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2016 (5) TMI 1490 - AT - Income TaxDisallowance of commission expenses paid against sale of plot - bonafides of the commission payment - credibility of expenditure - exorbitant amount commission - absence of proof of service provided in sale of land - HELD THAT:- There is no corroboration for involvement of the middlemen in the deal except the MOU which is found to be illusory and lacks in material features. The buyer has also not vouched the deal. Payment of such astounding sum to a person having as little understanding of the subject as possible neither accords with any business practice nor is corroborated by any direct or circumstantial evidences. It only militates against any logic. Which are those other parties who were contacted or what other efforts were carried out prior to and in the course of deal are not borne out from records. It is difficult to believe the credibility of expenditure stated to be incurred by the Assessee on the face of such sordid facts. Thus, viewed from any perspective, the propriety of payment of staggering amount of ₹ 90 lacs purportedly made against obtaining services for sale of property based on some symbolic MOU deserves to discredited. The genuineness of the expenditure incurred is not at all proved. The initial examination of Shri B.S. Agarwal clearly shows that Shri B.S. Agarwal did not play any role in the land deal. Thus, payment of exorbitant amount of ₹ 90,00,000/- towards commission on some mundane MOU without exhibition of services is an utter improbability and does not stand to any reason. The assessee has not discharged initial burden of proof which squarely lies upon him to reasonably establish receipt of services. The receipt by payee can be for variety of reasons both gratuitous and non-gratuitous. The payment of taxes paid by the recipient though a mitigating factor, by itself will not render the corresponding expenses as sacrosanct. The assessee is under obligation to discharge the burden to reasonably prove the bonafides of expenses claimed. The Hon'ble Supreme Court in the case of CIT v. Durga Prasad More [1971 (8) TMI 17 - SUPREME COURT] has held that the taxing authorities are not required to put on blinkers while looking at the documents produced before them. They are entitled to look into the surrounding circumstances to find out the reality of the recitals made in the documents. - Decided against assessee.
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