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2017 (8) TMI 1710 - AT - Income TaxDisallowance of commission expenses - CIT(A) deleted part addition - HELD THAT:- we find that the assessee has submitted detailed evidences like names of the agents, PAN numbers, describing services rendered by the Agents, confirming the transaction, details of the TDS made. In remand report proceedings, the AO issued notice under section 133(6) to these against who appeared before the AO and admitted of rendering services as a receipt of commission from the assessee. We also note that the MPLUN was nodal agency for supply of goods but was not charge as commission instead it was charging service charges as per agreement entered in to between the assessee and it. We also note that the assessee is dealing in supplies of pharmaceuticals products to various states like Orissa, Assam, Meghalaya which are falling in remote areas which is spread over a large geographical area. Therefore, requirement of Representatives for doing such jobs cannot be denied. These commission agents have filed detailed reply before the AO and described the various formalities and services required to be handled by the assessee or representatives of the agents - we are of the considered opinion that the ld. CIT(A) was not justified in deleting only 50% of the commission payments paid to private parties debited to the profit and loss account. We also find that payments made to commission agents are unrelated to the assessee therefore, there cannot be said that the quantum of commission is not justified. Thus as the commission has been paid in respect of service rendered for facilitating the recoveries, giving information of tenders etc. which are not prohibited by law, we are of the view that no disallowance of commission payment is called for. Decided in favour of assessee. Addition u/s 68 - Unexplained cash credit - HELD THAT:- When we analyse the company wise facts then we find that these companies have filed reply to notice under section 133(6) to the AO directly. There are no cash deposit before issue of cheque to the assessee. All the creditors have filed copy of income-tax return acknowledgement, confirmation letters, copies of the bank statements, copies of accounts, acknowledgement of ITRs, computation, audited annual accounts, etc. were placed on record The assessee filed all possible documents before the AO which were also submitted to the AO by the respective companies in response to notices u/s 133(6) of the Act issued during remand proceedings and thus we can safely hold that the assessee discharged its onus lay upon its shoulders to prove the identity, creditworthiness of the creditors and genuineness of the transactions. From the relevant part of the assessment order, we observe that the AO merely proceeded to make addition under section 68 of the Act keeping aside all the relevant documents, which were filed by the assessee and the alleged companies. Accordingly, we have no hesitation to hold that we are unable to see any ambiguity, perversity or any other reason to interfere with the first appellate order which granted relief to the assessee. Hence, we uphold the same. Decided in favour of assessee. Disallowance of amount of interest u/s 36(1)(iii) on addition to building account - assessee has raised loans during the year for capital work in progress of building construction as the building has not been put to use during the year under consideration - HELD THAT:- The perusal of Annexure -C, forming part of Form No. 3 CB (PB- 11& 20) showed that that the assessee had shown addition after 30.09.2006 to building account on which depreciation has been claimed and allowed by the AO. Thus, it is discernible that there is work in progress on account of building construction account; hence, disallowance on account of interest on addition to building account is not justified. Therefore, the AO is directed to delete such disallowance of interest expenses. We order accordingly. This ground of appeal is thus, allowed.
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