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2013 (1) TMI 816 - AT - Income TaxDisallowance of commision expense and travelling expense - Held that:- The assessee claimed 10% commission on sale of fire fighting vehicles to Director of Fire and Emergency Services, JandK which is an undertaking of Government of Jammu and Kashmir (JandK), Srinagar - A.O. disallowed the claim of assessee on the ground that commission was not paid for the purpose of business - the assessee failed to furnish any evidence in support of the claim that commission was paid against the services rendered - settled law that mere payment itself would not entitle the assessee to deduction of such commission unless the same is proved to be paid for commercial consideration and expended wholly and exclusively for the purpose of business. The onus of proof is always on the assessee - When supply of goods is made to Government Departments, commission is not allowable unless it is established that commission was paid for services other than services related to supply of goods to Government Department - Hence commission expenditure in respect of goods supplied to Government Department can not be said to be an expenditure laid out wholly and exclusively for the purpose of business and secondly it would be disqualified under explanation to section 37(1) as being opposed to public policy As regards the traveling expenses claimed by the assessee, it pertains to Commission Agent - Since the commission payment itself is disallowed as non-genuine, therefore, there is no question of allowing traveling expenses on Commission Agent since the expenditures were not incurred wholly and exclusively for the purpose of business - decided in favor of Revenue
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