No cash Paid for taking Reversal of Entry as Commission through Proper Banking Channel: ITAT quashes Revision Order [Read Order]

The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that no cash paid for taking reversal of entry as commission through proper banking channel by assessee. Hence, held that the revision order passed under Section 263 of Income Tax Act 1961 has quashed.

The assessee C.M.Buildcon Pvt. Ltd is a company engaged in the business of real estate and deriving its business income from the same . After filing the return of income  AO issued the notice under Section  148 Income Tax Act on the basis of some documents seized during the survey proceeding on M/s Cardio Technovention.

It was contented that the assessee-company paid cash amounting to Rs. 5,73,183/- to M/s Cardio Technovention for the purpose of taking reversal of entry as commission received through proper banking channel. The reassessment was concluded at the returned income.

Thereafter, the Principal Commissioner of Income Tax (Appeal)  issued notice under Section 263 assessment order passed was erroneous and prejudicial to the interest of revenue.

Further alleged that assessee-company paid cash amounting to Rs. 5,73,183/- to M/s Cardio Technovention for the purpose of taking reversal of entry as commission received through proper banking channel for Rs. 6,39,000/- and this issue was not thoroughly examined while completing the assessment.

Aggrieved by the order, the assessee filed an appeal before the tribunal.

During the hearing  Rakesh Gupta ,counsel for assessee submitted that issue of alleged cash paid to M/s Cardio Technovention was thoroughly examined during the assessment proceedings and nothing adverse was found in this regard to prove such allegation against the assessee and thus the re-assessment was completed at returned income.

Further, the Profit and Loss account of  the assessee showed  that the amount received from M/s Cardio Technovention has  duly shown as revenue and thus offered for taxation purpose.

Javed Akhtar, Counsel for Revenue argued that interest expenditure has not given rise to the corresponding interest income. The interest income has arisen independently out of fixed deposits fixed with banks, the source of which in turn is sale of investments.

According to the affidavit filed by the M/s Cardio Technovention , AO proved the  fact that  cash was not received by M/s Cardio Technovention. Hence, It was not self serving affidavit of the assessee but of concerned party from  whom allegedly the assessee had benefited

After reviewing the facts and submission, the two member bench of the tribunal comprising Pradip Kumar Kedia (Accountant Member) and Challa Nagendra (Judicial Member) allowed the appeal filed by the assessee  and quashed the revision order.

To Read the full text of the Order CLICK HERE

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