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TMI Blog2014 (5) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... ing been made to specified parties u/s 40A(2)(b) - The fact that payments are through a/c payee cheques, payees are assessed to tax, TDS has been deducted, relevant details filed, have not been disputed - unless a specific payment is pointed out to be non-genuine or not incurred for the purpose of business, the business expenditure cannot be disallowed on ad hoc basis – thus, there is no reason to interfere in the order of the CIT(A) – Decided against Revenue. - ITA Nos. 438/DEL/2010 - - - Dated:- 28-4-2014 - Shri R. P. Tolani And Shri J. S. Reddy,JJ. For the Appellant : Ms. Y. Kakkar, DR For the Respondent : Sh. Suresh Kumar Gupta, CA ORDER Per R. P. Tolani, JM This is Revenue appeal. Sole Ground read as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence to substantiate the claim of such huge commission. AO on estimate disallowed an amount Rs. 13,12,935/- being 25% of expenditure on commission. 2.1. Aggrieved, assessee preferred appeal before the CIT(A), who deleted the disallowance by observing as under: In addition to above the assessee company has submitted over whelming evidences evidencing the genuineness of the expenses incurred. The assessee company has submitted a chart showing that all the agents are assessed on the records of the Department, their PAN and copies of the returns have been filed showing that all these persons have included these payments in their incomes and the same has been assessed and accepted in their respective hands. Payments to all these persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is a matter of record tht the assessee has been paying commission in past also and no disallowance has ever been made and therefore, keeping in view the totality of facts and circumstances of the case, the impugned disallowance is contrary to law and facts and the same is deserves to be delete and I hereby delete disallowance of Rs.13,12,935/- made by the Ld. AO. 2.2. Aggrieved, revenue is before us. 3. Ld. DR contends that from the order of AO it is clear that assessee did not file agreements executed for commission payment, basis thereof and the reasons for steep increase in the commission when the turnover has increased only by about double amount. Ld. CIT(A) s findings are pleaded to be contradictory in as much as in Para 9 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that any payment is to related parties. In such eventualities no ad hoc disallowance can be made out of expenditure which has been incurred wholly and exclusively for the purpose of business. For holding that payment was not genuine and not incurred for business purposes, the AO has to point out the specific payment which is to be disallowed. Therefore, the order of CIT(A) is justified. Besides, similar issue arose in subsequent years i.e. A.Y. 2007-08 2008-09 in ITA nos. 4503 4504/Del/2010 wherein the ITAT vide order dated 27-12-2010 has upheld the CIT(A) s order deleting the ad hoc additions out of commission by following observations: In these circumstances, we are of the view that no sufficient reason has been shown by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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