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TMI Blog2013 (10) TMI 1235X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 2.5% of the total turnover has to be excluded. In respect of the unproved loan credits, the appellate authority deleted the addition except in respect of two credits totalling Rs.25,600/-. 4. The Revenue preferred an appeal before the Appellate Tribunal and the Tribunal confirmed the first appellate order. The Revenue has filed this appeal inter alia contending that none of the vouchers produced by the assessee in respect of payment of commission to agents contained the signature of the recipients. The same was the situation in respect of commission paid to two relatives. In the absence of any evidence to prove the payment of commission, allowance given by reducing 2.5% of the total turnover as against 1% given by the assessing authority is absolutely without any basis and therefore the decisions of the appellate authority and the Tribunal was perverse. 5. In respect of loan credits it is contended that no corroboratory evidence was adduced by the assessee in the form of confirmation letters to prove the loans, before the Assessing Officer. The 1st appellate authority should not have relied upon a document produced by the assessee at the appellate stage without complying with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1% of the total turnover. The Assessing Officer found that though notice was issued to few of those persons there was no response and ultimately found that even though there is a practice of giving commission, normally the rate of commission is 0.5%. But having regard to the fact that the petitioner has only started business, 1% of the total turnover is treated as commission payment. 9. Before the appellate authority, the 1st ground considered was regarding the sales commission. It is held that it is an accepted trade practice for businessmen dealing in sanitary equipments, ply woods and floorings etc. to pay commission to the Plumbers who introduce customers to business establishments. It is found that to achieve a sales turnover of Rs.2.22 Crores, the appellant has to pay certain percentage of commission and the percentage of commission paid is not on the higher side. The 1st appellate authority also found that the commission paid by other agencies cannot be compared with the commission paid by the respondent herein as the respondent was marketing a new product and there was stiff competition. Having regard to the said finding it was found that restricting the claim at 1% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f money and thereafter the burden is on the assessee to rebut the same and if he fails to rebut it, it can be held against the assessee that it was a receipt of an income nature. Another judgment relied upon is Commissioner of Income-Tax v. United Commercial and Industrial Co.(P.) Ltd. [(1991) 187 ITR 596]. This is a judgment of the Division Bench of Calcutta High Court. The proposition is that mere production of the confirmation letters before the Income Tax officer would not by itself prove that the loans have been obtained from those loan creditors or that they have creditworthiness. 14. It is argued that as far as commission is concerned, there is no basis for allowing commission at 2.5%. No evidence was adduced by the assessee to prove the said fact. No materials are relied upon by the appellate authority to come to such a conclusion. Hence the said finding by the 1st appellate authority and the Tribunal is perverse and is liable to be set aside. 15. In regard to the deletion of other income especially Rs.10 lakhs paid by Mr.C.C.Thampi it is argued that no evidence was produced before the Assessing Officer and the appellate authorities had committed serious error in relying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements had been given and merely because they have not given any confirmation letter, the said credits cannot be excluded appears to be wrong. The same is the situation with reference to the credit of Rs.10 lakhs. The assessee had indicated that the said amount was sent by Sri.C.C.Thampi through bank account and the particulars of bank account were also produced. The only reason for not deleting the said amount was non- production of confirmation letter. The same was produced at the appellate stage. The said confirmation letter was taken as evidence by the appellate authority and the said act had been confirmed by the Tribunal. Apparently, deletion of various amounts which were reflected as credits in the books of the assessee was purely a factual matter which was required to be considered by the fact finding authorities. Though the Assessing Officer had decided against the assessee on those points, the appellate authority had accepted the explanation given by the assessee and had deleted the said amount from the income as the evidence available was sufficient to prove the source. This apparently is a finding of fact which was confirmed by the Tribunal and for that reason we do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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