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TMI Blog2016 (7) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... of profit. The assessee has also not discharged before us the correlation between the business activities conducted by him and the commission paid which therefore, signifies that the payment of commission has nothing to do with the business. One of the argument raised was that assessee was paying commission in earlier years and the same should be allowed. We are not informed whether the AO made enquiry in earlier years or not. In this year the AO made enquiries and found that no services were rendered by the persons who were paid commission. We are convinced that there is no justification for payment of commission. Under the circumstances, we uphold the order of the learned CIT (A) in this regard and this issue of commission payment is dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch amount by the party concerned. Both the conditions are not prevalent in the facts mentioned in the order of the AO. Further, for invoking the deeming provision, the onus rests on the AO and not on the assessee. The AO himself mentioned that the liability was outstanding for more than 3 years which facts confirms that the amount does not partake the nature of income of the assessee for the A.Y under consideration. Therefore, this addition is deleted. - ITA No.663/Hyd/2015 - - - Dated:- 1-7-2016 - Shri B. Ramakotaiah, Accountant Member and Shri Partha Sarathi Chaudhuri, Judicial Member For The Assessee : Shri A.V. Raghuram For The Revenue : Shri K.E. Sunil Babu, DR ORDER Per Shri Partha Sarathi Chaudhuri, J.M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived of ₹ 48,200 without appreciating the facts. 6. The learned CIT(Appeals) erred in confirming the addition made ujs.41(1) of outstanding creditors of ₹ 22,790 in suspense account. 7. Any other ground that may be urged at the time of hearing . 2. Brief facts of the case are that the assessee, an individual, engaged in the business of trading in industrial valves, pipe fittings and pipes under the name and style of a proprietary concern M/s Indian Hardware Mart, filed its return of income on 28.09.2011 for A.Y 2011-12, declaring a total income of ₹ 50,63,282. Thereafter, the case was selected for scrutiny and notices u/s 143(2) and 142(1) were issued and the assessment was completed by the AO with total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troduced by them nor services rendered by them to the assessee warranting commission payments, the AO disallowed the commission payments as being not incurred for the purpose of business. 4. The learned CIT (A) observed that the AO has conducted a thorough inquiry as to the factum of services rendered and allowability of the commission expenses claimed by the assessee. The CIT (A) held that from the AO s inquiry, the claim of the assessee regarding services rendered by the parties who received commission stands disproved. Assessee has failed to discharge the onus of proving that the expenditure claimed is wholly and exclusively for the purpose of business. The claim of the assessee is that the payments are made by way of cheques and TDS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 but the assessee included the sales of March, 2011 and later part of February 2011 also in the sales committed by him, which indicates that there is no correlation between sales and commission paid. One of the argument raised was that assessee was paying commission in earlier years and the same should be allowed. We are not informed whether the AO made enquiry in earlier years or not. In this year the AO made enquiries and found that no services were rendered by the persons who were paid commission. We are convinced that there is no justification for payment of commission. Under the circumstances, we uphold the order of the learned CIT (A) in this regard and this issue of commission payment is dismissed. 6. Ground No.5 relates to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g towards suspense a/c were called for. The assessee submitted that the suspense a/c will be credited only when the direct amount is deposited in the bank and till the name of the customer is not traced it will be kept under suspense. The AO noticed that this amount of ₹ 22,790 is shown as payable since more than 3 years. That the AO observed it is for the assessee to prove that the amount payable was at the end of the year still payable and that the liability to pay still continues. AO held that when the customer is not traceable, there are no claimants for this amount. Therefore, this amount of ₹ 22,790 is brought to tax u/s 41(1) as deemed income of the assessee. The learned CIT (A) upheld the addition. That on this issue we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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