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2018 (1) TMI 1108 - AT - Income TaxAddition on account of commission expenses - genuinity of claim - Held that:- Commission was paid to the said party in the assessment year 2007-08 and when in early years this party was paid the commission which appears to have been accepted, then merely because in immediately preceding two years commission was not paid cannot be the ground for adverse inference. In the case of other agents also similar nature of evidence has been appreciated by the Ld. CIT(A) and one such fact was that, in those cases payments have been made in the earlier two assessment years also. The assessee had already explained before the authorities below and before us that in the assessee’s case the payment of commission has been a regular feature since last several decades and it is through agents only the assessee has been selling its products across the country. Therefore, it cannot be held that payment of commission paid to Shri Shiv Kumar is either for non-business purpose or is not genuine. Accordingly, we hold that the payment paid to Shri Shiv Kumar as commission is to be allowed. - Decided in favour of assessee Disallowance of power and fuel expenses - Held that:- Maintaining of day to day register for the consumption of paddy husk would be a very difficult proposition to measure quantitatively daily for the reason that the paddy husk are kept in a heap outside in open which is always subject to rigours of weather and is quite prone to wastage. If the overall stock and net consumption has been shown on which no discrepancy has been pointed out, then simply because day to day register for consumption has not been maintained cannot be a ground for making any kind of disallowance on the consumption. There is no reason for the AO to draw adverse inference or take a different view in this year when the percentage of consumption is less in this year in comparison to the earlier years. Therefore, on these facts we do not find any reason to sustain any kind of adhoc disallowance and same is directed to be deleted - Decided against revenue Addition of unverified purchases - Held that:- Once it is not disputed that the purchases have been made through cheques and the cheques have been cleared in their favour, then it cannot be held that these payments have been made for some other purposes, especially when overall quantity of purchase, consumption of material for manufacturing and sales have not been disputed or any kind of discrepancy have been found in the books of accounts. If the sales and gross profit along with the manufacturing results have been accepted, then purchases cannot be disallowed. The source of the purchases are directly routed through books and it cannot be the case of purchases being made outside the books of account. Thus, we uphold the deletion of addition by the Ld. CIT (A) - Decided against revenue
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