Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (1) TMI 569 - AT - Income TaxDisallowance of Commission - commission paid for high seas sales to a firm [(M/s Motilon Synthetics] in which the directors hold substantial interest - AO invoked the provisions of S. 40A(2b) - Held that:- No document has been furnished which would substantiate the rendering of service by the firm to the assessee or any evidence to show that firms were introduced by the firm or the sales were brought in by the firm. From the copy of the letter dated 1.4.2000 appointing Motilon Synthetics as sole selling agent cointain certain conditions to be complied but nothing has been brought on record to prove the compliance of the aforesaid conditions. - From the schedule of the profit and loss account it is seen that Motilon has earned the commission only from the assessee & not from any other party and therefore it could not be established that Motilon is in the business of commission agency and has also earned commission from other parties - no reason to interfere with the order of CIT(A) - CIT(A) following the decisions of Apex Court (1972 (9) TMI 4 - SUPREME COURT) and (1966 (9) TMI 30 - SUPREME COURT) - Decided against the assessee. Disallowance of Interest - loan from Motilon Synthetics (sister concern) - assessee has given interest free advance to Baba Synthetics (also its sister concern) - Held that:- Considering the undisputed fact that the assessee has paid interest on borrowed funds and had also lend interest free loan to its sister concern. CIT(A) while upholding the decision of AO has given a finding that assessee has not been in a position to prove the commercial expediency whereby it was required to give interest free loans to Baba Synthtics. As assessee could not controvert the findings of CIT(A) by bringing any material on record no reason to interfere with the order of CIT(A) - against assessee.
|