Case Law Details
These Income Tax appeals are filed by the Revenue aggrieved by the order passed by the Income Tax Appellate Tribunal, Cochin Bench allowing I.T.A. Nos. 428 & 429 of 2002 filed by the respondent/assessee concerning the assessment years 1997-98 and 1998-99. In the returns filed by the assessee, it was revealed that during the aforesaid years, the assessee had paid substantial amounts towards sales commission to M/s. Lovely Enterprises, Delhi for consignment sales. The Assessing Officer disallowed the claim, on the ground that the existence of such agent itself was in doubt. The first Appellate Authority conducted further enquiries into the matter. But, however confirmed the order of assessment. Further appeals were filed before the Tribunal. Before the Tribunal, the assessee had produced further documents. The Tribunal referred to the documents and found that the evidence indicated that the assessee had received only 95% of the invoice price and that the assessee could not have been taxed for an income which they have not received. For this purpose, the Tribunal placed reliance of the judgment of the Apex Court in Godhra Electricity Co.Ltd. v. Commissioner of Income-Tax [225 (1997)ITR 746]. On that basis, the Tribunal allowed the appeals of the assessee. It is this common order that is challenged by the Revenue and the questions of law framed are the following:
“1. Whether on the facts and in the circumstances of the case the Tribunal is right in allowing the assessee’s appeal when the payee was not traceable and there was no proof of payment of commission.
2. Whether on the facts and in the circumstances of the case, is the Tribunal right when the validity of the agreement itself has not been proved beyond doubt.
3. Whether on the facts and in the circumstances of the case the finding of the Assessing Officer being that “the existence of the party itself was doubtful (confirmed by the CIT(A) holding that the genuineness of the same has not been proved) the Tribunal is right in law in interfering with the order of the assessment without interfering with the findings of the Assessing Officer and the CIT(A)?
4. Whether on the facts and in the circumstances of the case is not the finding of “not doubted” and basing the order on “the agreement” absolutely perverse and unwarranted when the case of the Revenue is one of non existence of the party itself and lack of genuineness?
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