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2014 (7) TMI 1112 - AT - Income TaxDisallowance of brokerage commission - assessee failed to furnish details whatsoever about the recipients of the commission - Held that:- local people have created a problem in the land for which agreement was entered into by the assessee . It is stated that local people have buried a dead body in the land and they wanted to use the land as burial ground andas the company has already paid ₹ 50,00,000/- as advance and to get back the advance money without any loss and to avoid any criminal action, compromise through local politicians and brokers was arrived at and in the process commission was paid to R.Santhakumar and A.Y.Nasser. These facts were not placed before the Assessing Officer in the course of assessment proceedings and for the first time, the assessee made these submissions before the Commissioner of Income Tax (Appeals). The genuineness and the necessity of the payment of such higher brokerage commission is not established beyond doubt. - Matter remanded back. Disallowance made under section 40(a)(ia) on the brokerage commission paid - Assessing Officer held that TDS deducted on commission which is paid into Government account from Baskaran’s TAN number cannot be treated as TDS payment made from the assessee company - Held that:- TDS was deducted on behalf of the company by the Managing Director in his individual capacity and Mr. M. Baskaran also filed indemnity bond dated 29.12.2010 wherein it is stated that TDS has been deducted on behalf of the company M/s.Baskara Constructions Pvt. Ltd. and also that he has not claimed any TDS nor he will make such claim in future. Therefore, Commissioner of Income Tax (Appeals) accepted that payments are not to be disallowed under section 40(a)(ia) of the Act. - TDS deducted by Mr. Baskaran, Managing Director in his individual capacity on behalf of the company can be treated as compliance of deducting TDS by the company for the purpose of section 40(a)(ia) of the Act. Thus, disallowance cannot be made on this ground especially when the Managing Director has given an indemnity bond stating that TDS was made on behalf of the company and he has not claimed any credit for such TDS nor he will make any such claim in future. - Decided partly in favour of Revenue.
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