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2018 (9) TMI 1315 - AT - Income TaxAddition against commission payments on sale - Commission paid was for marketing and increase of sales and sales has increased due to commission Paid for marketing efforts - allowable expenses - Held that:- In fact the HUF has not deployed any asset towards earning commission income. It has further been noted that the resultant tax paid by HUF is nominal and on the other hand substantial tax has been saved by the appellant, who falls in the highest tax bracket. The tax saved on this transaction with HUF is around ₹ 2,00,000. The further plea that the payment of commission had been accepted in a later assessment also does not carry weight, firstly, as the principle of res judicata does not apply to proceedings under Income-tax Act, and secondly the cited assessment order of A.Y.2012-13 does not carry any discussion on the issue of commission paid to HUF, hence there is no finding or opinion formed on the issue. The commission paid to the said HUF is at the rate of 5% of sales made to NEC during the year and similar payment of commission has been made to the Karta in his individual capacity also, which has been allowed. Considering the entire gamut of facts and the decisions cited, it is held that the payment of commission of Sanjay Palaria HUF is not allowable as the exertion, if any, for earning any commission has been made by Sh. Sanjay Palaria only, for which he has been paid commission in his individual capacity and also no resources of HUF have been deployed for earning the said commission. Accordingly the addition on account of disallowance of commission payment upheld - decided against assessee.
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