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TMI Blog2013 (12) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... d as many as four grounds of appeal, but the effective ground is in respect of disallowance of traveling allowance of Rs.34,160/- and second ground is in respect of addition enhanced by the CIT(A) to the extent of Rs.5,70,000/- as against the addition made by A.O. for Rs.71,940/- being 10% commission expenses. 3. The brief facts of the case are that the assessee is a proprietary concern engaged in trading of vehicles & spare Parts, commission & whole seller of mobile phones. The assessee produced the books of account before the A.O. which were examined by the A.O. The A.O. noticed that the assessee has debited traveling expenses of Rs.3,41,598/- and Rs.7,19,409/- on account of commission expenses. The A.O. found that the assessee has claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey were friends of the assessee with whom even no formal agreement was executed for providing services in selling of vehicles. 6. The CIT(A) found that the commission paid to the following persons has not been found to be allowable because the expenditures were not incurred wholly and exclusively for the purpose of business :- (CIT(A) Page No.23) Name of Person Amount (Rs.) Sanjay Vaishy 40000 Krishna Kumar Goyal 50000 Narendra Vaishy 50000 Sanjay Vaishy 60000 Anuradha Vaishy 1200000 Rajeev Agarwal 150000 Naveen Kumar Goyal 100000 Total 570000 7. The submission of the assessee was that the commission was paid on account services rendered by the concerned persons. The ld. Authorized Representative submitted that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese parties were assessed submitted by the assessee and same has been reproduced by the CIT(A) in his order at page No.4. The assessee has also deducted tax at source on the commission payment. The details filed by the assessee has been reproduced by the CIT(A) at Page No.4 of his order. Similarly, the nature of services rendered by these parties, the detailed chart have been filed which has been reproduced by the CIT(A) in his order at Page No.5. 9. The main reason for enhancing the addition by the CIT(A) was that the assessee has failed to establish the service rendered by these parties. In this regard, it is relevant to see nature of business activities of the assessee. The assessee is an authorized dealer of vehicles, buses and others ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the same parties. In this line of business it is sufficient if it has been pointed out that institution Hindustan College of Technical Education, Holy Public School, Agra, Holy Nursery Public School, Agra and Holy Nursery Public School, Agra requires such buses and convincing them not necessary that the head of the institution having vehicles in which the assessee is dealing as suitable to them. Therefore, merely on examination of CIT(A) by the concerned parties who purchased the vehicles denied about the broker the commission paid cannot be disallowed particularly when the assessee has established that considering their nature of business such as liaisoning or services are necessary for the purpose of business and the parties have ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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