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2010 (6) TMI 621 - AT - Income TaxService agents - payment of commission disallowed - Held that:- The commission payments have been proved by the assessee not only by internal evidence in the form of books of account, but also by external evidence in the form of TDS particulars + confirmation letters received from the payees. It is to be further seen that the assessee has achieved a high amount of turnover which justifies the payment of commission to procure business. Further the assessee has also received commission from their principal of an amount almost equal to commission payments. Thus CIT(Appeals) is justified in accepting the bona fides of these payments as necessary expenditure incurred for the purpose of carrying on of the business.In favour of assessee. Unexplained cash credit - as per AO advance stated to be received from the said party has not been proved by the assessee - Held that:- The circle of the transaction has been established by the assessee by providing the different links of the transactions with documentary evidence. The amount was in fact received by the assessee as advance against supply of machineries. This position is proved by the materials evidencing the sale of machineries to M/s. Kartika Metal Crushers and adjustment of the advance against the billed amount. The accounts itself show that the advance amount has been subsequently converted into sale proceeds of the assessee which has been accepted by the AO as part of the turnover of the assessee. In favour of assessee. Purchase disallowance - Held that:- As the assessee had already produced invoices from M/s. Hydrotech Tamilnadu for a sum of Rs. 1,40,400. It was on the basis of the above evidence, the Commissioner of Income-tax (Appeals) has granted commensurate relief to the assessee. In favour of assessee.
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