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2017 (10) TMI 775 - AT - Income TaxDisallowance of commission paid by assessee in the course of the business of trading in chemical gases used in the Pharma and Industrial sectors - allowable business expenditure - Held that:- As during the year ended 31st March, 2010, relevant to A.Y. 2010-11, one Mr. Ketan Panchal introduced M/s. DNA Entertainment Pvt. Ltd. for sale of various gas cylinders and accordingly, the assessee had sold gas cylinders aggregating to ₹ 2,68,606/-. As this was a new customer, the assessee paid commission of ₹ 27,778/- to Mr. Ketan Panchal. In respect of payment of commission to Mr. Sandeep Sonar, I found that Mr. Sandeep Sonar had introduced himself to the assessee as a Sales Representative for procuring orders for sale of gas cylinders from the existing customers as well as from the new customers. In this endeavour, he brought business of selling gas cylinders to one M/s. Exe! Gas & Equipments Pvt. Ltd. for supply of gas cylinders of ₹ 1,25,000/- and accordingly, the assessee paid commission of ₹ 11,000/- to him from which the assessee deducted TDS of ₹ 1100/- and paid ₹ 9900/- by crossed account-payee cheque. In view of the above find no justification for the disallowance of commission paid by assessee in the normal course of business for the purpose of business. - Decided in favour of assessee For Assessment Year 2012-13 assessee had produced the evidence in the form of name, address, PAN and details of payment of commission by crossed account-payee cheques after deducting TDS to each of the six commission agents. The assessee had also furnished confirmation of accounts of each of these commission agents before the Commissioner (Appeals). The assessee also adduced evidence in the form of e-mails and other details to show that these commission agents rendered services for which the assessee had paid commission to them. I found that out of six agents, three agents namely. Mr. Sandeep More, Mr. R.B. Rahate and Mr. Narayan Hegde, were the commission agents to whom similar commission was paid for the A.Y. 2009-10 and the said commission was allowed by the AO while making scrutiny assessments. To these three commission agents, the assessee paid aggregate commission of ₹ 4,36,757/- out of total commission paid of ₹ 19,57,700/-. Therefore, direct the AO to delete disallowance of commission payment.
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