9911796707
TMI Blog1981 (7) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... nt papers regarding commission as entered into between the assessee and his mother, Smt. R.M. Engineer. He also examined the lady as well as the assessee. Thus from the perusal of the statement of Smt. R.M. Engineer, the ITO observed that she had actually not received any commission and neither was she aware of total sales, nor the amount of commission received by her. According to the ITO, in her statement she was stated to have received Rs. 10,000 as commission from M/s. Tex Corps in lump sum amount but from the books of account the ITO noted that no commission had been paid to her. The ITO also observed that the assessee had also admitted that no commission had been paid to her. Only commission due to her was credited to her accounts in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk and the expenses had been debited in the books. Hence, the ITO disallowed a sum of Rs. 4000 from travelling expenses being personal in nature. In appeal, the AAC confirmed the disallowance on account of travelling expenses of Rs. 2,000 with the following observations: "4.During the course of the appellate proceedings when I put a casual question to the appellant whether he paid the commission to the three persons separately under three separate agreements or the whole amount was paid to the mother, he replied that there were three separate agreements with the three persons and the mother was paid a sum of Rs. 10,000 and odd. When the actual agreement between the appellant and mother was looked into, it was seen that she alone was to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee, i.e. mother as well as A.K. Jain and Pathak, alongwith other documents and the statements recorded by the ITO. It appears that the ITO misread the statements made by Smt. R.M. Engineer and the assessee. A reading of the statement recorded by the ITO of Smt. Engineer indicates that she was a close friend of the wife of Shri Hansotia, Controller of Kalyanmal Mills an since she was known to her, she used her influence in effecting supplies of synthetic tallows to Kalyanmal Mills, which were being manufactured by the assessee. In reply to question No. 4, she had specifically stated that she used to go to him to promote business, to give orders and of business to Texcorps. In reply to query made by the ITO in respect of the comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sales and thereafter she was to pass over Rs.6,000 each to the two persons out of the commission credited to her account and that is what the assessee has done in the accounts. Thus, the disallowance of payment of commission was not called for by the authorities below. Hence the same is deleted. 4. So far as the disallowance of travelling expenses of Rs. 2,000 is concerned, we do not think there is much scope in the pleas put forth by the ld. counsel for the assessee. Be that as it may, since the assessee maintained vouchers for all such expenses and the ITO has not commented upon the non-verifiability of the expenses, we consider it proper to reduce the disallowance to Rs. 1,000. 5. In the result, the appeal filed by the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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