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TMI Blog2016 (7) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... , we are unable to agree with the submission of the assessee even though the assessee made the commission payment by way of cheques and deducted the TDS and tax paid to the Government by the recipients is not a conclusive evidence to come to the conclusion that the persons have rendered the services for improvement of business of the assessee. Therefore, in the absence of any evidence on the services rendered by the above said persons to the assessee company, the ld. CIT(A) has rightly confirmed the disallowance made by the Assessing Officer. - Decided against assessee. - I.T.A.No.1778/Mds/2015 - - - Dated:- 6-7-2016 - Shri Chandra Poojari, Accountant Member and Shri Duvvuru RL Reddy, Judicial Member For The Appellant : Shri N. Muth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the business of trading in bullion and manufacturing and selling of jewellery. The assessee filed its return of income for the assessment year 2011-12 on 24.12.2011 declaring total income of ₹.1,69,700/- and later the assessee filed revised return on 31.03.2012 declaring total of ₹.4,84,042/-. The case of the assessee was selected for scrutiny and notice under section 143(2) of the Income Tax Act, 1961 [ Act in short] was issued on 16.05.2013. In response thereto, the assessee filed all details. The case of the assessee is that the assessee company has also entered into a contract with M/s. R.S. Gold for managing the day to day trading activities in the commodity exchange for various clients on account of M/s. R.S. Gold who i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the commission was made for the purpose of the business of sister concern of the assessee and factually did not relate to the assessee s business. Therefore, the Assessing Officer was of the opinion that the expenditure of ₹.26,06,098/- was not wholly and exclusively expended for the purpose of assessee s business. Accordingly, he disallowed and added to the income of the assessee. 4. The assessee carried the matter in appeal before the ld. CIT(A). After considering the submissions of the assessee, the ld. CIT(A) partly confirmed the order of the Assessing Officer by observed as under: 7. I have gone through the submissions made by the appellant and also the order of the Assessing Officer. The Assessing Officer in his orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings; the appellant furnished the details of the TDS certificates and the transactions done by their clients and also the details of commission payments. 8. I have examined the details of commission payments with the nature of trade done by the clients along with KYC Norms. As seen from these details, the appellant company has made payment of ₹ 4,50,000/- in the month of March to Shri R. Chandrasekar, HUF. The appellant company could not furnish any evidence to show that Shri R. Chandrasekar, HUF has introduced any clients for the company to make commission payment of ₹ 4,50,000/-. It is clearly established in law that the nature of services rendered by persons receiving the commission has to be established for claiming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted and paid. The commission recipients are assessed to income tax and also offered their income in their return of income and filed before the Assessing Officer. He further submits that the Assessing Officer has not been looked into the same and disallowed the expenditure without any valid reason. 6. On the other hand, the ld. DR strongly supported the order passed by the authorities below. 7. We have heard both sides, perused the materials on record and gone through the orders of authorities below. The main contention of the Department is that the assessee could not produce any evidence for the services rendered by the said three persons/agents. The burden heavily lies on the assessee to establish that the said persons/agents hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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