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TMI Blog2021 (4) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no cessation of liability nor any unilateral entry of writing off. The liability still exists. Therefore the addition should be deleted. 3. The Ld. CIT(A) has erred in disallowing a sum of Rs. 1,75,679/- being 1/10 of expenses incurred in the business of appellant. Ld. CIT (A) has disallowed the expenditure based on his own assumptions and presumptions without any evidence for non-business purposes. Hence, the addition of Rs. 1,75,679/- made by the AO should be deleted.' 4. Without prejudice to Ground No.3, .disallowance of 1/10 of expenses incurred in the business of the appellant is excessive. 5. The above grounds are independent and without prejudice to one another." 3. The revenue has raised the following grounds of appeal in ITA No. 3218/Del/2017 for Assessment Year 2012-13:- "1. Whether on the facts and circumstances of the case, in respect of the addition of Rs. 2,19,48,840/- wherein the assessee has not passed any entry through P&L A/s and has directly shown the payment received in the balance sheet. The Ld. CIT (A) has erred in not appreciating that closure of the appellate proceedings the assessee has neither paid to the sub-dealer nor has returned bac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- was made on account of amount outstanding in the name of Grace Enterprises from whom assessee failed to file any confirmation. Therefore, the AO held that sundry creditor shown by the assessee is not genuine and hence the above addition was made. d. The assessee has debited Rs. 1,38,359/- as telephone expenses, Rs. 4724044/- on tour and travel expenses, Rs. 9,38,909/- on repairs and maintenance and Rs. 2,07,481/- on depreciation on car. The AO disallowed one-tenth of the total expenditure for personal use by the partners amounting to Rs. 1,75,679/-. The assessment was framed at a total income of Rs. Rs. 3,43,35,120/-. 6. The assessee preferred an appeal before the CIT (A). The ld CIT (A) as per order dated 15/02/2017 admitted certain additional evidence filed by the assessee after obtaining the remand report of the AO as well as the rejoinder filed by the assessee. He confirmed the addition of Rs. 7 lakh commission following the order of the ld CIT (A) in case of the assessee for assessment year 2011-12. With respect to the addition of Rs. 2,19,48,840/- he deleted the addition holding that the assessee is merely a pass-through entity, the incentive is actually payable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or breaches this Agreement or the Distributor Agreement, and in respect of a breach capable of being remedied, fails to remedy such breach within 7 days of written notice from EMLPL; (e) If Distributor becomes bankrupt or insolvent, or is unable to pay its debts as they fall due, or enters into any arrangement or composition with its creditors, or has a winding up petition presented against it, or a receiver, receiver/manager or liquidator is appointed, either voluntarily or compulsorily, other than for the purposes of reconstruction; or (f) If Distributor does not purchase the Annual Target Volume during a Contract year." 5. As per the above clause, Exxonmobil Lubricants Pvt. Ltd., has a right to demand immediate payment if the conditions given hereinabove are violated. First Schedule to the Agreement provides that the effective date of MAP Agreement is 01.06.2010 and the maturity date is 31.05.2011. Similarly, there is next Agreement for Rs. 21.25 lac, whose effective date is 1st July, 2010 and maturity date is 30th June, 2011. Similar is the position in so far as the effective and maturity dates of other two Agreements are concerned. Total amount under these four Agreements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to two ladies. 12. The ld AR submitted that the assessee has submitted the payment details, PAN of the recipient and a new fact of the confirmation from the sub-dealer of the assessee that commission was to be paid on their account on sales made to them to two ladies. He therefore submitted that the above commission expenditure has been wrongly disallowed by the lower authorities. He also relied upon the several judicial presidents. 13. The ld DR submitted that for assessment year 2011-12 assessee has paid commission to the same ladies of Rs. 4 lakhs each in that year and after the complete examination of the fact the ld CIT (A) confirmed the disallowances. When the matter reached to the co-ordinate bench, the order of the CIT (A) was confirmed. He submitted that in para 6 and 7 of the order of the ITAT for assessment year 2011-12 in case of the assessee above disallowance is confirmed by ITAT. He stated that the issue is squarely covered against the assessee. 14. We have carefully considered the rival contentions and find that the coordinate bench has dealt with this issue in earlier year as per para number 6 and 7 of that order as under:- "6. Ground No.1 of the assessee& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke such payments and therefore the disallowance was confirmed. We do not find any reason to deviate from the judgment, facts quoted by the ld AR are also duly considered therein. However, in view of any evidence of rendering of any services by the above two persons to the assessee, in absence of any change in facts and circumstances of the case this year, we respectfully following the decision of the co-ordinate bench confirm the disallowances of Rs. 7 lakhs of commission paid to them. n the result, the ground No. 1 of the appeal is dismissed. 16. Ground No. 2 of the appeal is against the confirmation of addition of Rs. 2,27,250/- outstanding in the account of Ms Grace Enterprises. The fact shows that the above amount is outstanding as liability in the books of account of the assessee and it has not been written back. Assessee could not produce the confirmation of those parties. Ld AR the submitted that merely because confirmation is not furnished it does not become a nongenuine creditor. He further submitted that there is no cessation of any liability and the liability is still exists. He further submitted that provision of section 41(1) does not apply in the case because purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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