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TMI Blog2012 (9) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... sales and in the absence of any material to substantiate that the payment of commission as claimed by the assessee are bogus, the disallowance cannot be made and sustained - in favour of assessee. - I.T.A.No.2835/Del/2011 - - - Dated:- 31-7-2012 - SHRI A.N. PAHUJA AND CHANDRA MOHAN GARG, JJ. Appellant by: Dr. B.R.R. Kumar, Sr. DR Respondent by : Shri S. Krishna ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER This appeal has been preferred by the Revenue against the order of the CIT(A)-XIX, New Delhi dated 24.3.2011 for the AY 2003-04 by which the Commissioner of Income Tax(A) deleted the disallowance of Rs.11,18,679/- out of commission payments as claimed by the assessee. 2. The only ground raised by the Revenue in this appeal reads as under:- On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting disallowance of Rs.11,18,679/- out of commission payment claims by not deciding on merits the contentions of the Assessing Officer in the assessment order and by ignoring that the assessee was not able to establish during the assessment proceedings the genuineness of the transactions leading to payment of the commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the assessee. The undersigned is satisfied that to the extent of Rs.1149679/- the assessee has concealed/furnished inaccurate particulars of its income for that penalty proceedings u/s 271(1)( c) have been initiated separately. 4. The assessee approached the Commissioner of Income Tax(A) and also filed an application under Rule 46A of the Income Tax Rules, 1962 on 03.01.2007 with regard to disallowance made towards payment of commission and a remand report was called form the Assessing Officer. The Assessing Officer submitted remand report dated 02.04.2007 and on receipt of copy, the assessee filed a rejoinder dated 03.05.2007 to the remand report. Considering the facts and circumstances of the case, the Commissioner of Income Tax(A) admitted additional evidence filed by the assessee and also considered the following written submissions to the assessee:- "13. The Assessee company is in the business of manufacturing and selling UPS systems, as in the past years. Since the Assessee's business operations are predominantly based out of Delhi, it relies upon third parties for the purpose of procurement of sale contracts, and against such orders as are received, commission i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b. DETAILS OF PAYMENT - Cheque numbers in respect of every payment made to each party, along with details of tax-deduction there-upon were before the Assessing Officer. When these particulars are seen together, the factum of payment of commission becomes undeniable. The only residuary allegation that could remain would be to say that the payment of commission is bogus. It is settled law that the onus to prove something bogus is upon the person who alleges as much. On the facts of this case, the Assessing Officer does not even make out that allegation. He simply holds that the payments remain unconfirmed. If confirmation was what he sought, the Assessing Officer had two courses available to him to obtain them, viz., by making enquiries with the parties themselves, or by verifying through the Income-tax Department's own TDS Wing, the trail of payments and TDS credit claims. The Assessing Officer did neither. It is also not his case that payments made to these parties by the Assessee found their way back into the Assessee's coffers from them. The Assessing Officer is not invoking the provisions of section 69, but making a disallowance of a claim under section 37(1). In respect of a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of commission of Rs.15,000/- paid to Sudesh Chandla Rs.16,000/- paid to Mega Computers. These two amounts cannot be allowed. In view of the above discussion, there is no case for disallowance of balance expenditure of Rs.11,18,679/-. Confirmed: Rs.31,000/- Relief: Rs.11,18,679/- Accordingly, ground no. 5 is partly allowed. Accordingly, the ld. Commissioner of Income Tax(A) confirmed the addition of Rs.31,000 and deleted the disallowance of balance expenditure as payment of commission of Rs.11,18,679/-. Hence, this appeal by the Revenue before this Tribunal. 6. We have heard rival arguments of both the parties and considered the material placed before us on record and also the paper book filed by the assessee spread over 35 pages. On bare reading of impugned order, we note that the ld. Commissioner of Income Tax(A) relied on the judgement of Hon ble Jurisdictional High Court of Delhi vide order dated 04.01.2011 delivered in ITA No.3 of 1999 in the case of Friends Clearing Agency (P) Ltd. vs CIT II wherein their Lordships held that ITAT ought to have followed a consistent principle in the subsequent assessment years as well. 7. Ld. DR submitted that when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax(A) delivered the impugned order. 10. We have carefully perused the written submissions of the assessee before the ld. Commissioner of Income Tax(A) available from page 1 to 7 of the paper book wherein the assessee submitted the particulars of parties, details of payment and TDS certificates related to the payment of commission on sales in question. 11. The AR relied on the judgment of Hon ble Karnataka High Court in the case of Ritz Hotels Ltd. vs CIT194 ITR 614(Kar) wherein their Lordships held that the commission payable by the assessee therein was adjusted to a subsequent year by means of a resolution passed by the Board of Directors of the assessee company and disallowance of the commission made by the Assessing Officer was deleted by the Hon ble High Court and held that the burden lay on the Revenue to establish that no services were rendered. In the present case, the Assessing Officer could have made inquiry from the parties on the names and addresses submitted by the assessee and details of payment made through account payee cheque but no efforts had been made by the Assessing Officer. 12. The assessee s representative also drew our attentio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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