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2022 (6) TMI 471 - AT - Income TaxDisallowance of service charges/commission payment - assessee is in the business of manufacture and sale of industrial explosives - HELD THAT:- The services rendered by the agents are remunerated by "service charges", which is termed as "commission". The assessee has produced copies of the agreement, the ledger extracts, the bank statement showing payments made, details of the TDS etc. The A.O. has not doubted the amounts paid nor the transaction done. The only reasoning of the A.O. for making disallowance of these payments is that the orders are received from PSUs based on public tenders for which no commission need to be paid. We find that the A.O. has not understood the nature of business of the assessee. The PSUs using explosives are mostly in mining sector, which are spread across the remote areas in the country. The assessee had admittedly appointed these agents to whom the payments were made to properly execute the sales orders and there is considerable efforts made by the agents in terms of statutory compliance, storage, inventorising etc. The assessee has admittedly paid these agents at 3.5% of the sales handled by them. As stated earlier, the amounts or fact of payments has not been disputed by the A.O. The CIT(A) has rendered a categorical factual finding, which has not been dispelled by the Revenue by placing any contra evidence. In the light of the a foresaid reasons, we reject grounds 2 and 3 raised by the Revenue. Disallowing the credit balance of various parties in the books of the assessee under the head "creditors not verifiable" - A.O. disallowed the sundry credits - HELD THAT:- The details of the parties, nature of transaction and the amounts of transaction are described in impugned order of the CIT(A). Each of the above parties transactions, it was found by the CIT(A) that the assessee has made the payment through bank accounts and had submitted copies of confirmation of transactions, the ledger extracts from all the parties evidencing payments made. The A.O. in the remand report has not raised any specific objections with regard to the submissions made by the assessee. It is in this context and after examining the evidences placed on record the CIT(A) has come to a factual finding that the amounts outstanding are genuine and explained. The above factual findings of the CIT(A) has not been controverted by the Revenue, hence, we confirm the order of the CIT(A) as correct and in accordance with law. - Decided against revenue.
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