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2017 (12) TMI 465 - AT - Income TaxDisallowance on account of commission payment - Held that:- The assessee has not produced the requisite details before the assessing officer and further, the Ld. CIT (Appeals) has also not taken a remand report from the assessing officer with respect to the observations made by the assessing officer while making the disallowance. Therefore, in view of above facts, and in interest of justice, we set aside the whole issue back to the file of the assessing officer with a direction to the assessee to produce the commission agents before the assessing officer for verification about the rendition of the services and, for production of any other information and details to prove the allowability of commission expenses. The assessing officer is also free to make necessary enquiries as he deems fit to decide the issue. Needless to say, proper opportunity of hearing will be granted to the assessee before deciding the issue. Accordingly, ground no. 1 is allowed for statistical purposes. Addition on account of interest on insurance claim and deletion of income from insurance claim - Held that:- In the case of Godhra Electricity Co. Ltd. vs. CIT (1997 (4) TMI 4 - SUPREME Court) held that if the income does not result at all, it cannot be taxed even though in book keeping an entry has been made about the hypothetical income which does not materialise. Thus, we are of the considered opinion that mere filing of insurance claim did not give any right to the assessee to receive income as the claim was not accepted by the insurance company. Had there been any acceptance by the insurance company, then the income would have definitely accrued on the basis of the accounting entry. But in the instant case it is not so. Even during the course of proceedings before us, the department could not produce any cogent evidence to the contrary in this regard. Accordingly, we find no reason to interfere with the adjudication of the Ld. CIT (A) on this issue and dismiss ground Nos. 2 and 3 of the department appeal. Adhoc disallowance of expenses - Held that:- Personal element in all these expenses could not be ruled out. The Ld. CIT (A) also noted that relevant details were furnished before the AO but the AO had failed to point out specific instances of personal element in such expenses. While deleting the disallowances, Ld. CIT(A) has placed reliance on numerous orders of the ITAT Delhi Bench where the jurisdictional Tribunal for the assessee has held that where the expenditure was disallowed without pointing out any expenditure in the nature of personal expenses, there was no justification in making ad hoc disallowances. This adjudication of the Ld. CIT (A) could not be negated by the department by leading any evidence to the contrary even during the course of proceedings before us. Therefore, on this issue also we find no reason to interfere with the adjudication of the Ld. CIT (A) and we, accordingly, dismiss ground No. 4 of the departmental appeal.
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