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TMI Blog2016 (3) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER SUDHANSHU SRIVASTAVA, JM The present appeal has been preferred by the Department against order dated 29.2.2012 passed by the Ld. CIT(A)-XXIII, New Delhi for Assessment Year 2008-09. 2. The facts of the case are that the assessee is an individual engaged in the business of export of engineering goods to USA and gulf countries under the name and style of M/s Vortex Systems. The only dispute is with regard to the disallowance of commission amounting to ₹ 1,04,08,243/- paid to Mrs. Rakhi Arora . 3. The assessee had incurred commission expenses of ₹ 1,04,08,243/- in AY 2008-09, which was paid to Mrs. Rakhi Arora under an agreement appointing Mrs. Rakhi Arora as agent for canvassing and promoting orders for sales of castings and machine parts in USA and for realization of sale proceeds. 4. The AO made disallowance by making reference to similar disallowance in AY 2006-07. The observations of the AO in paragraph 8 are extracted here under: 8. The facts of the current year case is no way different from that of A.Y. 2006-07 except that the assessee has made available a copy of agreement but he has completely failed to prove as to what was th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd verify the same. We, therefore, restore the issue regarding factors of services alleged to have been rendered by Mrs. Rakhi Arora back to the file of the AO for his fresh adjudication, after examining all the evidences, documents and papers, that have now been filed by the assessee before us, in course of which he shall provide reasonable opportunity of being heard to the assessee. The assessee shall produce all these details and evidences before the AO for his examined and verification. We order accordingly, thus ground No. 1 raised by the assessee is restored back to the file of the AO for his fresh adjudication. 6. Subsequently, in pursuance of directions of Tribunal, AO accepted the claim of commission vide order u/s 254/143(3) dated 19.11.2012 for AY 2006-07. 7. In the year under consideration, the Ld. CIT (A) after detailed consideration of facts and order of ITAT (for AY 2006-07) accepted the claim of commission vide paragraph 5.2 of the appellate order dated 29.02.2012. Findings of Ld. CIT (A) are extracted as below: 5.2 It may be seen from the assessment order, that the disallowance of claim of commission has been made principally on the grounds that evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. DR submitted that the mere existence of an agreement between the assessee and its selling agent or payment of certain amounts as commission, does not bind the Assessing Officer to hold that the payment was made exclusively and wholly for the purpose of assessee s business. The Ld. DR submitted that the Ld. CIT (A) had erred in deleting the addition. He also reiterated that the Ld. CIT (A) had erred in admitting additional evidences under Rule 46A of the Income Tax Rules, 1962 without providing opportunity to the Assessing Officer. 10. The Ld. AR on the other hand supported the order of the Ld. CIT (A) and also filed a synopsis. 11. We have heard the rival submissions and carefully perused the relevant material placed on record. We find that the issues disputed by the Department have been addressed by the Ld. CIT(A) in para nos. 4 to 5.2 of his order which are being reproduced below for ready reference:- 4. I have carefully considered the written submissions made on behalf of the appellant and perused the assessment order. I have also carefully gone through the order of the CIT (A) and of the ITAT for the Assessment Year 2006-07. The CIT(A)XXIII, vide order dated 16.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vortex Schedule WF Rev34_100407.xis Subject: FW: VortexSchedule WFRev34_ 100407 Rajesh, Please mark your shipments in Blue on a weekly basis and return back by Wednesday every week Return by Wed. 10/10 The parts highlighted in Red are the critical parts, please advise status on each. What are you going to do to catch up on the negative quantities? We will wait for your reply. Please advise status on the following parts: 40676- When shipping by Air? What is your plan to catch up on the negative quantities? 101860- You have 30 pcs scheduled for Oct 20- Do not ship- We will not take- (No requirements) 130001000C- You have an extra 40 pcs scheduled in red for October- Do not ship! Push out to November. 101861- You are short 16 pcs in Sept. When will they ship? Will we get in Oct? 034001110S- You are short 15 pcs in Sept. When will they ship? Will we get in Oct?. 122054- None scheduled for Oct. When will they ship? Will we get in Oct? 122056- You are short 30 pcs in Oct. When will they ship? Will we get in Oct? How will you catch up on the negative qty? 122058- You are short 40 pcs in Sept. When wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es rendered, and constitutes an expenditure deductible from the profits of the business. Accordingly, the appellant succeeds at ground of appeal No 1. The remaining grounds of appeal are general/consequential in nature and require no separate adjudication. 12. On a careful consideration of the findings by the Ld. CIT (A) as above mentioned, we are of the considered opinion that the assessee has discharged his onus regarding the commission on both the counts viz. (i) that the payment was actually made; and (ii) that the payment was made for the purpose of business. As far as the issue of allowing additional evidence to be submitted before the Ld. CIT(A) is concerned, the Ld. CIT(A) has given a specific finding in Para 5.1 of the impugned order that, the appellant has certified that all the evidences relied upon were provided to the Assessing Officer during assessment proceedings . Therefore, on an overall consideration of the facts of the case, we are not inclined to interfere with the findings recorded by the Ld. CIT (A). Hence we dismiss ground nos. 1 2 of the Department. Ground no. 3 being general in nature is not being adjudicated upon. 13. In the result, the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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