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TMI Blog2019 (3) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... ELD THAT:- TDS have been deducted and commission agents have disclosed the commission income in their return of income. There is an increase in sales of the assessee in assessment year under appeal. The commission payment in the past have been accepted by the authorities below. It is also explained that on the same reason, the commission payment have been accepted in preceding A.Y. 2009-2010. These facts, therefore, clearly show that commission payment have been made to the Commission Agents who are unrelated parties and are identified. Genuineness of the commission payment is not doubted. Assessee proved that Commission Agents render services for business purpose of the assessee.- Decided in favour of assessee. Shortage in stock as found by RINL - A.O. noted that assessee is saddled with the consignment work as Agent (Handling Contractor) of RINL - proof of normal business transaction - HELD THAT:- The assessee has filed copy of the ledger account of the principal to show that there was opening balance in this account for the earlier year and that while settling the bills of the assessee for payment of handling charges, the principal has deducted amount in question from the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, trees or standing crops. The A.O, therefore, required the assessee to prove with evidence that the impugned land was used for agricultural purposes by him during the period of two years immediately prior to the date of transfer/acquisition. The assessee explained that land was used for the purpose of agriculture for self-consumption, for which, no details were filed. The A.O, therefore, noted that assessee has not undertaken any agricultural activity on the said land, therefore, assessee will be deprived of the claim of exemption under section 10(37) of the Income Tax Act, 1961, on the amount of compensation of ₹ 80,29,302/-. The A.O, therefore, made the addition on account of business income. 4. The assessee challenged the addition before Ld. CIT(A) and it was submitted that agricultural produce was used for self-consumption and that land was used for agricultural purposes only. In case there was any doubt, direct enquiry could be made from the Revenue Authorities. The Ld. CIT(A) noted that it is mentioned in the sale deed that land under consideration is agricultural land and was purchased for agricultural purposes. The Ld. CIT(A) also noted that assessee has ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned amount on compulsory acquisition of urban agricultural land. The assessee claimed the same amount as exempt under section 10(37) of the Income Tax Act. The assessee filed copy of the sale deed which clearly described the impugned land to be agricultural land and used for agricultural purposes. At appellate stage, as per directions of the Ld. CIT(A), Certificate of Tehsildar was filed who has certified that at the time of acquisition of the land, the land was used for agricultural purposes. The assessee also produced Revenue record to show that land in question was used for agricultural purposes. Thus, sufficient material was produced on record to prove that at the time of acquisition of the land in question, the land was used for agricultural purposes. Thus, assessee satisfied the conditions of Section 10(37) of the Income Tax Act. Therefore, assessee s income is exempt under the said provision. No interference is called for in the matter. We, accordingly, dismiss Ground No.1 of appeal of the Revenue. 8. On Ground No.2, Revenue challenged the order of Ld. CIT(A) in deleting the addition of ₹ 5,14,485/- on account of commission payment. The A.O. noted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the parties are identified and they worked for assessee and paid the taxes on the income. Many case laws were relied upon. The Ld. CIT(A) noted that claim of commission is fully supported by comparative chart of earlier year, payment of TDS, is not doubted and rate of commission is uniform and even the sales have substantially increased and the Agents also disclosed their Commission income in their return of income. None of the parties are related. Genuineness of the payment is not doubted. The A.O. only disallowed part payment. Therefore, there was no justification to make the addition. The Ld. CIT(A), accordingly, deleted the addition. 10. The Learned Departmental Representative relied upon the orders of the A.O. and submitted that the services rendered by the Commission Agent have not been explained. 11. On the other hand, Learned Counsel for the Assessee reiterated the submissions made before the authorities below and referred to Paper Book-94 to 104, which are copies of the commission bills, in which the services rendered by the Commission Agent and the rates of commission are clearly mentioned. He has submitted that Commission Agent render services for the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... damage or loss, for which, it is paid handling charges. It was noted that RINL deducted the above amount from the monthly handling bills of the assessee as stock was found short during physical verification. The assessee claimed the about shortage as expenses. The assessee explained that all the control over material receipts and issues are in the hands of RINL. The material receipt Note are received and signed by staff and officials of RINL and all dispatch slips are issued, passed and signed by the staff and officials of the RINL. The A.O, however, did not accept the same because no FIR or Complaint have been lodged and that the work has to be done by the assessee and not by the principal. The A.O, accordingly, disallowed the above amount under section 37 of the Income Tax Act. 14. The assessee submitted before the Ld. CIT(A) that actually assessee is having stock yard and principal is sending their huge material for stocking, of which, they appoint Handling Agents, who provide facilities of stocking as well as of loading/unloading of material in the yard, after transporting the same mainly from Railway Yard as this is dispatched from far-off destinations. At each stage, weigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e occurred on day to-day basis and such shortage are debited by RINL on estimate basis. Since it is a business routine and normal shortage, therefore, claim of assessee was allowed. The Ld. CIT(A) also noted that there is opening balance under the same head which supports the explanation of assessee that it was a routine shortage. Ld. CIT(A), accordingly, deleted the addition. 15. The Ld. D.R. submitted that shortage is abnormal. It cannot continue for many years. 16. On the other hand, Learned Counsel for the Assessee, reiterated the submissions made before the authorities below and submitted that amount in question is not debited to the profit and loss account, therefore, the same cannot be disallowed. PB-107 is the letter of RINL which certified that the amount in question have been recovered from the assessee on account of shortage. PB-109 and 110 is the ledger account of the principal to show there is a opening balance and that shortage is a debited to the ledger account. 17. After considering the rival submissions, we do not find any merit in this ground of appeal of Revenue. The assessee has filed copy of the ledger account of the principal to show that there was op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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