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2022 (10) TMI 400 - AT - Income TaxDisallowance of proportionate interest on interest free advances - HELD THAT:- The amount were given to players for endorsement of assessee’s products/goods and there is advances given to an agent. The payment to an advocate is for attending to various legal matters concerning the assessee. Payments made to JVS Sporting and Sunridges Sporting are for the purpose of payment of taxes on their behalf as they are sister concerns of the assessee and have running accounts. As regards, the advance to Shri Vinod Sareen, it is observed, he is an old and dependable employee of the assessee to whom advance is given at the time of need. As regards, the alleged advance to Anisa Sareen, after examining the reconciliation statement filed by the assessee, Commissioner (Appeals) has given a factual finding that actually there was no such advance given to the concerned person. The aforesaid finding of fact recorded by Commissioner (Appeals) could not be controverted by the Revenue us. In view of the aforesaid, we uphold the decision of Commissioner (Appeals) on the issue. Ground raised is dismissed. Addition u/s 68 - undisclosed sundry creditors - HELD THAT:- Merely because these evidences were not produced in course of assessment proceedings, AO has stated that such evidences should not be accepted and additions made should be confirmed. To say the least, the observations of the AO are self-contradictory. On one hand, he accepts that assessee’s contention regarding genuineness of sundry creditors appears to be correct, whereas, on the other hand, he terms assessee’s claim to be afterthought. This, in our view, is unacceptable. When the assessing officer has not found anything adverse in the evidences furnished by the assessee and accepted assessee’s claim to be correct, he cannot again reject the claim of the assessee on flimsy ground. AO cannot blow hood and cold at the same time. Addition being expenditure incurred towards distribution of free samples to players - HELD THAT:- As it may not be always possible for the assessee to keep supporting evidence, considering the fact that at times, assessee is providing free samples to national/international level players of repute and considered as celebrity. Therefore, it may not be always possible to obtain receipt from such players qua the free samples. Assessee’s claim that the expenditure cannot be fully substantiated through supporting evidence, to some extent, is acceptable. The possibility of inflation of expenditure to some extent cannot be ruled out altogether. That being the case, to take care of such situation, a part of the expenditure being not supported by proper evidence has to be disallowed. In the peculiar facts of the present case, disallowance of 10% out of the expenditure claimed, in our view, is reasonable. Hence, no interference is called for. Accordingly, we uphold the decision of learned Commissioner (Appeals) we dismiss the ground raised. Unexplained unsecured loan - HELD THAT:- In the remand report filed by the assessing officer in course of first appellate authority, it is observed, though, he could not find anything adverse in the details or reconciliation filed by the assessee, however, he simply observed that this is an afterthought of the assessee. The aforesaid facts clearly indicate that in course of first appellate proceeding, the assessee did furnish supporting evidence to reconcile the discrepancy pointed out by the assessing officer in the assessment order. It is further evident, the assessing officer, in course of remand has not found anything adverse in the evidences furnished by the assessee. Once the discrepancy pointed out by the assessing officer stands reconciled, no addition can be made on account of unsecured loan. Accordingly, we uphold the decision of Commissioner (Appeals) by dismissing the ground raised. Disallowance u/s 40(a)(ia) - non deduction of TDS on Commission to partners, Commission to agents and Commission to Bank - HELD THAT:- Commission to the agents, AO has accepted that tax was duly deducted at source and paid to the government account within the prescribed time. Therefore, this addition cannot survive. Commission to bank, the assessing officer has accepted that TDS provisions are not applicable to commission paid to bank. Thus, this addition was also rightly deleted. Commission to partners as rightly observed by Commissioner (Appeals), commission paid to partners is not covered under Section 194H of the Act as there is no employer and employee or principal agent relationship between the partners and the firm. Thus, we do not find any reason to interfere with the decision of learned Commissioner (Appeals) on the issue. Ground raised is dismissed.
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