural justice in accordance with law. The AO shall admit all necessary evidences/explanation filed by assessee in support of its contentions and adjudicate the same on merits in accordance with law. We clarify that we have not commented on merits of the issue and all the contentions are kept open. Since the assessee is claiming these expenses as deduction from its income, the onus is on the assessee to substantiate that these expenses are incurred wholly and exclusively for the purposes of business, and further that these expenses are allowable as per mandate of provisions of the 1961 Act, more-so that these expenses did not pertain to the year under consideration. The AO is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Annual Report-2012 of the assessee at note no. 16 (page 42 of Annual Report 2012), which reads as under.:- NOTE No. 16 Changes in inventories of finished goods work-in-progress and Stock-in-Trade Increase/Decrease in stock of Finished Goods For the year Ended 31 March 2012 For the year ended 31 March 2011 Closing Stock 124.73 150.12 Less: Opening Stock 150.12 24.95 Total (25.39) 125.17 8.3. It is observed that there is no difference between the closing stock of the preceding year with the opening stock of the current year, which was ₹ 150.12 lacs. The ld. DR has also fairly and correctly submitted that there is no difference in closing stock of preceding year with the opening stock of current year and the issue is to be decided in favour of the assessee. We have observed that as on 31.03.2011, the closing stock was ₹ 150.12 lacs and the opening stock as on 01.04.2011 was also ₹ 150.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition was disposed off by AO, vide order dated 26.06.2015 passed u/s. 154 of the 1961 Act, by holding as under: Please refer to the petition U/s 154 for the A.Y. 2012-13. In the above case for the A.Y. 2012-13 return was filed on 29.03.2014 which was not within time therefore, carry forward losses will not setoff against the loss/profit for the coming years. Therefore, your petition U/s 154 is here by rejected interest charged by the system is genuine. You are requested to deposit the demand raised for the A.Y. 2012-13 at the earliest. 12. Aggrieved by rectification order dated 26.06.2015 passed by AO u/s. 154 of the 1961 Act, the assessee filed first appeal with ld. CIT(A), and made following submissions before ld. CIT(A).:- During the Cause of appellate proceeding, the appellant has submitted as under- the assessee company has filed its original return of income u/s. 139 (4) on 29th March, 2014 showing a loss of ₹ 2,15,19,363/- for the Assessment Year 2012-13 and claiming refund of ₹ 3,96,760/-. The assessment u/s. 143(3) was completed by I.T.O.-II(3), Allahabad making total additions of ₹ 2,42,39,843/- on ad hoc basis and witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 84,60,929.00 7,64,89,929.00 Total 38,84,38,396.00 52,56,92,612.00 91,41,31,008.00 Copy of assessment orders u/s. 143(1)/143(3)/154 for the assessment years 2006-07, 2008-09, 2009-10 and 2011-12 has been enclosed from Page No. 03-34 for your perusal. 12.2. The ld. CIT(A) was pleased to dismiss the appeal filed by the assessee vide appellate order dated 23.09.2019, by holding as under:- Decision I have gone through the facts and the written submissions filed along with the details filed enclose therein. In this case the appellant has filed its original return of income admittedly late u/s. 139(4) on 29th March, 2014 showing a loss of ₹ 2,15,19,363/- for the Assessment Year 2012-13. The assessment was completed without allowing any set off of brought forward business, losses and unabsorbed depreciation, on 27.03.2015. Appellant filed a petition for Rectification u/s. 154 of the Act for rectification of this mistake i.e. set off of current year losses from its brought forward business losses and unabsorbed depreciation not allowed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 Act, and hence the assessee will not be entitled for carried forward of current year business losses to subsequent years. Our attention was drawn to provisions of Section 32(2), 72, 80 and 139(3) of the 1961 Act. The ld. Counsel for the assessee drew our attention to appellate order passed by ld. CIT(A). The ld. Counsel for the assessee stated before the Bench that there is an error in the figure of brought forward unabsorbed depreciation in the grounds of appeal filed by assessee with tribunal, wherein the figure mentioned is ₹ 15,43,28,383, while the correct figure is ₹ 52,56,92,612/- and prayers were made that correct figures should be considered, although the assessee did not revise Form No. 36 filed with tribunal. The ld. Counsel for the assessee submitted that ld. CIT(A) should have called for remand report from AO before rejecting the contentions of the assessee. 13.2. The Ld. DR on the other hand submitted that the matter is required to be set aside to the file of Assessing Officer for verification of the contentions of assessee. 14. We have considered contentions of both the parties and perused the material on record. The assessee is engaged in the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of three years referred to in that section, such business is re-established, reconstructed or revived by the assessee, so much of the loss as is attributable to such business shall be carried forward to the assessment year relevant to the previous year in which the business is so re-established, reconstructed or revived, and- (a) it shall be set off against the profits and gains, if any, of that business or any other business carried on by him and assessable for that assessment year; and (b) if the loss cannot be wholly so set off, the amount of loss not so set off shall, in case the business so re-established, reconstructed or revived continues to be carried on by the assessee, be carried forward to the following assessment year and so on for seven assessment years immediately succeeding] (2) Where any allowance or part thereof is, under sub-section (2) of section 32 or sub-section (4) of section 35, to be carried forward, effect shall first be given to the provisions of this section. (3) No loss [(other than the loss referred to in the proviso to sub-section (1) of this section)] shall be carried forward under this section for more than eight assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and consequently assessed total income of the assessee, for impugned assessment year. So far as carried forward of business losses for the current year under consideration is concerned, it is fairly conceded by ld. Counsel for the assessee and rightly so, that in view of Section 80 and 139(3) of the 1961 Act, the assessee will not be eligible to carry forward current year business losses to subsequent years, as the return of income for the impugned ay: 2012-13 was filed belatedly beyond the time stipulated for filing of return of income u/s. 139(1) of the 1961 Act. Conjoint reading of Section 80 and 139(3) of the 1961 Act, in our considered view will clearly reveals that it requires for current year business losses to be carried forward to subsequent years for being eligible to be set off against business income of subsequent years, the return of income for the current year has to be mandatorily filed within time stipulated u/s. 139(1) of the 1961 Act. In our considered view, the aforesaid provisions u/s. 80 and 139(3) cannot be stretched to debar already existing assessed business losses of preceding years to be also hit and not allowed to be set off against the business income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d business losses and unabsorbed depreciation (to the extent not set off against current year business income) shall be allowed to be carry forward to the succeeding year viz. ay: 2013-14 and so on, and their carry forward to subsequent years will not be affected merely because the return of income for ay: 2012-13 was filed belatedly beyond the time prescribed u/s. 139(1) of the 1961 Act. However, the overall carry forward of business losses shall be subject to period of eight assessment years immediately succeeding the assessment year for which the loss was first computed, as is stipulated u/s. 72(3) of the 1961 Act, while there is no bar so far as period of carry forward of unabsorbed depreciation as mandated u/s. 32(2) of the 1961 Act, after its amendment by Finance Act, 2001. Reference is drawn to the decision(s) of Hon'ble Gujarat High Court in the case of General Motors India Private Limited v. DCIT, reported in (2012) 25 taxmann.com 364 (Guj. HC), Hon'ble Madras High Court decision in the case of CIT v. KMC Speciality Hospitals India Private Limited reported in (2021) 130 taxmann.com 215 (Mad. HC). Reference is also drawn to dismissal of SLP by Hon'ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of records. Needless to say that the AO shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law, to carry on directions as per our order. The AO shall admit all necessary evidences/explanation filed by assessee in support of its contentions and adjudicate the same on merits in accordance with law. The AO is directed to pass detailed and reasoned order. This ground of appeal is partly allowed for statistical purposes. We order accordingly. 15. In the result, the appeal filed by assessee in ITA no. 19/Alld/2020 for ay: 2012-13 is partly allowed for statistical purposes. We order accordingly. ITA No. 21/ALLD/2020 Assessment Year: 2013-14 15. We shall now take up assessee's appeal in ITA No. 21/Alld/2020 for ay: 2013-14. The grounds of appeals raised by assessee in memo of appeal filed with tribunal reads as under:- 1. Because the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts to confirm the impugned addition made by the Assessing Officer on account of disallowance of depreciation claim ₹ 36,44,445/- being 30% of the total deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion . The assessee was asked to explain the same by AO in the proceedings conducted by AO u/s. 143(3) read with Section 143(2) of the 1961 Act. The assessee submitted credit notes issued to different persons, and submitted before the AO that such rebate is attributable to the promptness of payments and also to performance. The AO observed that these credit notes referred to payments as 'Commission'. The AO further observed that the assessee has not deducted income-tax at source on these payments, even though these payments were covered under the ambit of deduction of income-tax at source u/s. 194H of the 1961 Act. The AO by invoking provisions of Section 40(a)(ia) of the 1961 Act, disallowed the Rebate expenses and added the same to income of the assessee, vide assessment order dated 31.03.2016 passed by AO u/s. 143(3) of the 1961 Act. 18. The assessee company being aggrieved by assessment framed by AO, carried the matter further before ld. CIT(A) by filing first appeal, and the assessee submitted before ld. CIT(A) on the first issue of disallowance of depreciation, as under.:- The A.O has wrongly computed the amount disallowed being 30% of total depreciation clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is legally held as real use. Appellant's contention that the assets of the Allahabad unit could not be segregated for the purpose of calculating the depreciation is also not acceptable for the reason that appellant themselves have claimed depreciation only on the part of the assets, meaning thereby that they could segregate the depreciation on assets. As a limited company the appellant is to maintain a fixed asset register as per Company's Act also where complete details are to be maintained in respect of each asset purchased or sold, therefore this submission of the appellant cannot be agreed to. With these comments action of the AO is upheld. This ground is dismissed. 19.2. The ld. CIT(A) was also pleased to dismiss appeal filed by the assessee on the second issue concerning disallowance of Rebate Expenses claimed by assessee as deduction while computing income chargeable to tax under the head 'Profits and Gains from business or Profession', vide appellate order dated 24.09.2019, by holding as under: Decision: I have gone through the facts and the written submissions filed along with the details filed enclose therein. AO disallowed the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration, while only manufacturing unit at Allahabad, U.P. was closed. The ld. Counsel for the assessee relied upon decision of Mumbai-tribunal in the case of Swati Synthetics Limited v. ITO, in ITA No. 1165/M/2006, order dated 17.12.2009. The ld. Counsel for the assessee also relied upon Hon'ble Bombay High Court decision in the case of CIT v. Visvanath Bhaskar Sathe reported in (1937) 5 ITR 621(Bom.). The ld. Counsel for the assessee submitted that Registered office of the company is situated at Allahabad premises. It was submitted that Motor Vehicles were used by Directors of the assessee company and no new vehicle was purchased during the year. The ld. Counsel for the assessee submitted that the assessee is entitled for claim of depreciation on Allahabad unit as the concept is of Block of Assets. It is also submitted by ld. Counsel for the assessee before the Bench that the assessee never claimed the depreciation on Manufacturing Plant at Allahabad, while depreciation was only claimed on Building and Motor Vehicles situated at Allahabad, as the Building was used for Registered Office purposes, while Motor vehicles are used by Directors for business purposes. 20.2. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,17,06,172/- paid towards Rebate Rate Difference, an amount of ₹ 58,72,488/- was commission paid to M/s. Chakku Sons, and hence net Rebate for Rate difference allowed was ₹ 58,33,684/-. The details of commission paid to Chakku Sons is at page 222/paper book. It was submitted that ₹ 58.72 lacs was paid towards commission on which the assessee was required to deduct income-tax at source u/s. 194H, but the income-tax was not deducted at source. The Rebate for rate differences credit notes are placed in page 189-221. The ld. Counsel for the assessee conceded that the disallowance is to be restricted to ₹ 58,72,488/- as it was commission paid by the assessee to Chakku Sons and admittedly income-tax was not deducted at source u/s. 194H of the 1961 Act. 20.3. The ld. DR on the other hand with respect to first issue of disallowance of depreciation relied upon orders of authorities below. The ld. DR relied upon Special Bench - Chandigarh tribunal decision in the case of Gulati Saree Centre (1999) 71 ITD 73(Chd. SB) and decision of Chandigarh-tribunal in the case of Singla Agencies v. ACIT, reported in (1997) 60 ITD 410(Chd.-trib.) 20.4. On the second is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowability of depreciation, and once the assets formed part of 'Block of Assets', then the individual asset will lose its identity and depreciation is to be allowed on the entire 'Block of Asset' under the new regime of allowability Depreciation u/s. 32 of the 1961 Act. The assessee has also claimed that it never claimed depreciation on 'Plant and Machinery' which are situated at Allahabad Manufacturing unit, and only depreciation is claimed on Building as well Motor Vehicles at Allahabad. It is claimed that the Building at Allahabad Manufacturing unit is used for Registered Office of the assessee company, and secondly Motor Vehicles at Allahabad are used by Directors of the assessee company for business purposes. It is an admitted position that the assessee did not give bifurcation/details of fixed assets before the AO and even before us no details are furnished. The AO has made ad-hoc disallowance of 30% of total depreciation claimed, which is later confirmed by ld. CIT(A). Hence, it could not be verified as to the details of depreciation claimed. In the absence of details/bifurcation of assets and other relevant material, even we are also not in a positi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) of section 30, clauses (i) and (ii) of section 31 and [clause (ii) of sub-section (1)] of section 32 shall be restricted to a fair proportionate part thereof which the [Assessing] Officer may determine, having regard to the user of such building, machinery, plant or furniture for the purposes of the business or profession. Reference is also drawn to Special Bench decision of Chandigarh-tribunal in the case of Gulati Saree Centre(Supra) and decision of Chandigarh-tribunal decision in the case of Singla Agencies(supra), as relied upon by ld. DR, wherein it is held that the individual assets will not lose their identity merely because they form part of 'Block of Asset'. This contention of ld. Counsel for the assessee that once asset forms part of 'Block of Assets', then it losses its identity and till 'Block of Assets' remains in existence, then deprecation on the entire block of asset is to be allowed, whether or not the asset is used for business purposes is rejected. Further, it is claimed that the assets were ready and available for use for business purposes and hence, the depreciation is to be allowed on passive user of the asset, which is as good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... get a favorable order from Hon'ble AIFFR on 19.03.2013 wherein they remanded back our case to BIFR for reconsideration. BIFR on 21.03.2013 accepted the recommendation of AIFFR and passed orders to Operating Agency to take steps for sale of the Allahabad Plant as per BIFR guidelines. The Operating agency has started the process of reconstituting the sale committee, etc. Conjoint reading of the factual status as stated by ld. Counsel for the assessee before the Bench that the Allahabad manufacturing unit was lying closed for several years with the above note in Directors Report, clearly reveals that the assets of Manufacturing unit at Allahabad were not being used during the year, both active user as well passive user were not there, rather the assessee was making efforts to sell the Plant and Machinery at Allahabad Manufacturing unit to clear its financial liabilities, as the assessee was registered as a sick company with BIFR. Thus, the Revenue has rightly denied the depreciation on the assets at Allahabad Manufacturing unit, as the same were neither actually used for business nor the same were passively used for business as these assets were not even ready for use, and ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with law. In case the assessee do not co-operate before the AO in set aside proceedings by bringing on record complete details/break-up of assets of Allahabad Manufacturing unit, Rajamundari Manufacturing unit and other assets, or in providing other required details, then the AO shall be free to proceed on merits in accordance with law, based on material available on record. This ground of appeal is partly allowed for statistical purposes. We order accordingly. 21.2. So far as second issue is concerned which concerns itself with disallowance of Rebate Expenses claimed by the assessee as deduction while computing income chargeable to tax under the head 'Profits and Gains from Business or Profession'. The ld. Counsel for the assessee has conceded before the Bench that ₹ 58,72,488/- (page 222-229 of paper book) was paid as Commission to M/s. Chakku Sons, on which no income-tax was deducted at source u/s. 194H of the 1961 Act and hence keeping in view provisions of the Section 40(a)(ia), the same is to be disallowed. We hold so and order accordingly, that ₹ 58,72,488/- claimed as Rebate Expenses is to be disallowed and added to the income of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has stated by hand written note in page 187, that out of ₹ 1,17,06,172/- paid towards Rebate for Rate Difference, an amount of ₹ 58,72,488/- was commission paid to M/s. Chakku Sons, and hence net Rebate for Rate difference allowed was ₹ 58,33,684/-.The assessee has claimed that these are not commission expenses, while the authorities below held the same to be Commission. It is further held by authorities below that no income-tax was deducted at source by assessee u/s. 194H and the same is not allowable as deduction while computing income chargeable to tax. The assessee is claiming these expenses as deduction while computing income chargeable to tax under the provisions of the 1961 Act and the primary onus is on the assessee to establish that these expenses are incurred wholly and exclusively for the purposes of business of the assessee and mandate of Section 37(1) is fulfilled. The assessee has merely submitted credit notes, and no further details as to contract/agreement with parties, claim(s) raised by parties and evidences to substantiate the claims are bonafide and genuine etc., are furnished by assessee. Further, material on record, is not sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X
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