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TMI Blog2016 (2) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... arged onus cast on the assessee for claiming the expenses U/s 37 of the Act. The rate of commission was not comparable with the line of business of rate of commission paid. Therefore, we uphold the order of the ld CIT(A). - Decided against assessee - ITA No. 226/JP/2014 - - - Dated:- 11-1-2016 - SHRI T.R.MEENA, AM SHRI LALIET KUMAR, JM For The Assessee by : Shri P.C. Parwal and Shri Rajesh Agarwal (CA For The Revenue : Shri Kailash Mangal (JCIT) ORDER PER T.R. MEENA, A.M. This is an appeal filed by the assessee against the order dated 10/01/2014 of the learned CIT(A)-II, Jaipur for A.Y. 2008-09. The effective grounds of appeal are as under:- 1. Under the facts and circumstances of the case, the CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amilies. It was quite an unusual phenomenon. This payment of commission in a particular sale was not justifiable in the sense that the commission was paid to nine different persons at different rates on one single sale. These circumstances indicated that the payment of the commission was claimed simply in order to reduce the tax incidence. Therefore, he held that payment of commission was not genuine. The ld Assessing Officer gave reasonable opportunity of being heard on this issue. The assessee replied vide letter dated 26/11/2010, which has been reproduced by the Assessing Officer on page 3 and 4 of the assessment order. After considering the assessee s reply, the ld Assessing Officer held that the copy of agreement, which is on plain pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the persons working on the commission basis regularly bring customers to the seller. Had this been a genuine transaction then these persons would have definitely brought some other buyers also to the business premises of the assessee. These all circumstances clearly indicate that the claim of commission payment of ₹ 10,70,000/- was not genuine but an arrangement to reduce the tax incidence. Accordingly, he made addition of ₹ 10,70,000/- in the income of the assessee. 3. Being aggrieved by the order of the ld Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed the addition by observing as under: 3.3 I have considered the facts of the case; assessment order and appellant s written subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re submission of the appellant is on the existence of these parties and payment by cheque. Appellant has not attempted to explain with evidence as to what were done by these persons for which they were paid 13.5% commission. The argument made by the appellant that there was huge margin in this export sale and therefore this much commission was paid is not evidenced by any fact. The profit margin computed by the appellant separately for Musket export and other exports is without any basis. Even otherwise, this is not relevant in the absence of rendering of services by these parties. The expense is allowable only when it is incurred wholly and exclusively for the purpose of business. By not submitting any evidence with regard to the services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat family member cannot be part of any transaction. The assessee deducted TDS on commission and paid to the government account on 29/05/2008, which was very well in time as required by the law and much before scrutiny proceeding. Therefore, he prayed to allow the appeal. 5. At the outset, the ld DR has vehemently supported the order of the ld CIT(A). 6. We have heard the rival contentions of both the parties and perused the material available on the record. The assessee was specifically asked to justify the service rendered by the group of these nine persons and to submit the evidence in respect of rendering service before the Assessing Officer as well as ld CIT(A) but no details or evidence were submitted before them. Even before us ..... X X X X Extracts X X X X X X X X Extracts X X X X
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