9911796707
TMI Blog2015 (10) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission paid to Sh. Vipin Malhan is on the sales executed by him from 20.06.2001, the date of agreement between the company and Sh. Vipin Malhan. The sales effected by the company for the period up to 19.06.2001 has been reduced from the total sales while calculating the commission paid to Mr. Vipin Malhan. The order of the AO dated 28.02.2005 under appeal and the Remand Report submitted by him vide F.No. ACIT/Circle/Noida/Remand Report/06-07 dated 20.07.2006 have been examined very carefully. The AO has not expressed any doubt on the genuineness of the agreement executed between the company and Sh. Vipin Malhan and also on the system of payment of commission. The AO has not expressed any doubt on the services rendered by Sh. Vipin Malhan to the company. The AO has worked out commission on the figure of ₹ 2,40,24,500/- being income from web packages alone while the company has calculated the commission on reconciled sales. The copy of the statement showing working of the commission paid to Mr. Vipin Malhan had been sent to the AO along with the reply of the AR for his comments. However in the Remand Report submitted by the AO, find that the AO has not made any adverse comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessment order is found to have stated that the assessee was dealing in multi-level marketing of educational web packages and this was the first year of the assessee company. The company it was stated was incorporated on 8th June 2001 with Registrar of Companies, Delhi and started the online operations and registration w.e.f. 25.6.2001. The income received it was stated was from sale of online education and other programs. The earning from these has been disclosed at ₹ 2.62,80,06,337/- and other income of ₹ 5,10,119/- totaling to ₹ 2,67,90,186/- on which net profit had been disclosed at ₹ 35,32,2S2/- which gave the N.P. rate of 13.18%. 3. The record further shows that in order to verify the expenses, the AO issued notice u/s 133(6) to 39 associates wherein some of the notices returned back with the comments no such person and in some of them no reply was received. This fact was confronted to the assessee who stated that the associates to whom commission has been paid do not necessarily continue as member after one year. It was further stated that as per the terms and conditions of the company the membership has to be renewed and the commission i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear that the assessee company did not discharge its onus to prove the genuineness of the commission paid even to Rajyanti to whom the commission paid is ₹ 40,000/- who is stated to be a regular associate; which resulted in reduction the tax incidence. Accordingly, so-called commission is disallowed at ₹ 9,10,500/- and added to the income of the assessee. Addition of ₹ 9,10,500/- 4. Aggrieved by this, the assessee came in appeal before the First Appellate Authority. Reiterating the submissions advanced before the AO, it was submitted that only the persons who continue to renew their status remain connected and the persons who had not renewed their status as associates do not remain in touch with the assessee company. Accordingly it pleaded that it is difficult for the assessee to obtain their latest addresses. It was again re-iterated that the commission it was stated is automatically generated in the account of the assessee on the event of sale on which tax had been deducted and payment was made by account payee cheque. Reliance was also placed on the confirmations received from 8 out of the 10 persons referred to by the AO. The CIT(A) confronted these d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of any cogent argument or reason canvassed before us by Revenue remand cannot be directed. In order to so direct atleast some shortcoming in the nature of evidences filed and consideration should have been pointed out so as to justify such a demand. A matter cannot be remanded for the mere asking. A perusal of the impugned order at page 8 shows that the major commission payment out of these 8 people has been paid to Sri Padma Sinha, Sri Nirmal Singh, Sri Daljit Singh Sandhu in whose case PAN details were made available and in the case of the remaining 5 people the confirmations alongwith their telephone numbers and address details were provided. Apart from that it is seen that the admitted fact consistently on record is that the commission has been paid to the persons after deduction of tax at source by way of account payee cheque. 8. Accordingly in view of these material facts and evidences on record which remain unrebutted and where no infirmity in the confirmations filed has been pointed out, we find no good reason to interfere with the finding arrived at in the impugned order. Being satisfied by the reasoning and finding, Ground No.-1 of the Revenue is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me shows that on behalf of the assessee, referring to the agreement it was submitted that the web packages was initially sold @ ₹ 5,000/- per packages upto 21.01.2002 and @ 5,500/- per package thereafter. The payment of commission to Sh.Vipin Malhan, it was stated was based on this agreement as upto the sale of 2000 web packages, commission was to be paid @ 10% of the total receipts and in case the sale of 2000 web packages was not completed within six months, the entitlement to commission was only @ 8%. The commission it was stated was to be paid by the company on a monthly basis after deduction of tax at source. It was stated that Sh.Vipin Malhan was paid, the commission of ₹ 29,53,002/- on the total receipts from the sale of web packages and the further payment of ₹ 3,37,500/- over and above the commission was calculated on sales and this payment was made as a channel partner being the associate of the company. The payment it was stated was paid in terms of the Agreement. In support of the said claim, reconciliation of the payment of commission was filed which also included its maintenance charges. The assessee further supported its claim by way of following su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.2,39,69,500/- Rs.2,39,69,500/- Add:- Annual Maintenance Charges Rs.20,97,103/- Less receipts up to 19.06.2001 ₹ 15,400/- Rs.20,81,703/- ₹ 20,81,703/- Advance received from customers ₹ 39,75,357/- Total Receipts Rs.3,00,26,560/- Less:- Other receipts on which commission not payable Rs.4,96,540/- Net receipts for the period 20.06.01 to 31.03.02 Rs.2,95,30,020/- Commission paid to Sh. Vipin Malhan @ 10% Rs.29,35,002/- Add:- Commission paid as an associate of the company On down line sales Rs.3,37,500/- Rs.32,90,502/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of ₹ 2,40,24,500/- being income from web packages alone while the company has calculated the commission on reconciled sales. The copy of the statement showing working of the commission paid to Mr. Vipin Malhan had been sent to the AO along with the reply of the AR for his comments. However in the Remand Report submitted by the AO, I find that the AO has not made any adverse comments on the working of the figure of the sales as arrived at and the commission of ₹ 29,35,002/- worked out at @ 10% of the total sales of ₹ 2,93,50,020/- besides the commission of ₹ 3,37,500/- paid as an associate member of the company. In view of the above it is held that the AO was not justified in making an addition of ₹ 8,88,052/- on this account to the income of the appellant. This addition of ₹ 8,88,052/- is accordingly deleted. The appellant gets relief of ₹ 8,88,052/-. 14. Aggrieved by this, the Revenue is in appeal before the Tribunal. The Ld. Sr. DR relies upon the assessment order and the AR of the assessee relying upon the impugned order submitted that in the absence of any objection pointed out by the Ld. Sr DR, the material and evidence on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
