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2015 (6) TMI 244 - AT - Income TaxDisallowance of commission paid - CIT(A) deleted the addition - Held that:- It is evident from the statements recorded by the AO and reproduced in his order and the confirmations sent by various parties that all the parties have recognized Sh. Nawal Khanna and some of them stated that they were thinking that Sh. Nawal Khanna was an employee of the assessee-company and some were thinking he is representing the assessee-company. The middleman Sh. Nawal Khanna was not acting like independent agent has rightly been observed by the ld. CIT(A) and it is the way of doing business by the assessee to procure orders, cheques etc. It is not a case of the AO that Sh. Nawal Khanna has been paid commission only in the impugned year, as mentioned by the ld. CIT(A) in his order referred to hereinabove. Sh. Nawal Khanna has been paid commission since assessment year 2001-02 to 2007- 08 and the same has been allowed by the Income tax Department except in the impugned year. It is also not the case that only Sh. Nawal Khanna has been paid commission and nothing has been paid as commission to others, as mentioned in the order of the ld. CIT(A) referred to hereinabove i.e. to Sh. Harminder Benipal of M/s. Marlik Seam and others were paid commission and the said commission has been allowed as expenditure by the Income Tax Department is not under dispute. The said Sh. Nawal Khanna is not relevant person as provided u/s 40A(2)(b) of the Act. Further, no basis brought on record by the AO to hold that the commission so paid is bogus. It is fact on record that all the parties knew Sh. Nawal Khanna and about the services carried out by him like procurement of orders and cheques etc. In the facts and circumstances, the said commission paid to Sh. Nawal Khanna is allowable under section 37(1) of the Act. We find no infirmity in the order of the ld. CIT(A), who has rightly allowed the claim of the assessee. - Decided against revenue.
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