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Issues:
- Disallowance of commission paid to Mrs. R.M. Engineer - Disallowance of travelling expenses Disallowance of Commission Paid to Mrs. R.M. Engineer: The appeal was against the AAC's confirmation of disallowances made by the ITO regarding commission paid to Mrs. R.M. Engineer. The ITO noted discrepancies in the commission payments and the lack of evidence supporting the payments. The ITO observed that Mrs. R.M. Engineer had not actually received any commission as per her statement, and the assessee himself admitted that no commission had been paid to her. The ITO further found inconsistencies in the accounts related to the commission payments. The AAC upheld the disallowance, stating that the agreements between the assessee and Mrs. R.M. Engineer lacked genuineness due to the appellant's ignorance about the financial affairs. However, the ITAT found substance in the appeal. Upon reviewing the agreements and statements, the ITAT concluded that the ITO misread the statements made by Mrs. R.M. Engineer and the assessee. The ITAT found that Mrs. R.M. Engineer had indeed facilitated business dealings for the assessee, contradicting the ITO's observations. The ITAT noted that the commission amount was credited to her account, and the agreements supported the commission payments. Therefore, the ITAT deleted the disallowance of commission payments. Disallowance of Travelling Expenses: Regarding the disallowance of travelling expenses, the ITO disallowed a portion of the claimed expenses as he deemed them personal in nature. The AAC confirmed a disallowance of Rs. 2,000 out of the total claimed expenses. However, the ITAT disagreed with the AAC's decision. The ITAT noted that the assessee maintained vouchers for all expenses and that the ITO did not question the verifiability of the expenses. Therefore, the ITAT reduced the disallowance of travelling expenses from Rs. 2,000 to Rs. 1,000. Overall, the ITAT partly allowed the appeal filed by the assessee, overturning the disallowance of commission payments to Mrs. R.M. Engineer and reducing the disallowance of travelling expenses.
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