PCIT Vs Gujarat Gas Tranding Company Ltd. (Gujarat High Court)
No Revised Return Needed for Fresh Claim Before Appellate Authorities: Gujarat HC; Commission Expenditure Deletion Upheld as Fresh Claim Permissible Before Appellate Authorities: Gujarat HC
The Gujarat High Court heard the Revenue’s appeal under Section 260A of the Income-tax Act, 1961 against the Income Tax Appellate Tribunal’s order dated 31.08.2020 for Assessment Year 2004-05. The Revenue challenged the Tribunal’s deletion of additions of ₹1,45,04,797 towards commission on performance guarantee and ₹3,20,07,330 towards purchase commission, and also contended that the Assessing Officer had carried out the verification directed by the Tribunal.
The assessee, engaged in the business of transmission and distribution of gas, had claimed expenditure towards commission on performance guarantee and purchase commission. Along with its return of income, the assessee appended a note stating that provisions had been made for the commission amounts, that they had been disallowed in the return, and that they would be claimed at the time of actual payment with necessary documents as per law.
The Assessing Officer completed the assessment after restoring the earlier assessment order. While referring to the Tribunal’s earlier direction to verify the quantum of commission paid and the nature of services received, the Assessing Officer observed that the assessee had not claimed the commission expenditure in its return, had subsequently changed its stand by treating it as a contractual liability, and that neither actual payment had been made nor tax had been deducted at source. The Assessing Officer further noted that the Department had consistently disallowed such commission expenditure in other assessment years and that the issue had not attained finality. Accordingly, the earlier assessment was restored without any change.
