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2017 (4) TMI 613 - ALLAHABAD HIGH COURTCommission to sole selling agent disallowed - Reasonableness of payment of specified persons - additions u/s 40A(2)(a) - Held that:- As decided for for the assessment years 1990-91 and 1991-92 [2013 (11) TMI 1247 - ALLAHABAD HIGH COURT] the constitution of M/s. Laxmi & Co shows Sri L.C. Gupta (HUF) and others were ladies and house wives representing the interest of HUF, they were not in a position to offer any professional advise on matters relating to production, market survey or procurement of orders etc. Sri L.C. Gupta was engaged as Manager (Finance) with the assessee firm - Assessee has taken substantial amount as loan from the relatives including partners of Commission Agent M/s. Laxmi & Co, and had paid a high rate of interest - There was no service provided by the partners of M/s. Laxmi & Co. in respect of manufacture and sale of production to justify huge commission. Also the questions whether assessment of commission was excessive or unreasonable is subject of discretion of the income tax authorities to be exercised under section 40A (2) (a) of the Act on the basis of material on records. In the present case, the findings have been recorded on the basis of material produced before the income authorities - Decided against assessee.
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