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TMI Blog2019 (1) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... e for deducting tax at source. Therefore, disallowance made u/s 40(a)(ia) of the Act is uncalled for - Decided in favour of assessee Addition of sales commission - genuineness of the transaction and the purpose of paying sales commission to the two ladies - Held that:- There is no dispute that both the persons are assessed to tax and they have shown the sales commission in their respective return of income. There is also no dispute that the assessee has deducted tax at source as per the applicable rates. Assessing Officer is not the right person to decide which expenditure the assessee should incur in furtherance of his business. Secondly, the statements on oath, recorded by the Assessing Officer, which are placed in the paper book, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,167/-. 2. The CIT(A) has wrongly upheld the addition made by the Assessing Officer of ₹ 6,00,000/- representing the expenditure incurred on the commission. 3. The CIT(A) has wrongly upheld the addition made by the Assessing Officer of ₹ 3,67,103/- out of travelling, conveyance, interest on car loan, vehicle running and maintenance and depreciation on car as claimed by the appellant on adhoc basis. 3. Briefly stated, the facts of the case are that the assessee is engaged in the business of export of automotive under the name and style of M/s Haks International. During the course of assessment proceedings, the A.O observed that the assessee has claimed expenses of ₹ 18.49 lakhs under the head freight on expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act squarely apply on the facts of the case and since the assessee has not deducted tax at source, he made the addition u/s 40(a)(ia) of the Act amounting to ₹ 9,73,167/-. 6. The assessee agitated the matter before the ld. CIT(A) but without any success. 7. Before me, the ld. counsel for the assessee drew my attention to the chart of freight for the year under consideration and pointed out that the amount paid to M/s Velji Dosabhai Sons Pvt. Ltd is nothing but reimbursement of expenses incurred by him. The ld. counsel for the assessee further pointed out that only handling charges amounting to 41,950/- is not reimbursement, since the same is less than ₹ 75,000/-, the same is not liable for deducting tax at source within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 9,73,167/-. 11. Ground No. 2 relates to addition of ₹ 6 lakhs being commission paid to Smt. Vibha Arora and Smt. Uma Rani as sales commission. 12. The Assessing Officer has disallowed the commission paid to these two persons because he was of the opinion that in A.Y 2011-12 similar commissions was claimed by the assessee. The Assessing Officer examined these two persons under oath and after examining them, sales commission paid to these two persons was disallowed. Taking a leaf out of the findings given in A.Y 2011-12, the Assessing Officer disallowed sales commission paid to these two persons. The assessee could not get any relief from the CIT(A) and is, therefore, before me. 13. The ld. AR drew my attention to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer which are placed in the paper book. Firstly, there is no dispute that both the persons are assessed to tax and they have shown the sales commission in their respective return of income. There is also no dispute that the assessee has deducted tax at source as per the applicable rates. 18. The only dispute is in relation to the genuineness of the transaction and the purpose of paying sales commission to these two ladies. In my considered opinion, the Assessing Officer is not the right person to decide which expenditure the assessee should incur in furtherance of his business. Secondly, the statements on oath, recorded by the Assessing Officer, which are placed in the paper book, I find that both the ladies have specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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