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2017 (1) TMI 1783 - AT - Income TaxDisallowance of commission expenses - payment of commission for obtaining supply order from government agencies - Assessee was asked by AO to establish the genuineness as well as reasonableness of expenditure in question and assessee was further required to explain the services rendered against which the commission has been claimed as expenditure which he failed to do - CIT(A) allowed the claim of commission payment - HELD THAT:- The assessee has shown the commission ranging from 7% to 9% above the commission to MPLUN. The expenditure is supported by the bills raised by the payee. The assessee has given PAN mentioning the bill. The commission has been paid for collecting the requirement from the Government offices located at Indore, Khargone, Mandla, Balaghat, Chhindwara and Dewas. The assessee is engaged in manufacture of sub-mersible pumps and during the year the assessee has supplied the product of the assessee to Public Health Engineering Department, Govt. of M.P. and many other Government departments. Therefore, the assessee has to identify various places, thereafter for getting the orders the assessee has to make installation of submersible pumps at the various sites identified by Public Health Department and liasoning charges have been paid by the commission account. Thus, the assessee has made payment for the services rendered. The assessee has explained the nature of services rendered. Therefore, we are of the view that the learned CIT(A) is justified in allowing the claim. The same kind of commission was allowed in four earlier assessment years 2005-06 to 2008-09 and it was allowed in scrutiny assessments for the assessment years 2005-06 and 2006-07. Therefore, rule of consistency is followed by the learned CIT(A). We are of the view that the learned CIT(A) is justified. Moreover, the assessee has given sufficient evidence to prove the same. Therefore, we do not find any discrepancy in the order of the learned CIT(A) - Case followed PURE PHARMA PVT. LTD. [2004 (3) TMI 31 - MADHYA PRADESH HIGH COURT] - Decided in favour of assessee.
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