Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 173 - AT - Income TaxPayment of commission - Held that:- From the orders of the subordinate authorities we arrive at our considered view that in the ledger a/c there is no definite rate of commission that is paid, the commission is not paid on weekly basis or monthly basis. We find that it is mostly paid towards the end of the year. It has been already decided by the subordinate authorities after thorough inquiries that the assessee has paid commission which has no nexus either direct or indirect with his business. After verifying the ledger a/c, we are of the opinion that it is a way to increase expenses and to reduce the level of profit. The assessee has also not discharged before us the correlation between the business activities conducted by him and the commission paid which therefore, signifies that the payment of commission has nothing to do with the business. One of the argument raised was that assessee was paying commission in earlier years and the same should be allowed. We are not informed whether the AO made enquiry in earlier years or not. In this year the AO made enquiries and found that no services were rendered by the persons who were paid commission. We are convinced that there is no justification for payment of commission. Under the circumstances, we uphold the order of the learned CIT (A) in this regard and this issue of commission payment is dismissed. Claim of agricultural income rejected and treated as taxable income - Held that:- Regarding the agricultural income, the AO sought the details of land owned, crops grown and evidences for sale of agricultural produce. The assessee has given only the details of land holdings and stated that the income is from sale of mangoes and no evidence as to sale of agricultural produce nor evidence to claim that agricultural operations were carried were produced before the AO. In the absence of documentary evidence, the claim of agricultural income was disbelieved and the same was added to the income. Addition on account of unproved gifts - Regarding the alleged gifts, assessee has not given any details, hence the AO has made addition of ₹ 48,200. Before the learned CIT (A) the AR could not justify his claims and accordingly the CIT(A) confirmed these additions as done by the AO. As per our considered view, since there is nothing on record to support the claim of the assessee and the subordinate authorities after conducting necessary inquiry have confirmed the said addition, we accordingly see no reason to interfere with the order of the learned CIT (A) and therefore upheld the said additions. Addition of outstanding towards suspense a/c under sundry creditors u/s 41(1) - Held that:- For invoking of provisions of section 41(1) the AO has to prove that the amount was allowed as expenditure in any of the earlier A.Ys. Further, there should have been a remission of such amount by the party concerned. Both the conditions are not prevalent in the facts mentioned in the order of the AO. Further, for invoking the deeming provision, the onus rests on the AO and not on the assessee. The AO himself mentioned that the liability was outstanding for more than 3 years which facts confirms that the amount does not partake the nature of income of the assessee for the A.Y under consideration. Therefore, this addition is deleted.
|