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TMI Blog2013 (5) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... us of proving the rendering of services is on the assessee for a genuine claim of deduction on account of commission. As the assessee has failed to lead any evidence in respect of services provided by these persons no deduction can be allowed for a sum of Rs. 18.73 lakh as Commission on domestic purchases - Against assessee. Disallowance of Clearing and forwarding expenses u/s 40(a)(ia) - Held that:- As assessee fairly admitted that no tax was deducted at source in respect of payments at Sr.nos.8 and 9 the disallowance u/s 40(a)(ia) was rightly made. As regards item at Sr.nos. 4 and 5, assessee pointed towards certain material showing that these parties obtained certificates from the Department for no deduction of tax at source as additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer observed that the expenditure under this head increased drastically from the preceding year's figure of Rs. 17,95,447. On being called upon to furnish the details in respect of this expense, the assessee made certain submissions and also filed details in respect of commission paid on exports. The Assessing Officer observed that the assessee did not even furnish names of the recipients of commission of Rs. 4.60 lakh. Further, no address or other details were provided in respect of commission of Rs. 38.51 lakh and in respect of the remaining amount of Rs. 11 lakh, the A.O. opined that the circumstantial evidence showed that the commission was not genuinely paid. The learned CIT(A) upheld the assessment order on this issue. 3. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices by these so called commission agents. In spite of that, he relied on certain decisions to canvass a view that notwithstanding there being no evidence of rendering of services, the deduction should be allowed merely on the fact that the payment was made through banking channel. In our considered opinion, the facts of the cases relied on by the learned AR are distinguishable and are not germane to the issue under consideration. It is a fundamental proposition that the onus of proving the rendering of services is on the assessee for a genuine claim of deduction on account of commission. As the assessee has failed to lead any evidence in respect of services provided by these persons, we are of the considered opinion that no deduction ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Civaro Freight I Pvt. Ltd. 53542 -- 53542 10. No party name Bank of India payment 279 dated 16/5/2008 277965 -- 277965 11. Destination 6530 6530(NA) -- 12. B S Clearing 1957 1957 (NA) -- 7592384 4454168 3138220 6. This led to the disallowance u/s 40(a)(ia) to the tune of Rs. 31.38 lakh. When the matter came up before the learned CIT(A), he noticed that in respect of parties appearing in sr.nos.1, 2, 3, 6, 7, 11 and 12 of the above table, no disallowance was called for u/s 40(a)(ia) because the assessee made deduction of tax at source albeit at a lower rate Adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts u/s 40(a)(ia). We, therefore, set aside the impugned order on this score. It is made clear that if it turns out that that the Department in fact issued certificates to these two parties for no deduction of tax at source on the receipts by them and the payment at sr.no.10 was towards purchase and not Clearing and forwarding charges, then no disallowance should be made u/s 40(a)(ia). In the otherwise position, the disallowance be sustained. We, therefore, remit the matter to the file of A.O. for deciding this issue afresh in accordance with our above directions. Needless to say, the assessee will be allowed a reasonable opportunity of being heard. 8. Last ground is against the confirmation of disallowance of traveling expenses to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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