Deepesh Gupta, Jaipur vs Assessee

Shri Deepesh Gupta, cuke The I.T.O., Prop- M/s Small Scale Cottage Vs. Ward-5(1), Jaipur. Industries, Dussera Kothi, Amer Road, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ADUPG 0413 A vihykFkhZ@Appellant izR;FkhZ@Respondent

fu/kZkfjrh dh vksj ls@ Assessee by : None. jktLo dh vksjr ls@ Revenue by: Mrs. Neena Jeph (JCIT)

lquokbZ dh rkjh[k@ Date of Hearing : 27/01/2015 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 29/01/2015

vkns'k@ ORDER

PER: R.P. TOLANI, J.M.

This is an appeal filed by the assessee against the order dated

21/02/2014 by the learned CIT(A)-II, Jaipur for A.Y. 2009-10. The sole

ground of appeal raised is as under:-

2 ITA 301/JP/2014_ Deepesh Gupta Vs. ITO

"1. That the learned CIT(Appeals) has erred in confirming the disallowance of Rs. 98,122/- out of commission paid. The disallowance sustained is unjustified and excessive."

2 None appeared on behalf of the assessee despite of issue of

proper notice, consequently appeal is heard ex parte after hearing the

ld. DR and after perusal of the record.

3. Brief facts of the case are that the assessee is in the business of

selling handicrafts items, carpets, jewellery, textiles etc. to tourists. The

assessee debited an expenditure of Rs. 12,26,522/- as commission

expenditure claimed to be paid to the agents like guides, taxi drivers

etc., who brought the tourists to his business premises for purchase of

such items. The Assessing Officer, however, held that the commission

vouchers were self made mentioning only name of tour guides, taxi

drivers with taxi number, which according to him didn't constitute

proper evidence. It was held that the assessee was not able to provide

complete details of recepeints of commission consequently, an amount

of Rs. 98,122/- being 8% of such expenditure was disallowed.

4. In first appeal, the assessee contended that in A.Y. 2007-08, the

Assessing Officer disallowed 8% of the commission expenditure, which

was enhanced to 10% by the learned CIT(A). The ITAT vide order 3 ITA 301/JP/2014_ Deepesh Gupta Vs. ITO

dated 10/01/2012 reduced it to a lump sum of Rs. 50,000/-, which

works out to 2.27% of the commission. In A.Y. 2008-09, the learned

CIT(A) himself has restricted the disallowance to 2.62%. It is a common

practice in such trade to pay commission to escorting tour guides or taxi

drivers, it will not be possible for assessee to insist for full vouchers in

presence of tourist for the fear of adverse publicity. Ld. CIT(A) however

confirmed the addition which is agitated by the assessee in second

appeal.

5. The learned SR.DR relied on the order of the lower authorities.

6. I have heard the ld. DR and perused the material available on the

record. It is a common knowledge that in the trade of sales of

handicrafts items to the tourists, the escorting tour guides or taxi

drivers are paid commission. It will not be possible for the assessee to

insist for each and every detail from such persons in presence of the

customers. Looking at the past history, in similar circumstances in A.Y.

2008-08, the CIT(A)'s reduced the disallowance to @ 2.62% of the

commission and in A.Y. 2007-08 to 2.27%. In these facts and

circumstances, in my considered view, a lump sum disallowance of Rs.

4 ITA 301/JP/2014_ Deepesh Gupta Vs. ITO

25,000/- will meet the ends of justice. Consequently, the disallowance is

reduced to an amount of Rs. 25,000/-.

6. In the result, the assessee's appeal is partly allowed.

Order pronounced in the open court on 29/01/2015.

Sd/-

¼vkj-ih-rksykuh½ (R.P.Tolani) U;kf;d lnL;@Judicial Member

Tk;iqj@Jaipur fnukad@Dated:- 29th January, 2015 *Ranjan

vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- Shri Deepesh Gupta, Jaipur.

2. izR;FkhZ@ The Respondent- The I.T.O., Ward-5(1), Jaipur.

3. vk;dj vk;qDr@ CIT(A)-II, Jaipur

4. vk;dj vk;qDr@ CIT, Jaipur

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (ITA No. 301/JP/2014)

vkns'kkuqlkj@ By order,

lgk;d iathdkj@Asst. Registrar