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TMI Blog2012 (8) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... , just because on few of the export invoices commission was paid at 6% - against revenue. Disallowance of expenditure - Held that:- As assessee has not produced supporting evidence no reason to interfere with the orders of AO and the CIT (A) - there was similar disallowances in all those years also - against assessee. - ITA No.4546/Mum/2010 - - - Dated:- 29-6-2012 - Shri I.P. Bansal, And Shri B. Ramakotaiah, JJ. Assessee by: Shri Deepak Tralshawala Department by: Shri P.B.K. Menon, DR O R D E R Per B. Ramakotaiah, A.M. This is an assessee s appeal against the orders of the CIT (A)- 30 Mumbai dated 9.3.2010. Assessee has raised the following four grounds: i) As regards adhoc disallowance out of commission paid agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Rs.22,98,454/- during the immediately preceding year, we recapitulate the following: a) One of the major customer, in view of the difficulty faced in realising dues, resorted to finding new customers for seeking assessee s products. In view of the higher risk involved in dealing with new parties, the said major customer increased the rate of commission charged by him to assessee. b) A details invoice-wise statement of the commission paid has been furnished with our letter dated 30-11- 2007. c) Please appreciate the fact that the rate at which commission is to paid is the business decision of the principal and its agent. It is an absolute commercial decision taken after considering all plausible business exigencies as well as contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, along with commission, expediency, statement showing invoices along with rate of commission and also the fact that the parties are un-related to assessee and the commission was paid at arms length price. However, the CIT (A) after considering the submissions made by assessee, confirmed the addition by stating as under: 4. I have carefully perused the assessment order, submissions of the A.R and the facts of the case. The main issue involved is with regard to disallowance of commission expenses of Rs.46,65,963/-, out of total sum of Rs.66,65,963/- claimed by the appellant. For the year under consideration, the said commission has been incurred by the appellant in connection with exports made through various agents viz., (i) Sun I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t bearing on the case of the appellant. In the absence of any material evidence in support of the claim for the payment of such high commission, I am not inclined to accept the reasons put forth by the appellant. Further I find considerable force in the argument and reasoning given by AO for making the disallowance out of commission expenditure. Therefore, the disallowance of Rs.46,65,963/- out of total commission of Rs.66,65,963/- made by AO is confirmed. The grounds of appeal are dismissed . 6. The learned Counsel referred to the details filed before AO and submitted that since invoices itself contain the rate of commission and what assessee has booked in the books of account is a commission converted in foreign exchange in its books. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the rate of commission. It was also not in dispute that the rate of commission has been decided at the time of shipment of goods and is reflected in the corresponding shipping bill. It is also on record that the statements showing agent-wise commission with respective invoices are also placed before AO. There is also no dispute that the commission agents have rendered the services and commissions are being allowed in earlier years. In view of these facts, we are unable to understand why the commission was disallowed on adhoc basis, just because on few of the export invoices commission was paid at 6%. It is not uniformly paid at 6% as was considered by AO and the CIT (A). There are many invoices in which commission was only 1% and 2% depen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.1,67,482/- was disallowed, on the reason that no supporting evidence was produced. Out of the telephone expenses, 10% of the expenditure was considered, as assessee has not maintained telephone register and there could be personal expenses. The CIT (A) confirmed the same. 10. After considering the rival arguments and considering the nature of the expenditure, we do not see any reason to interfere with the orders of AO and the CIT (A). In fact, as seen from the earlier years orders, there was similar disallowances in all those years also. Keeping these facts in mind and the nature of expenses and the reasons made out by AO, we reject the grounds as raised by assessee. 11. In the result appeal filed by assessee is partly allowed. Or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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