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TMI Blog2022 (5) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... rs to be stretching things a bit too far. It is not a sheer coincidence that three of the seven persons to whom commission was paid happened to be Directors of the Appellant and the remaining four were relatives of such Directors. Particularly, with the Appellant not being able to demonstrate their special expertise in procuring IOF from the markets in India, the AO appears to be justified in disallowing the commission insofar as it was paid to the said seven persons. The AO has been objective on the issue As all the persons to whom commission was paid were either Directors of the Company or their relatives. None of them is shown to have any expertise in procuring IOF from the Indian markets for enabling the Appellant to meet the purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt during the AY in question was engaged in the business of manufacturing and sale of P.P. woven sacks meant for packing of fertilizer and cement etc. It filed its return of income for the AY in question on 10th September, 2010 declaring a total income of Rs.1,47,09,311/-. The return was picked up for scrutiny and the statutory notice was sent along with a questionnaire to the Appellant by the Assessing Officer (AO). 4. While examining the claims of the Appellant, the AO raised a query regarding payment of commission to the tune of Rs.53,49,790/- and asked the Appellant to justify it. The explanation offered by the Appellant was that it had obtained an export order for supply of Iron Ore Fines (IOF). The supply was time bound and had to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Appellant had admitted that of the 7 individuals to whom the commission had been paid, 3 were Directors of the Company and 4 were relatives of the Directors. The Appellant had failed to bring on record their expertise to render services and also what services had in fact been rendered to enhance the business of the Appellant. Merely because TDS had been deducted, would not justify allowing the entire amount as claimed towards commission. Accordingly, the appeal was dismissed. 8. This Court has heard the submissions of Mr. R.P. Kar, leaned counsel for the Appellant and Mr. R. S. Chimanka, learned Senior Standing Counsel for the Department-Respondents. 9. Mr. Kar relies on the decision of the Supreme Court in J.K. Woollen Manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the seven persons to whom commission was paid happened to be Directors of the Appellant and the remaining four were relatives of such Directors. Particularly, with the Appellant not being able to demonstrate their special expertise in procuring IOF from the markets in India, the AO appears to be justified in disallowing the commission insofar as it was paid to the said seven persons. The AO has been objective on the issue. It is not as if the entire amount claimed by the Assessee as payment towards commission was disallowed. Of the sum of Rs.53,49,790/- claimed, the AO in fact allowed the payment of commission of Rs.23,41,245/- to two entities. 13. The decision in J.K. Woollen Manufacturing (supra) appears to have turned on its own fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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