From,
………………………………………………………
………………………………………………………
Dated ………………………..
To,
The Additional Commissioner of Income Tax / Joint Commissioner of Income Tax
Range …………………………………………….
Dear Sir/Madam,
Subject : Reply of Your Notice u/s 144A for assessment proceedings.
PAN No ………………
My client …………………… has received your Notice dated…………………… u/s 144A of the Income Tax Act, 1961 for assessment year …………… with regard to the directions proposed to be issued by you with regard to the assessment proceedings.
We have been instructed by our client, to make the following submission :
- Proposed addition with regard to certain Loans :
I would like to bring to your notice that the loans from …………… were taken ….. years back and the same have been duly accepted year after year in the assessments of my client. It may so happen that the notice issued by the Assessing Officer has not been served and returned back due to possible change of address. As the loan creditor is situated outside, I would request you to allows us time so that I can also make enquiry and get back to you or the Assessing Officer.
In this connection we would further like to mention that all transactions were made by account payee drafts or cheques and the loan creditor’s PAN has already been mentioned on the loan confirmation, (Annexure 1)
you may kindly direct the Assessing Officer to examine the case in the light of the above facts and if necessary may make further enquiry including verification from the Assessing Officer of the loan creditor. you are requested to give direction to the Assessing Officer not to treat the loan as cash credit.
Without prejudice to the foregoing, I would like to submit that in any event the amount of the said loan cannot be considered as cash credit for the assessment year in question as the loans were taken in the financial year ……….
- Proposed disallowance of Commission Payment :
The proposed direction for making disallowance of commissions to the extent of Rs.…………………...is not warranted as :
The identity of the commission agent has been established by providing his address and PAN.
The nature of services rendered by the agent is indicated on the correspondence and the Commission bills sent by the agent.
The payments have been made by account payee demand drafts. The copies of relevant papers are enclosed herewith and marked as annex…………………….
In view of the above, you would appreciate that merely due to, absence of written agreement with the commission agents or due to my client’s alleged failure to produce the commission agents, is not warranted. It may be mentioned that despite our written request on ……………, the Assessing Officer, has not issued notice u/s 131 to the said commission agents to compel their attendance. you will appreciate that the preliminary onus of proving genuineness of the commission payment has already been discharged by my client and in absence of any adverse material against my client, the proposed addition is totally unwarranted.
Moreover, it has been held by the courts that written agreement is not essential if the relevant entries appear in the books of account. So far producing the agents is concerned, my client cannot force them to attend, and without issuing notice u/s 131 to them as requested by my client the adverse inference is not called for.
Under the facts and circumstances mentioned above, you will appreciate that the directions proposed to be issued to the Assessing Officer are not warranted.
you are also requested to afford an opportunity of hearing, so that the stand of my client can be further explained before you with reference to relevant documents and evidences.
Thanking you
Yours faithfully
………………………..
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