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2023 (6) TMI 170 - AT - Income TaxDisallowance of commission expenses - AO observed that the payments under the head “commission” made to various persons engaged in marketing and distribution network and therefore estimated that the minimum rate of 2% on total sales claimed by the assessee - HELD THAT:- Above commission payment are made by the assessee by cheques and appropriate TDS is deducted and remitted to the Government account and the parties also assessed to Income Tax. The assessee is also maintaining its books of accounts in ERP system, Commission is calculated at the end of the relevant quarter and after due verification of sales target achieved, payment received against sales etc, and on the basis of debit note received from dealers, the commission expenses is accounted in the books of the assessee company. AO also found that similar commission expenses is being accepted by the department and which is not disputed by the A.O. Thus CIT(A) deleted the addition correctly - Decided against revenue. Disallowance of Gratuity paid towards LIC fund which was not approved by Income Tax Authority - CIT-A allowed the claim of assessee - HELD THAT:- This issue is been settled in the case of Valsad District Central Co-Op. Bank Ltd.[2019 (5) TMI 1979 - ITAT SURAT] as held petitioner produced what it had been producing all along namely, the contribution made towards the fund and the agreement of the LIC to manage the fund. If the Assessing Officer had any doubt about such a claim, it was always open for him to examine it, ask the petitioner to fulfill further requirements. Merely because the petitioner did not provide an additional declaration in the return that the scheme though approved, the pentioner is unable to produce a copy of the order approved by the Commissioner after long gap of time, cannot be categorized as failure on the part of the petitioner to disclose truly and fully all material facts. Also in M/S. TAMILNADU MARITIME BOARD [2020 (10) TMI 798 - MADRAS HIGH COURT] held that contribution made towards fund was to be treated as business expenditure and the same was allowable u/s. 37(1) of the Act, even though the said fund was unapproved by Income Tax Department - no hesitation in confirming the deletion made by the Ld. CIT(A) - Decided against revenue.
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