2025 (2) TMI 702 - AT - Income Tax

Disallowance of a commission paid to parties u/s 37(1) - HELD THAT - Assessee has produced the confirmation of all the parties for having received the commission and some of the parties have also confirmed to have rendered the services to the Assessee for which they have earned commission. If some of the parties have not been produced by the Assessee the A.O. cannot be make the addition as it is the duty of the A.O. to summon such parties u/s 131 of the Act and the A.O. made no such efforts. Though the above referred order of the Tribunal in Assessee s own case for Assessment Year 2011-12 2018 (3) TMI 2051 - ITAT DELHI is of the SMC Bench ongoing through the merit of the case we agree with the ratio laid down there on. Appeal of the Assessee is allowed.

Summary

The present appeal before the Appellate Tribunal involved the Assessee challenging the order of the Commissioner of Income Tax Appeals-35 Delhi, which upheld the 100% disallowance of a commission paid to parties under Section 37(1) of the Income Tax Act, 1961 for the Assessment Year 2013-14. The key issues considered in this case were whether the lower authorities had properly considered the evidence provided by the Assessee, whether the decision was made hastily without allowing the Assessee to present relevant documents, and whether the commission payments were genuine.The Assessee contended that the lower authorities did not give due attention to the evidence presented and that the decision was made hastily without considering relevant documents. The Assessee also relied on a previous decision by the Tribunal in their own case for the Assessment Year 2011-12, where similar additions had been deleted. On the other hand, the Departmental Representative argued that there was no agreement between the Assessee and the commission receivers, and the Assessee failed to provide bills or receipts of payment, relying solely on evidence of payment through banking channels.The Tribunal examined the material on record, noting that the Assessee had provided names and addresses of parties to whom the commission was paid, along with accounts and confirmations from all parties. Some parties confirmed rendering services to the Assessee and receiving commission. The Tribunal cited a previous decision in the Assessee's case for the Assessment Year 2011-12, where the Tribunal had deleted similar additions, emphasizing the Assessee's compliance with providing necessary information and the duty of the Assessing Officer to summon parties for verification.Based on the evidence presented and the precedent set in the previous decision, the Tribunal concluded that the Assessee had sufficiently demonstrated the genuineness of the commission payments. The Tribunal found merit in the Assessee's appeal, ultimately allowing the appeal and deleting the disallowance of the commission payment made by the Assessing Officer, which had been upheld by the Commissioner of Income Tax Appeals-35 Delhi.In summary, the Tribunal's decision hinged on the Assessee's provision of evidence, the duty of the Assessing Officer to verify information, and the precedent established in a previous decision related to the Assessee's case. The Tribunal ultimately ruled in favor of the Assessee, allowing the appeal and overturning the disallowance of the commission payment.