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TMI Blog2018 (5) TMI 1724X X X X Extracts X X X X X X X X Extracts X X X X ..... gh all the facts and evidences and disallowance is based on assumption and presumption, which is unjustified and liable to be quashed. 2. On the facts and in the circumstances of the case ld. AO erred in disallowing the lift maintenance expenses of Rs. 60000.00 U/s 40a(ia) and simultaneously ld. CIT(A) erred in sustaining the disallowance without going through the submission of assessee and recent development of law, which is unjustified and liable to be quashed." 2. Ground No. 1 is regarding disallowance of commission paid. The assessee is engaged in the business of manufacturing and trading of gems and jewellery besides carrying out the job work of jewellery in the name and style of M/s Punita Handicrafts. Upto preceding year, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) enhanced the disallowance by considering the fact that the commission paid to two persons namely Aditya Jain and Trilok Jhalani is @ 2% of the sales whereas the commission paid to these 6 persons was @ 4%. Accordingly, the ld. CIT(A) has disallowed 50% of the commission paid to 5 persons and the entire commission paid to Smt. Kavita Agarwal. Aggrieved by the impugned order of the ld. CIT(A) the assessee filed the present appeal. 3. Before us, the ld. AR of the assessee has submitted that during the course of assessment proceeding, the AO recorded the statement of these persons wherein they have admitted the service rendered to the assessee for sales to M/s Creative Beads, USA. Thus, the AO has not disputed the fact that the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al on record. The Assessing Officer has noted that the assessee has paid the commission to 8 persons as under:- Sr. No. Name of the party Commission paid Remarks 1. Gautam Singh Mehta 331630 For sales to M/s Creative Beads (USA) 2. Vishnu Prakash Agarwal 228645 For sales to M/s Creative Beads (USA) 3. Kavita Agarwal 200426 For sales to M/s Creative Beads (USA) 4. Madhu Jain 228141 For sales to M/s Creative Beads (USA) 5. Trilok Jhalani 54794 For sales to M/s Beauty Gems & Jewellery 6. Gautam Singh Mehta HUF 175694 For sales to M/s Creative Beads (USA) 7. Aditya Jain 268327 For sales to M/s Golden Stone (USA) 8. Sunil Kumar Garg HUF 281581 For sales to M/s Creative Beads (USA) Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arwal did not render any service then the payment of commission to her is not allowable claim. Accordingly, in view of the fact and circumstances of the case when remaining of service and claim of commission to these 6 persons is not free from the bogus claim then the restriction of the claim @ 2% does not require any interference. Hence, we do not find any error or illegality in the order of the ld. CIT(A) qua this issue. 6. Ground No. 2 is regarding disallowance made u/s 40(a)(ia) of the Income Tax Act. The assessee made a payment of Rs. 60,000/- towards lift maintenance expenses on which tax is not deducted at source. The AO disallowed the said expenses by invoking the provisions of Section 40(a)(ia) of the IT Act. On appeal, the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act is applicable only on payable expenses whereas the assessee has already paid the said amount and therefore, no disallowance is called for. The assessee placed reliance on the decision of the Hon'ble Allahabad High Court in caseof CIT vs. M/s Vector Shipping Services (P) Ltd. 262 CTR 545. Since the said issue of paid or payable U/s 40(a)(ia) of the Act has been finally settled by the Hon'ble Supreme Court in case of M/s Palam Gas Service vs. CIT 394 ITR 300 has relied upon by the ld. DR therefore, to that extent, we do not find any error or illegality in the order of the ld. CIT(A). Now before the Tribunal the assessee has raised a fresh plea and placed reliance on various decisions, therefore the issue being purely legal in nature, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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