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2019 (5) TMI 1112 - AT - Income TaxDisallowance u/s 37 - commission to the assessee’s son - CIT(Appeals) allowed 50% of the commission to be paid in the case of assessee’s son - HELD THAT:- We find that when the rate of commission paid to other agents was on par with the rate paid to the assessee’s son, merely because Shri Navneet Bagdi appears to be the assessee’s son, the CIT(Appeals) is not justified in restricting the payment to 50%. Moreover, it is not the case of the Revenue that Shri Navneet Bagdi has not rendered any service. In those circumstances, the CIT(Appeals) ought to have allowed the claim of the assessee in toto. Therefore, the order of the CIT(Appeals) in respect of commission payment to Shri Navneet Bagdi is modified and the Assessing Officer is directed to allow the entire payment . Disallowance u/s 35(1)(ii) - Assessee involved in the sham transaction under the garb of donation - HELD THAT:- The very fact that the transaction ultimately ended in refunding the money to the assessee through banking channel after reducing the commission to the extent of 5% shows that the money has come back to the assessee. This is the transaction arranged in such a way that the accommodation entries were made at several entities level and ultimately the money came back to the assessee. Herbicure Healthcare Bio-Herbal Research Foundation of Kolkata involved in the fraudulent and sham transactions, providing accommodation entries and claiming bogus weighted deduction to the extent of 175%. The antecedents of the recipient were unearthed by the Department during the course of survey operation. The material available on record clearly establishes that the so-called donation ultimately received back by the assessee after reducing the commission. CIT(Appeals) in a very reasoned order found that the assessee involved in the sham transaction under the garb of donation. addition confirmed.
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