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2017 (11) TMI 1286 - AT - Income TaxDisallowance of commission - CIT-A deleted addition for the reason that the assessee itself had voluntarily offered the disallowance of commission in the return of income as well as admitted during the course of survey under section 133A - Held that:- AO himself allowed the payment of commission @ 5% by the assessee to Hitesh Trading company and accepted the genuineness of payment & services rendered and this has been consistently allowed earlier years also. Only disallowance made is qua excess of 5% i.e. claimed by the assessee @ 8%. We find that RBI specifically approved the 8% of the commission payment. This was with a view to expand business further, as the assessee desired to do penetration in other emerging markets and accordingly, a fresh agreement was entered with Hitesh Trading Co., with expanded scope of services to be rendered. Unlike the earlier agreement, where the scope of the services by the said company was confined to USA and Canada, the scope was increased tremendously in this new agreement so as to cover entire Europe, Australia, Middle East, Asia, Hongkong and Singapore. Apart from the increase in the area of coverage, another additional duty cast was to source right quality of diamonds at competitive price as per the requirement. Since, there was a considerable expansion of the scope, the activities and the responsibilities on the part of the said company the rate of commission was enhanced from 5% to 8%. Hence, we find no infirmity in the claim of commission @ 8% and we allow the same. The orders of the CIT(A) is confirmed and appeal of the Revenue is dismissed
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