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2017 (2) TMI 515 - AT - Income TaxDisallowance of payment of commission - Held that:- The assessee has established that the payment of commission was for services rendered by ACPL as well as IMACO. No contrary evidence has been brought on record by the AO to disallow the expenditure on account of commission. The observations of the AO in the order of assessment that the transactions is bogus or sham and was undertaken to camouflage some expenses which are not legally admissible being in contravention of the laws of the land, is purely a surmise. There is no evidence brought on record to come to this conclusion. On the other hand, the evidence on record as noticed by the AO in the order of assessment itself clearly goes to prove that the liaison activities were in fact rendered by ACPL. As rightly held by CIT(A) in his appellate order for A.Y.2009-10, the AO seems to have proceeded on the basis that the payment of commission was not commensurate with the services rendered by the recipients. The CIT(A) has rightly placed reliance on the decision of the Hon’ble Supreme court in the case of Sassoon J.David & Co.P.Ltd. vs CIT. (1979 (5) TMI 3 - SUPREME Court) to come to the conclusion that the revenue cannot assume the role of ascertaining how much the is reasonable expenditure having regard the circumstances of the case. The CIT(A) has also duly taken note of the fact that ACPL and the assessee were not related parties and that all the payment have been made through banking channels after due deduction of tax at source. - Decided against assessee
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