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TMI Blog2018 (11) TMI 1843X X X X Extracts X X X X X X X X Extracts X X X X ..... -compliance to the summons issued to Section 131 - Statute provides for relevant remedial measures thereon - AO without resorting to such measures, cannot proceed to disbelieve the claim of commission paid by the assessee when the same are supported by various documents and confirmed by the said parties. In the instant case, the primary onus has been duly discharged by the assessee proving the claim of commission payments made by the assessee. There is absolutely no reason for the AO to doubt the veracity of the said transactions. Admittedly none of the commission agents were relatives of the assessee or interested parties with the assessee so as to allege some mala fide on the part of the assessee. Hence, in our considered opinion, there is no case made out by the ld AO to treat the commission transactions as ingenuine transactions in these facts and circumstances. Disallowance of sales promotion, telephone expenses and motor car and travelling expenses - Assessee vehemently contends that no disallowance can be made on the ground that there is an element of personal use of telephone and motor car in the case of a Limited Company as there cannot be any personal use - HELD THAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and for the Assessment Year 2011-12, the commission agents have received the same. In reply to these notices, these parties have directly confirmed to the Assessing Officer, that they have received commission for the sales done through them. Thereafter, the Assessing Officer issued notice u/s 131 of the Act, summoning the parties for personal appearance. Some of these notices were returned unserved. Thereafter the Assessing Officer directed the assessee to produce these commission agents before him for examination. All the parties except one were produced before the Assessing Officer for, the Assessment Year 2011-12. The party which could not appear before the Assessing Officer was Sugam Vinimay Pvt. Ltd. The Assessing Officer disallowed the commission made on the ground that the assessee could not prove the services rendered by these commission agents. He relied on the following judgments:- a) Vishnu Agencies P. Ltd.; Calcutta High Court (117 ITR 823) b) Assam Pesticides and Agro Chemical; Gauhati High Court (1997) (227 ITR 846) c) Lachminarayan Madanlal; Hon ble Supreme Court (1972) (86 ITR 439) 3.1. On appeal, for the Assessment Year 2011-12, the ld. CIT(A) deleted the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds were sold through the said commission agent; the evidence of payment by cheque, the Tax deducted, service tax charged and the bank statements and producing the copy of the agreement with the commission agent does not prove that the service was actually rendered. Hence, the action of the AO is confirmed. This ground of appeal is dismissed. 3.2.1. For the Assessment Year 2011-12, the revenue has filed this appeal and for the Assessment Year 2010-11, the assessee filed this appeal on the issue of allowability of commission paid. The other issues raised by for the Assessment Year 2010-11 in the assessee s appeal pertain to ad-hoc disallowance of certain expenses. The revenue has raised one more ground for the Assessment Year 2011-12 related to disallowance u/s 40(a)(ia) of the Act. I.T.A. No. 1266/Kol/2016 Assessment Year: 2010-11 I.T.A. No. 316/Kol/2016 Assessment Year: 2011-12 M/s. Sudarshan Paper Board Pvt. Ltd 4. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- 5. We first take up the issue of disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the recipient have found their way back to the assessee some way or the other. This being the case, AO cannot summarily reject the commission payment to Sugam Vinimay as 'shyam transaction', even though the agent did not respond to his summon. It is well settled law that once the assessee has discharged the primary onus, AO cannot hold a transaction bogus without bringing any material evidence on record to the contrary. In view of such, balance addition of ₹ 21,90,181/- is also deleted. I.T.A. No. 1266/Kol/2016 Assessment Year: 2010-11 I.T.A. No. 316/Kol/2016 Assessment Year: 2011-12 M/s. Sudarshan Paper Board Pvt. Ltd 5.1. The ld. D/R, could not point out any infirmity in these findings of the ld. CIT(A). hence we uphold the same. For similar reasons for the Assessment Year 2010-11, the disallowance of ₹ 9,05,612/-, made for the sole reason that the party has not been produced before the Assessing Officer, is hereby deleted. The assessee filed all the requisite details referred above in support of the genuineness of the claim and identity of the party. No disallowance can be made merely because the party has not appeared in person before the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n paid by the assessee when the same are supported by various documents and confirmed by the said parties. In the instant case, the primary onus has been duly discharged by the assessee proving the claim of commission payments made by the assessee. There is absolutely no reason for the ld AO to doubt the veracity of the said transactions. Admittedly none of the commission agents were relatives of the assessee or interested parties with the assessee so as to allege some mala fide on the part of the assessee. Hence, in our considered opinion, there is no case made out by the ld AO to treat the commission transactions as ingenuine transactions in these facts and circumstances. We hold that mere non- appearance of the said commission agents in person before the Ld. AO would I.T.A. No. 1266/Kol/2016 Assessment Year: 2010-11 I.T.A. No. 316/Kol/2016 Assessment Year: 2011-12 M/s. Sudarshan Paper Board Pvt. Ltd not make the transaction of payment of commission as ingenuine. Hence, we hold that the Ld. CIT(A) had rightly deleted the disallowance of commission made by the Ld. AO. Accordingly, ground nos. 2 to 4 raised by the Revenue are dismissed. 6. Applying the propositions of law in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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