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2021 (4) TMI 534 - ITAT CHENNAIDisallowance of commission paid - specific services the commission agent rendered to the assessee for which the assessee has paid the commission - assessee has failed to submit any documentary evidences to prove the genuineness of claim and actual services rendered by foreign agent - HELD THAT:- Generally no direct evidence for the “service rendered” can be produced and the relationship of the “service rendered” and “business purposes” has to be established by circumstantial evidence and growth in the business of the assessee in such cases. In this case, as per the matching concept of taxation, both the commission Agents have given sufficient business. Foreign Agent has given export orders of ₹.22.Crs and local agent has procured orders for Reliance Jio Info Comm Ltd. for the extent of ₹. 60 crores, by which revenue has increased from ₹.2.72 Crs to ₹.6.36 Crs. Thus, there is a direct nexus between the income generated and the commission payment. It is beyond doubt that the commission paid by the assessee was on account of commercial expediency. If there was evidence that sales increased due to effort of the commission agent and that the commission paid was reasonable and the commission was held to be deductible as has been held in in the case of Voltamp Transformers Pvt. Ltd. [1980 (10) TMI 35 - GUJARAT HIGH COURT] Assessee has very well entered into an agreement for payment of commission both with foreign agent as well as domestic company for the purpose of assessee’s business, which were duly signed and accepted by the respective parties. Not only agreement, the assessee has also furnished copies of commercial Invoice, confirmation of Accounts, copy of Form 15CB in the case of foreign party, for non-deduction as they do not have an office in India, in the case of Indian Company, TDS was deducted, copies of Bank Statement to establish that the payment were made through Banking channel, purchase order copy, copies of sale invoices for commission paid to M/s. Poushali Sales (P) Ltd., copies of Shipping Bills in case of Exports Orders, Service Tax Registration & Service tax payment, audited financials of M/s Poushali Sales (P) Ltd., with income tax computation and acknowledgement of tax return for three assessment years, i.e.,2016-17, 2017-18 & 2018-19. Moreover, the commission payments have been made to M/s. Paushali Sales Pvt. Ltd., the domestic agent through banking channels after duly deducting TDS and the said company has declared the commission revenue both to the Service Tax Department and the Income Tax Department as per the respective returns filed and produced before the Assessing Officer, and such transaction was duly accepted by the respective Departments. - Decided in favour of assessee.
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