Surya Investments Co., Kolkata vs Department Of Income Tax

IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH : KOLKATA

[Before Hon'ble Sri Mahavir Singh, JM & Hon'ble Sri B.P.Jain, AM] I.T.A No. 1698/Kol/2012 Assessment Year : 2003-04 I.T.O., Ward-33(1) -vs.- M/s.Surya Investmemts Co. Kolkata Kolkata [PAN : AAUFS 7561 A) (Appellant) (Respondent) For the Appellant : Shri Sanjay, Addl.CIT For the Respondent : Shri S.K.Tulsiyan, Advocate

Date of Hearing : 10.04.2015 Date of Pronouncement : 30.04.2015. ORDER

Per Shri B.P.Jain, AM

This appeal of the Revenue arises from the order of ld.CIT(A)-XX, Kolkata dated 09.08.2012 for Assessment Year 2003-04.

2. The revenue has raised the following grounds of appeal :

"1. That the Ld. CIT(A) while deciding the issue in favour of the assessee failed to understand the facts and circumstances of the case in respect of expenditure shown as collection and liaison charges to the companies debited in the Profit and Loss Account which is mere diversion of income taken as a ploy by the assessee.

2. That the appellant craves leave to add, alter or modify any or all of the above grounds of appeal before or at the time of hearing."

3. The brief facts of the case are that AO made disallowance of the assessee's claim on the ground that all the companies to whom the commission claimed to have been paid are group/sister concern including the assessee. The main partner of the assessee firm formed the said companies just to divert the income of the assessee firm. Further, no services were rendered by these companies.

3.1. The ld. CIT(A) vide para 3.2 of his order deleted the disallowance so made.

4. We have heard the rival contentions and perused the facts of the case. The undisputed fact in the present case is that the nature of the business of the assessee is to give storage tank on hire for storage of bulk edible oil imported by oil manufacturing 2 ITA No.1698/Kol/2012 M/s.Surya Investments Co.

A.Yr.2003-04 and trading companies. These tanks are owned by the assessee. The parties concerned take these tanks on hire for storage purpose of edible oil through mediateries/service providers. The assessee is having different terms or rates through different companies. It is a matter on record that it is the business need of the assessee to provide such companies for giving on hire the tanks for storage and all the companies are assessed to tax under Companies Act. The facts show that the commission has been paid in lieu of the services rendered by these companies to get the new customers and there was a direct nexus between commission paid and services rendered. There is no dispute between the identity and genuineness of the person to whom commission has been paid. In the circumstances and facts of the case we do not find any infirmity in the order of ld. CIT(A), who has rightly allowed the claim of the assessee and directed the AO to delete the addition so made. Thus the sole ground of appeal of the revenue is dismissed.

5. In the result the appeal of the revenue is dismissed.

Order pronounced in the Court on 30.04.2015.

Sd/- Sd/- [ Mahavir Singh ] [ B.P.Jain ] Judicial Member Accountant Member

Dated : 30.04.2015.

[RG PS]

Copy of the order forwarded to:

1.M/s. Surya Investments Co., 8, Ho-Chi-Minh Sarani, Kolkata-700071.

2. I.T.O., Ward-33(1), Kolkata

3. CIT(A)-XX, Kolkata 4. CIT Kolkata.

5. CIT(DR), Kolkata Benches, Kolkata.

True copy

By Order

Asstt.Registrar, ITAT, Kolkata Benches 2 3 ITA No.1698/Kol/2012 M/s.Surya Investments Co.

A.Yr.2003-04

3