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TMI Blog2019 (10) TMI 1514X X X X Extracts X X X X X X X X Extracts X X X X ..... not having any experience in stock broking business and she could not substantiate that what were services she had rendered to the assessee on the basis of which the assessee has paid commission to her. Considering the facts and circumstances, we do not find any error in the decision of ld. CIT(A) by holding that the recipient of the commission could not establish rendering of services to the assessee. Therefore, this ground of appeal of the assessee is also dismissed. Disallowance of salary expenses as outstanding during the year under consideration - HELD THAT:- We observe that neither the assessee has fully substantiated the claim of outstanding salary expenses with relevant evidences nor the assessing officer has fully disproved the claim of the assessee that she has not deployed any employee during the year under consideration. Considering the above facts, we are of the view that it will be reasonable to restrict the disallowance to the extent of 50% of the outstanding salary to the amount of Rs. 4 lacs. Accordingly, this ground of appeal of the assessee is partly allowed. Short term capital gain as business income - HELD THAT:- We observe that ld. CIT(A) has partly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 8. The learned C1T(A) has erred in law and on facts of the case in confirming action of the Id. AO in levying interest u/s 234A/B/C/D of the Act. 9. The learned CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in initiating penalty u/s 271(l)(c) of the Act. 3. The fact in brief is that return of income declaring income of Rs. 5,01,080/- was filed on 29th Sep, 2008. The case of the assessee was subject to scrutiny assessment and notice u/s. 143(2) of the act was issued on 31st August, 2001. The assessment u/s. 143(3) of the act was finalized on 25th March, 2010 and total income was determined at Rs. 32,04,281/- after making various additions. The remaining facts of the case are discussed while adjudicating the various grounds of appeal of the assessee as under:- Ground No. 1(Confirming disallowance of Rs. 7,26,151/- being 75% of commission expenditure of Rs. 9,68,201/-) 4. During the course of assessment, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 11,93,300/- and shown an amount of Rs. 8 lacs as salary payable under the head sundry creditors. On query by the assessing officer, the assessee has furnished the details of employees to whom amount of salary payable and stated that the same was outstanding on account of performance bonus payable to employees in addition to the basic salary. The assessing officer has asked the assessee to produce the employees for verification, however, the assessee has submitted that most of the employees have left the job and there whereabouts at present was not known. On perusal of the detail submitted by the assessee, the assessing officer has also noticed that assessee has furnished incomplete addresses of the employees and therefore the same were not traceable. Consequently, the assessing officer has disallowed the amount of salary payable to the amount of Rs. 8 lacs u/s. 37 of the act. 7. Ground No. 5 6 is against the decision of ld. CIT(A) treating the short term capital gain as business income. 8. During the course of assessment, the assessing officer noticed that assessee has shown short term capital gain and long term capital gain, however, as per the audit report, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... native contention made by the assessee before the ld. CIT(A). 13. We have heard both the sides and perused the material on record. In respect of claim of commission expenses of Rs. 9,68,201/- to 774 parties, it is noticed that all the payments were made in cash and assessee had failed to substantiate the claim of payment with relevant supporting evidences. The assessee has neither substantiated the services rendered by the recipient of the commission nor furnished the addresses of the recipient of commission parties as a result the genuineness of the commission payment could not be established. Under the circumstances, we consider that the ld. CIT(A) has reasonably restricted the disallowance to 75% of the aforesaid expenditure of Rs. 9,69,201/- claimed to be made to 774 parties, therefore, we do not find any infirmity in the decision of ld. CIT(A). 14. Regarding claim of payment of commission of Rs. 9,35,000/- to Smt. Padmaben M. Vora who was the mother in law of the assessee, it is observed that in spite of giving a number of opportunities by the assessing officer and ld. CIT(A), the assessee has failed to demonstrate the services rendered by her mother in law against which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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