Case Law Details

Case Name : Paresh V. Shah Vs DCIT (ITAT Mumbai)
Appeal Number : M.A. No. 253/Mum/2020
Date of Judgement/Order : 04/03/2021
Related Assessment Year : 2013-14

Paresh V. Shah Vs DCIT (ITAT Mumbai)

I find that by way of this miscellaneous application it is the contention of the learned counsel of the assessee that the ITAT has felt into apparent error while upholding the disallowance of commission payment by not taking into account the document which were submitted.

It is the contention of the ld. Counsel of the assessee that the ITAT has committed error in appreciating the evidences by way of paperbook which was duly submitted and tribunal mistakenly noted that no evidence has been submitted in support of the claim.

Upon careful consideration, I find that as reflected in adjudication by the tribunal as quoted in the above submissions, the tribunal has mistakenly noted that nothing has been submitted before tribunal.

Thus, I note that there is an apparent mistake inasmuch as the tribunal has missed out the paperbook submitted. Moreover, the last ground has also remained unadjudicated. Hence, I agree that the order of the tribunal deserves to be recalled. Hence, the order of the tribunal is recalled.

FULL TEXT OF THE ITAT JUDGEMENT

By way of this miscellaneous application the assessee seeks rectification of mistake u/s. 254(2) of the Income Tax Act, 1961 (‘the Act’ for short) in the order of this tribunal in ITA No. 799/Mum/20 19 for assessment year 2013-14 vide order dated 06.02.2020.

2. In the miscellaneous application following averments have been done:

Vide an order dated 06.02.2020, Applicant’s appeal for A.Y. 2013-14 was disposed of as dismissed.

The brief facts of the case are that the assessee was engaged in the business of wholesale of ferrous and nonferrous metal and alloys. During the course of scrutiny assessment, the Assessing Officer found that the assessee has paid commission totaling to Rs.4,37,370/-to the following parties which were claimed as expenditure:

(i) Shri Jiten N Shah of Rs. 2,19,255/-

(ii) Shri Narendra G Shah of Rs. 2,18,11s/-

The Assessing Officer issued a notice u/s 133(6) in order to verify the Applicant’s claim of commission expenditure. The said notice u/s 133(6) returned unserved as the said parties were out of town at the time when the notice was intended to be served. The assessee contended that the sole fact that notice u/s 133(6) returned unserved, does not form a valid ground for disallowing the entire commission expenditure. Without considering the assessee’s contentions, the Assessing Officer/passed an order making additions of the entire amount of the commission expenditure as non genuine and also made addition of certain other expenses considering them to be personal in nature. In the course of appeal before the CIT(A)/ the Applicant submitted a paperbook dated 13.11.2018 consisting of the following:

(i) Written submission

(ii) Credit note issued to commission agents

(iii) PAN of the said parties

(iv) Form 16A depicting tax deducted at source while making payments to these parties

(v) Bank statements highlighting payments made to the said parties.

Without considering the above and without pointing out any defect in the above submissions, the CIT(A) in its order erroneously stated that the Applicant could not submit any explanation or evidence to substantiate its claim for commission expenditure and thereby dismissed the Applicant’s appeal.

Before the Hon’ble Bench, applicant challenged the CIT(A)’s order on the ground of non consideration of modified facts and grounds and making additions to the Applicant’s income without issuing a show cause notice as mandated vide Instruction No. 20/2015 dated 29.12.2015, non consideration of evidence and material on record and adhoc disallowance of validly claimed expenses. In the course of hearing on 05.02.2020 before your Honours, Authorised Representative (‘AR”) of the assessee tendered a copy of the abovementioned paperbook dated 13.11.2018 submitted in the course of hearing before the CIT(A) which established the identity of the parties and genuineness of the transaction. The AR in the course of her arguments, ran through this paperbook demonstrating that the credit notes, PAN and bank statements of the alleged non genuine parties were submitted before the CIT(A). She also argued that the finding of the Ld. CIT(A) that ‘the identity, address or confirmations of the alleged non genuine parties could not be produced by the assessee was erroneous.

While giving the findings in para 5 of the impugned order, the Hon’ble Bench held that: “assessee could not provide any proof of identity and address of the two parties nor any confirmation for having received the commission payment to the extent of 4,37,370/-. I found that even before the Id. CIT(A), the assessee could not file any evidence or proof of having paid the commission. Even before the Tribunal, the Id AR cannot place on record any evidence to substantiate the identity and genuineness of the transaction of commission payment.”

Therefore, it is humbly prayed that there is a mistake apparent from record in the impugned order in para 5 which states that assessee could not provide any proof of identity and address of the two parties before the Hon’ble Bench as well as the CIT(A). Moreover, the Applicant had also raised the following ground vide its form 36:

Ground No. 3 : “On the facts and circumstances and in law, the Ld. CIT(A) has erred in confirming the disallowance of Rs. 52,276/- made by AO out of expenses claimed under various heads.”

This ground was never adjudicated by the Bench which also qualifies as a mistake apparent from record.

I request the Honorable Tribunal to kindly exercise the powers u/s 254(2) to recall the order dated February 02, 2020 in the interest of Justice.

3. I have heard both the counsel and perused the records.

4. I find that by way of this miscellaneous application it is the contention of the learned counsel of the assessee that the ITAT has felt into apparent error while upholding the disallowance of commission payment by not taking into account the document which were submitted.

5. It is the contention of the ld. Counsel of the assessee that the ITAT has committed error in appreciating the evidences by way of paperbook which was duly submitted and tribunal mistakenly noted that no evidence has been submitted in support of the claim.

6. Upon careful consideration, I find that as reflected in adjudication by the tribunal as quoted in the above submissions, the tribunal has mistakenly noted that nothing has been submitted before tribunal.

7. Thus, I note that there is an apparent mistake inasmuch as the tribunal has missed out the paperbook submitted. Moreover, the last ground has also remained unadjudicated. Hence, I agree that the order of the tribunal deserves to be recalled. Hence, the order of the tribunal is recalled. Registry is directed to fix the appeal in normal course on 17.05.2021. Issue notice to the parties.

8. Accordingly, this miscellaneous application filed by the assessee stands allowed.

Order pronounced in the open court on 04.03.2021

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