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2019 (1) TMI 737 - ITAT JAIPURDisallowance of payment of commission - Held that:- During the year under consideration, the Assessing Officer undertaken the exercise of enquiry and verification of the claim of the assessee. It is settled proposition of law that the onus is on the assessee to establish that the expenditure is incurred wholly and exclusive for the purpose of business. In order to establish the claim of expenditure wholly and exclusively lend out for the purpose of business, the assessee is required to produce supporting evidence to show that the expenditure was incurred against the services rendered by these persons. We find that, though the assessee has filed confirmation from the persons and the payment was made after deduction of TDS, however, when the AO has issued the summons to ten persons, none has appeared before the Assessing Officer and only three persons responded to the summons issued by the AO. As far as enquiry conducted by the AO in respect of the persons who whom summons were issued it was brought on record that the assessee has claimed the expenditure without any agreement with any of the parties and further some of the parties as noted by the Assessing Officer has not filed return of income. The fact that the amount was transferred at the fag end of the financial year in the accounts of these parties and immediately thereafter was withdrawn again shifting the burden on the assessee to prove the claim of expenditure. Therefore, to the extent of the expenditure on which the Assessing Officer has conducted enquiry, the assessee failed to disprove the enquiry conducted by the Assessing Officer. Since the Assessing Officer has not conducted any enquiry in respect of the remaining parties, therefore, we restrict the disallowance to the extent of the amount paid to the ten persons in respect to whom the Assessing Officer has conducted the enquiry. Accordingly the disallowance made by the Assessing Officer is restricted only to the ten persons and the remaining disallowances made by the Assessing Officer without conducting a proper enquiry is deleted. As clarified that once the assessee has filed the relevant documents in support of the claim and the Assessing Officer has conducted enquiry in respect of the part of the claim to disprove the documents filed by the assessee then so far as the claim which has been supported by the documentary evidence and has not been disproved by the Assessing Officer through a proper enquiry, the same cannot be disallowed. - Appeal of the assessee is partly allowed.
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