Ita v. The Deputy Commissioner Of Income Tax Central Circle-2

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE MONDAY, THE 16TH DAY OF DECEMBER 2013/25TH AGRAHAYANA, 1935 ITA.No. 270 of 2013 () ----------------------- (AGAINST THE ORDER IN ITA.NO. 42/COCH/2012 OF INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH DATED 19-04-2013) -------------------------------- APPELLANT/APPELLANT: ----------------------------------------- M/S. INDO SCOTISH BRAND PVT. LTD. (DISTILLERY), KARUVELIPADY, COCHIN - 682 005, PAN: AABCI 2511 E BY ADVS.SRI.ANIL D. NAIR SRI.R.SREEJITH SMT.NIVEDITA A.KAMATH SMT.SULEKHA BEEVI C.S. SMT.VIKEESHA T.S. RESPONDENT/RESPONDENT: -------------------------------------------------- THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2,ERNAKULAM. BY SRI.JOSE JOSEPH, SC THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 16-12-2013,ALONG WITH I.T.A.NO.275 OF 2013 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: I.T.A.NO.270/2013 APPENDIX PETITIONER'S ANNEXURES: ANNEX ACOPY OF THE ASSESSMENT ORDER DATED 30/12/2009 OF THE DEPUTY COMMISSIONER OF INCOME TAX, ERNAKULAM ANNEX BCOPY OF THE ORDER DATED 7/12/2011 OF THE COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, ERNAKULAMINCOME TAX, CENTRAL CIRCLE-2, ERNAKULAM ANNEX CCOPY OF THE ORDER DATED 19/4/2013 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH ANNEX DCOPY OF THE RELEVANT PAGES OF REMAND REPORT OF THE OFFICER.OFFICER. RESPONDENT'S ANNEXURES:NIL /TRUE COPY/ P.A.TO.JUDGE MANJULA CHELLUR,C.J. & A.M.SHAFFIQUE, J. = = = = = = = = = = = = = = = = I.T.A.Nos.270,275,276,277,281,282,286 and 288 of 2013= = = = = = = = = = = = = = = = = = = = = Dated this the 16th day of December, 2013 JUDGMENT Manjula Chellur,CJ The assessment years with reference to the above appealsare as under:- 2. The entire issue revolves around the disallowanceregarding the amount said to have been paid as Commission toone Mr.Vinod by the appellant-assessee company. 3. On perusal of the records, we find the assessing officerrejected the claim of disallowance made by the assessee. BeforeCIT(Appeals) 50% of the claims were allowed rejecting the other50%. Aggrieved by the same, the Revenue and the assesseeapproached the Tribunal and the Tribunal after placing onrecord the details collected in the remand report rejected thecase of the assessee and accepted the claim of the Revenuethereby the additions made by the Assessing Officer rejectingthe disallowance claimed by the assessee was confirmed. 4. The claim of the assessee company regarding theexpenses under the heads Commission and Incentive between2002-03 to 2005-06 was rejected by the assessing officer and atthat point of time, the claim of the assessee was, commission andincentive was paid to sales men of Kerala State BeveragesCorporation. In other words, the claim of the assessee before theAssessing Officer was, the amount under the head Commissionand Incentives was paid to the employees of BeveragesCorporation and retail outlets for boosting up the sales. Here nowhere name of Mr.Vinod is mentioned. If one Mr.Vinod wastaking care of the affairs as stated in the remand report, we failto understand why a joint account was opened in the name ofassessee company and Mr.Vinod and how again he would lookafter the affairs of the company in the place of Mr.K.P.Joseph asMr.K.P.Joseph became the Managing Director of the company. nowhere name of Mr.Vinod is mentioned. If one Mr.Vinod wastaking care of the affairs as stated in the remand report, we failto understand why a joint account was opened in the name ofassessee company and Mr.Vinod and how again he would lookafter the affairs of the company in the place of Mr.K.P.Joseph asMr.K.P.Joseph became the Managing Director of the company. 5. We also fail to understand why Mr Vinod has not evenfiled his IT returns if huge amounts of commission was received,as claimed by the assessee company. The stand of the assesseebefore the Assessing Officer was that these amounts were paidto the employees of Beverages Corporation and retail outletemployees and in the remand report when the statement ofMr.Vinod came to be recorded it was the commission paid to himduring those years. The very role played by Mr.Vinod in theaffairs of the company and also the amount said to have beenpaid by him to the Managing Director, all looks very suspicious.Therefore the authorities were justified in rejecting the stand ofthe assessee. Through, Mr.Vinod, as indicated in the remand I.T.A.Nos.270,275,276,277,281,282,286 and 288 of 2013 report that from time to time the amounts claimed were paid ascommission but to whom paid becomes a very doubtful issue. In that view of the matter, we are of the opinion, theAssessing Officer and Tribunal was justified in disallowing theclaims made by the assessee. Accordingly, the appeals arerejected at the admission stage itself. MANJULA CHELLUR, CHIEF JUSTICE A.M.SHAFFIQUE, JUDGE. sj17/12