Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (2) TMI 1211 - AT - Income TaxDisallowance of commission expenses - Held that:- A customer intending to purchase a vehicle would visit an auto dealer directly, and on the basis of discussions, including demonstration, as well as other relevant factors, viz. past experience, reputation of the manufacturer, etc., take a decision, also co-opting the information gathered from other such dealers of the same or different manufacturers, i.e., as per his needs and budget. Why, then, would a person contact another, as Mohini Sharma, or others (to whom commission has been paid), who would in turn only refer him an auto dealer. No personalized; rather, cognizable service is involved, for a customer to approach a third person for a reference. There is no value addition for the customer and, in fact, even from the standpoint of the dealer so as to incur any cost for the same. In fact, the market being fiercely competitive, as admitted by the assessee itself in the context of another issue, it is incomprehensible that commission is paid merely for reference, i.e., even if did not result in any sale. The assessee’s claim is completely unsubstantiated and unproved. The disallowance is accordingly confirmed. - Decided against assessee Estimation of the assessee’s income from its two workshops - addition to its’ dealership (trading) business in respect of which the assessee is not maintaining any separate books of account - Held that:- We are, on balance, satisfied with the explanations (including the corroborative material) furnished by the assessee (through the ld. AR) in respect of the queries raised qua the accounting of the job work segment of the assessee’s business. We are, however, unable to appreciate as to how the sale of used oil is, as claimed, credited to the sale of spare parts inasmuch as there is no purchase thereof (used oil). However, where credited to a sale account, the same, irrespective of the account head, gets credited to the profit & loss account, so that the same is in order. The total sale for the relevant year, as appears from the sale bills enclosed in the paper-book (PB pgs. 69-72), is for ₹ 28,444/-. Revenue has not doubted the sale volume thereof, making an informed estimate of the sale that ought to have materialized. Under the circumstances, therefore, subject to the said amount being credited to the profit and loss account for the year, no interference with the profit (of the workshop business) as disclosed per the assessee’s accounts is called for - Decided in favour of assessee
|