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2023 (4) TMI 377 - AT - Income TaxDisallowance as Commission Expenses - principle of res judicata - assessee has claimed deduction of sales commission expenses paid to sister concern of the assessee firm and partners of the assessee firm - HELD THAT:- As decided in assessee own case [2023 (4) TMI 314 - ITAT AHMEDABAD] as held no doubt the assessee has been paying commission for the past many years and which has never been disallowed in scrutiny assessment. But the assessment orders reveal that the issues were was never examined in those years. Assessee has been claiming and has been allowed the said claim in scrutiny assessment for the past many years, we find does not help the case of the assessee. More particularly when the detailed scrutiny in this year brought out facts revealing that there was no basis and reason for paying the commission to these agents who even otherwise were closely related to the assessee, since the assessee was unable to demonstrate any service rendered by them as distributors. The principle of res judicata does not apply to Income Tax proceedings and the facts of each year have to be considered and merely because the claim has been allowed all these years without being examined, does not make the claim legitimate despite evidences on record proving to the contrary. Contention that the disallowance in any case could not have been made u/s. 40A(2)(b) - We find no merit in this consideration - A.O. has not invoked Section 40A(2)(b) for the purposes of making the disallowance - AO we find has only referred to the Section for pointing out that the agents were closely related to the assessee qualifying as specified persons as per the said section and the disallowance has been made finding the claim to be ingenuine in terms of Section 37(1) of the Act. Therefore this contention of the assessee is also rejected. Addition u/s 40A(2)(b) disallowed by CIT(A) by invoking Section 249(3) - Assessing Officer held that the assessee has not given any justification for excess interest payment @ 18% paid to related parties and hence disallowed interest paid - CIT(A) dismissed the relief granted to the assessee on a technical ground that there is a delay in filing of appeal by the assessee and accordingly he dismissed the appeal of the assessee by invoking the provision of Section 249(3) - HELD THAT:- The assessment order was passed on 27.10.2016. Therefore, apparently the assessee seems to have incorrectly mentioned the date of communication of such order as 27.10.2016. There is nothing on record that the assessment order was served upon the assessee on the same date which was by way an e-mail communication. Further, looking into minor period of delay, in filing appeal before Ld. CIT(A) in the interest of justice, we think it is a fit case that such delay should have been condoned. Accordingly, we are dismissing the order of Ld. CIT(A) to the extent it has not afforded relief to the assessee on the ground that the appeal was filed beyond the due date by invoking the provision of Section 249(3) of the Act. In view of the above observations Ground Nos. 4 & 5 of the assessee's appeal are allowed.
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