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2016 (10) TMI 969 - AT - Income TaxDisallowances of Commission, PF/ ESI , Fringe Benefit Tax u/s 40(a) and Bonus u/s 43B - search assessments framed u/s 153A - Held that: -Various disallowances made towards Commission, PF/ESI and FBT for the Asst Years 2006-07 to 2009-10 , which were unabated / concluded assessments, on the date of search, deserves to be undisturbed in the absence of any incriminating material found in the course of search and accordingly directed to be deleted. Hence we hold that the ld AO ought to have only followed the old assessed income u/s 143(3) for the aforesaid Asst Years 2006-07 to 2009-10. Since the issues are addressed on preliminary ground of absence of incriminating materials, we refrain to give our findings on the merits of the disallowances made towards Commission , PF/ESI and FBT for Asst Years 2006-07 to 2009-10. Accordingly the grounds raised by the assessee in this regard for those asst years are allowed. Disallowance of commission paid - Held that:- It is not in dispute that the commission @ 3% is paid to M/s Steel Crackers Pvt Ltd on sales made through them and in respect of Creators Corporation , commission was paid for policy decision resulting into sales of company’s products which varied from ₹ 450 to ₹ 2000 on sale of each product. All these facts are brought out clearly in the assessment order itself. We find that in addition to the above, the assessee had also provided the agreement copy , Ledger Account , TDS details on commission payments , Copy of bills raised by parties and IT return and accounts including balance sheet of recipient companies wherein the said commission income has been duly offered to tax by them. All these evidences clearly prove beyond doubt the claim of expenditure on account of commission. We find that the disallowance has been made merely based on wild allegation and on surmise and conjecture. In this regard, the support drawn by the ld AR by placing reliance on the decision of the Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd vs CIT reported in (1954 (10) TMI 12 - SUPREME Court ) is well founded. Hence in the facts and circumstances, we hold that there is absolutely no material brought on record to disallow 50% of the claim made by the assessee and accordingly the entire disallowance made on this account deserves to be deleted Disallowance made on account of employees contribution to PF / ESI - Held that:- It needs to be verified whether the employees contribution to PF / ESI have been remitted before the due date of filing the return of income by the assessee. Hence we deem it fit and appropriate to set aside this issue to the file of the ld AO to verify the said dates and if the same are remitted before the due date of filing return of income, deduction is to be granted to the assessee. - Decided in favour of assessee by way of remand Disallowance of bonus, leave salary u/s 43B - Held that:- We find that the matter requires to be verified by the ld AO with regard to the actual date of remittance of the aforesaid expenditure which would have a bearing on the allowability of the expenditure in terms of section 43B of the Act. We direct the ld AO to verify the same and decide the issue in accordance with law - Decided in favour of assessee by way of remand
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