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TMI Blog2018 (4) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... substantiate any evidence of services rendered by the said person. 2. The learned CIT(A) failed to appreciate that Shri Laxminiwas V, Agarwal was a Director in the assessee company and was rendering various services to the assessee company and accordingly, there was no reason to disallow any commission paid to him. 3. The learned CIT(A) erred in not appreciating the various documentary evidences submitted by the assessee to prove the fact that services were rendered by Shri Laxminiwas V. Agarwal arid therefore, there was no reason to confirm the disallowance of commission paid to him. 4. The learned CITCA) erred in confirming the disallowance of commission or Rs.l,92,992/- and Rs. 4,57 ,510/- paid to Ramesh Chandak (HUF) and Ravin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the company paid commission of Rs. 15,11,800/- to Shri Laxminiwas V. Agrawal, who is the Director of the company and claimed it as an allowable expenditure. The said amount was offered to tax by Shri Laxminiwas V. Agrawal in his return of income. On finding that Shri Laxminiwas V. Agrawal is neither an employee nor there is evidence that services rendered by him for receiving the said commission, AO granted an opportunity to the assessee for substantiating the claim. Assessee filed a written submission informing the AO that Shri Laxminiwas V. Agrawal is duly authorized to receive the commission by virtue of the resolution passed by the Board of Directors right from the start of the business. In support of this claim and allowability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible evidence has been brought on record by the assessee to justify the claim of commission paid except Board's Resolution. Hence, the commission paid to Laxminiwas Vishudas Agrawal is disallowed and added to the total income of the assessee at Rs. 15,11,800/- . . . . . . . . 7. As regards commission paid to Ramesh Chandak, HUF and Ravindra Agrawal, HUF, the assessee has submitted copy of resolution and extract from AGT and it has been stated that as applied to Company and accepted by the Board of directors and by share holders, commission has been paid to HUF's of the directors. It has also been stated that HUFs are regularly doing this business of commission agency since many years. The submission of the assessee have duly been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order, CIT(A) reasoned that when there is no employeeemployer relationship between the company and Shri Laxminiwas V. Agrawal, the onus is on the assessee to demonstrate with evidences the nature and extent of services rendered by Shri Laxminiwas V. Agrawal to the company. The failure to demonstrate the same attracts the disallowance and accordingly, the CIT(A) confirmed the disallowance made by the AO. Further, regarding the allowability of the commission payments made to Shri Ramesh Chandak (HUF) and Shri Ravindra Agrawal (HUF), it is the case of the CIT(A) that the same is not an allowable deduction u/s.37 of the Act as the assessee failed to file the proof in support of rendering of the services by the HUF. Contents of Para 16 of hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble rates. Referring to the said failure of the assessee qua the tax rates applicable to the assessee and the payees, Ld. DR for the Revenue submitted that the matters need to revisit the file of the AO for want of data on the applicable maximum marginal rates and also the applicability of the binding judgment in the case of Indo-Saudi Services (Travel) Pvt. Ltd. 310 ITR 306 (Bom.) 10. After hearing the Ld. DR for the Revenue and after going through the orders of the Revenue available on record, we are of the opinion that the assessee paid commission to Shri Laxminiwas V. Agrawal, Director of the company and the same has the support of the Board's Resolution. In our view this part of the claim is allowable subject to the documentation rela ..... X X X X Extracts X X X X X X X X Extracts X X X X
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