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2018 (5) TMI 2092 - AT - Income TaxDisallowance of commission expenses paid - HELD THAT:- CIT(A) considering the submissions of the assessee deleted the disallowance observing that the recipient company is a loss making company and is not a ground for disallowance of commission. He also accepted the submissions of the assessee that M/s. Toshbro Controls Pvt. Ltd. is known to customers by its flag ship company and may not be aware of the subsidiary company and therefore the customer might have stated that they have got materials directly from the assessee company M/s. Nova Controls Pvt. Ltd. which is the flag ship company. As find from the details that similar commission has been paid to M/s. Toshbro Controls Pvt. Ltd., during the Financial Years 2007-08 to 2014-15 and the percentage of total sales made through the M/s. Toshbro Controls Pvt. Ltd. by the assessee ranges from 58.30% to 78.78% and the commission paid ranges between 11.57% and 18.83% depending upon the percentage of sales to total sales. We find that that the Revenue has accepted the payment of commission in all the earlier years and disallowance was made only during this year and based on an apprehension that the sister concern is making loss and therefore assessee tried to shift the profits, this fact is not proved beyond doubt. When the commission paid by the assessee is accepted in all earlier years there is no reason why it should not be accepted during the Assessment Year under appeal - we do not find any infirmity in the order passed by the Ld.CIT(A) in allowing the claim of the assessee. Hence the order of the Ld.CIT(A) is sustained on this issue. Disallowance of travelling expenses to 12.5% as against 25% disallowed by AO - HELD THAT:- As we are of the view that the matter be restored to the file of the Assessing Officer to substantiate the claim of travelling expenses by the assessee with evidences. Hence this issue is restored to the file of the Assessing Officer for fresh adjudication. This ground is allowed for statistical purpose.
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