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TMI Blog2018 (10) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A)-7, Abad confirming the disallowance of commission exp. of Rs. 15,50,035/- is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the explanations furnished and the evidence produced by the appellant. 2.1 The Ld. CIT(A) has grievously erred in law and or on facts in in confirming the disallowance of commission exp of Rs. 15,50,035/-. Though, the appellant had produced necessary material and the parties were also rendering services as employees of the firm and such commission was paid in earlier year. 2.2 That in the facts and circumstances of the case as well as in law, the Id. CIT(A) has grievously erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommission has been paid to the following two persons:- Sr. No Name Sales in Kg. Commission Paid Commission paid @ 1 Dipak J. Amin 29975.00 752135 Rs.25 per kg. 2 Jignesh J. Patel 26705.00 797900 Rs.30perkg. Total 15,50,035/- The assessing officer found that the above two persons were on the payroll of assessee and were covered u/s. 40(A)(2)(b) of the act. The assesse explained that M/s. Dipak J. Amin has been looking after production and environment treatment plant and also participated in the exhibitions at various places and brought new customer for the company. It was explained that Shri Jignesh Patel has been looking after the production and packaging department. He has also carried out m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant. It is also true that the net profit and the gross sales have decreased substantially during the year under consideration. The appellant has not been able to give instances and details of the orders procured by Shri Dipak Amin and Shri Jignesh Patel to justify the commission of Rs. 15,50,035/- paid to them. Moreover, both these persons were employees on the payroll of the appellant firm and have also been paid huge salary on account of their regular work. In view of all these facts, I am inclined to agree with the AO that the payment of commission was excessive and the reasonableness of the same could not be justified by the appellant. The disallowance of commission expenses of Rs. 15,50,035/- made by the Assessing Officer is confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove supporting material furnished by the assessee in support of the aforesaid commission payment. The assessing officer has also failed to substantiate with relevant material that commission payment made by the assessee is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment has been made. We consider that the decision of the assessing officer to disallow the entire commission expenses u/s. 40A(2)(b) of the act without substantiating and restricting the disallowance to the unreasonable and excess payment of expenses is not correct. In view of the above facts and circumstances we are not inclined with the decision of the ld. CIT(A), therefore, the appeal of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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