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TMI Blog2018 (3) TMI 2051X X X X Extracts X X X X X X X X Extracts X X X X ..... AO and who have replied and confirmed to have received the commission. The parties examined have also confirmed to have rendered services to the assessee for which they have earned the commission. If some parties have not been produced by the assessee, the assessee cannot be paralized for the same. It is the duty of the AO to summon such parties u/s 131 of the Act, which power vest with the AO and not with the party. In such circumstances and facts of the case, no addition or any enhancement can be made by the AO or the CIT(A) and additions and enhancements so made are directed to be deleted. Thus ground no.1 of the assessee is allowed. Disallowance of expenses not for business purpose - AO disallowed 10% of the amount claimed by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmission expenses of Rs.18,22,663/- in the P & L A/c vide questionnaire dated 30.07.2013 the assessee was asked to furnish the details of commission paid. In response the assessee filed details on 20.01.2014 along with their copy of accounts and confirmations. The above details were looked into and again vide order sheet entry dated 27.02.2014, the assessee was asked to establish the genuineness of commission expenses paid. In response, the assessee filed computation of income in some cases and copy of ITR in other cases or commission receivers on 05.03.2014. Simultaneously, to verify the above details and confirmations submitted by the assessee, notice u/s 133(6) were issued on 21.02.2014 to the following persons: * Rakhi Datta * ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed commission. 5. In most cases, they did not even know the name of the assessee. 6. In some cases, the commission receiver had not even visited the shop of the assessee. 7. Even when enquiries were conducted u/s 133(6), 50% of the replies were not received. All the above observations were confronted to the assessee on 07.03.2014 but the only support assessee had with him in respect to payment of commission is that payment has been made through bank. In this regard, the case of Nemi Chand Kothari v CIT (2003) 264 ITR 254 (Gau) is quoted, wherein it has been observed that it cannot be said that a transaction which take place by way of cheque is invariably sacrosanct. Even though the decision is on a different issue, the ratio is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termine for himself whether the commission said to have been paid to the selling agents or any part thereof is properly deductible under section 37(1). In a recent decision in the case of Sachneider Electric India Ltd. vs CIT (2008) 304 ITR 0360, the Hon'ble Jurisdictional High Court has dismissed the appeal of the assessee where on the similar facts and circumstances, deduction on account of commission payment was sought. In view of this, the claim of commission to the extent of 30% of the total expense incurred i.e. Rs.5,46,799/- is squarely disallowable u/s 37(1) of the Income Tax Act, 1961 on account of non-genuineness of payment. Also being satisfied that assessee has filed inaccurate particulars of income in filing of return of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the assessee had made most of the payments in cash for which no evidence has been placed on record and no record for incurring the expenses for business purpose has been maintained and, therefore, the AO disallowed 10% of the amount claimed by the assessee which was confirmed by the ld. CIT(A). 7. I have heard the rival contentions and perused the facts of the case. Since the assessee has not placed on record any evidence to adduce the authenticity of expenses claimed for the purpose of business and therefore personal element cannot be ruled out. Therefore, in the circumstances and facts of the case I find no infirmity in the order of ld. CIT(A) who has rightly confirmed the action of the AO. Thus ground no. 2 and 3 of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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