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2016 (5) TMI 490 - HC - Income TaxAddition made on account of payment of “Mehta Sukhadi” - According to the appellant, such commission has been paid secretly to employees of numerous clients and those amounts are deductible under Section 37(1) - Held that:- Vague references are made to the statement made by the partners of the assessee firm whose presence had been recorded by CIT (Appeals) at the hearing. The CIT (Appeals) does not record any substantial evidence that had been provided and except to say that some documentary evidence was produced, the order of CIT (Appeals) leaves much to be desired and fails to inspire confidence. Apart from the fact that the names of recipients are not mentioned, we do not find any attempt on the part of assessee to lead any evidence indicating how these payments were made. None of the partners have given evidence to establish as to which partners dealt with various clients, whose names were not provided in the list forming part of the record. Although the list, a copy of which is now been taken on record, pursuant to the order in Notice of Motion reveals names of clients, most of whom are corporates, the assessee made no attempt to adduce any evidence as to which the partners dealt with clients in question. No attempt has been made to establish whether the payments were for the purpose of business. In fact the Assessing Officer has in our view rightly concluded that payment of commission did not result in any expeditious payments due to the assessee. Moreover, the finding of fact reveal that the rate of commission was not uniform. There is no evidence brought on record by the appellant to establish that payment of commission was matter of trade practice in its line of business. In absence of such evidence, we are inclined to accept the findings of the tribunal which is last fact finding authority and as such we are not inclined to interfere with this finding. In the view we have taken on the basis of the law existing at the time, the impugned order was passed to hold that the appellant had not established the payment of secret commission. No occasion arises to examine the application of the Explanation 1 to Section 37 of the Act, which would arise only if it is held that the expenditure of secret commission had in fact been incurred of the purposes of business. Appeal must fail and the substantial question of law raised for our consideration in all the three appeals viz “Whether on facts and the circumstances of the case, Tribunal was right in sustaining the addition made on account of payment of “Mehta Sukhadi” ? is answered in the affirmative i.e. in favour of the revenue and against the assessee
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