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2017 (1) TMI 1399 - AT - Income TaxDisallowance of payment of commission - Held that:- There is enhancement of rate of commission from 2.5% to the rate of 3.25%; secondly, some of the commission agents are also the relatives of the assessee. Such a basis drawn by the AO for making the disallowance cannot be sustained for the reason that, the Ld. CIT(A) has clarified that overall rate of commission paid is @ 3% on the total turnover and not 3.25% and the commission has been paid uniformly to all the parties including the relatives. Out of 11 party, only 2 are relatives, therefore, it cannot be held that any unreasonable payment have been made to the relatives as compared to the outsiders. Such an ad-hoc disallowance of payment of commission made by the AO cannot be sustained and finding of the CIT(A) is thus, affirmed. - Decided in favour of assessee. Addition u/s 40(a)(ia) - Held that:- Following the decisions of the Hon'ble Delhi High Court in Landmark Townships Pvt. Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT] we hold that in case the recipients have included “interest income” in their return of income, then no disallowance should be made. Accordingly the AO is directed to verify the same and take remedial measures after giving a reasonable opportunity of being heard to the assessee. The assessee is also directed to produce the relevant documents before the AO.
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