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2018 (10) TMI 1284 - ITAT AHMEDABADDisallowance of commission expenses u/s. 40(A)(2)(b) - unreasonable and excess payment of expenses - Held that:- The assessee has substantiated the payment of commission with supporting materials, debit notes etc along with the details of services rendered for which commission was paid. It is also undisputed facts that these two persons were also paid commission along with salary in the past years. The provision of section 40(A)(2)(b) provide for disallowance of only the excessive or unreasonable expenditure and not the entire expenditure. AO has failed to disprove supporting material furnished by the assessee in support of the aforesaid commission payment. AO has also failed to substantiate with relevant material that commission payment made by the assessee is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment has been made. AO to disallow the entire commission expenses u/s. 40A(2)(b) of the act without substantiating and restricting the disallowance to the unreasonable and excess payment of expenses is not correct. - Decided in favour of assessee.
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