2023 (7) TMI 1197 - AT - Income Tax

Addition on account of commission expenses u/s 37 - selection for scrutiny u/s 143(2) - HELD THAT - As complete details of the respective parties to whom the commission was paid and the rate at which commission was paid and the details of service rendered by those parties for which commission was paid was not filed and therefore, the addition made by the AO was found to be justifiable by the CIT(A). The same is found to be without any ambiguity, particularly in the absence of any assistance rendered by the assessee before us. The same is hereby upheld. Thus, the appeal preferred by the assessee is found to be devoid of any merit and hence, dismissed. Unexplained investment - no cogent document was filed by assessee - HELD THAT - As order passed by the Ld. AO, confirmed by the First Appellate Authority, the Ld. AO noted that the appellant failed to submit monetary trail of earlier years closing balance of investments to substantiate its claim that it had invested in three companies as mentioned hereinabove The status whereof remained unchanged before the First Appellate Authority. Needless to mention that source of such investment made by the assessee was not demonstrated neither proved by the assessee. Hence, in the absence of any assistance rendered by the assessee, the order passed by the authorities below, is found to be just and proper so as to warrant interference - Decided against assessee.

Summary

Issues Involved:
The judgment involves issues related to addition of commission expenses under Section 37 of the Income Tax Act for Assessment Years 2012-13 and 2015-16.

For Assessment Year 2012-13:
The appellant failed to appear during the hearing, leading to the matter being proceeded with ex parte. The issue pertained to the addition of commission expenses of Rs. 52,79,599, which were disallowed by the assessing officer and confirmed by the First Appellate Authority due to lack of details and justification provided by the appellant. Despite additional evidence filed during appellate proceedings, including agreements with various companies, the authorities found the addition just and proper, upholding the decision. The appeal was dismissed for lack of merit.

For Assessment Year 2015-16:
Similar to the previous year, the appellant did not attend the hearing, resulting in confirmation of the assessing officer's order by the First Appellate Authority. The issue revolved around unexplained investments totaling Rs. 64,60,000, which the appellant failed to substantiate with proper documentation or monetary trail of earlier years' investments. The source of these investments remained unproven, leading to the addition of the amount to the total income of the assessee. The order was upheld as just and proper due to the lack of assistance and evidence provided by the appellant. Consequently, the appeal was dismissed.

Conclusion:
Both appeals of the assessee were dismissed, with the judgments affirming the decisions of the assessing officer and the First Appellate Authority in disallowing the claimed expenses and adding unexplained investments to the total income for the respective assessment years.