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2021 (4) TMI 734 - ITAT DELHIUndisclosed income - receipt not included in the Profit & Loss Account of the assessee - contractual receipt under Marketing Assistance Programme (MAP) as per Agreement executed - HELD THAT:- As decided in own case [2018 (10) TMI 1888 - ITAT DELHI] MAP payment received by the assessee comes with certain conditionalities, such as, the assessee has to provide bank guarantee and there is an obligation to lift the stocks. In case the assessee does not succeed in lifting the stock etc., the proportionate part would not be available to it for onward payment to sub-contractors. The assessee has been consistently following this practice of accounting the amounts under MAP Agreement and the same has been accepted in the assessments completed u/s 143(3) for the two immediately preceding assessment years, namely, 2009-10 and 2010-11. CIT(A) has recorded a categorical finding to this effect which has not been controverted by the ld. DR. In the absence of any factual difference in the manner of receipt, disbursement or accounting of the marketing assistance payment received under the MAP Agreements in the preceding year vis-àvis the year under consideration, we are satisfied that the ld. CIT(A) rightly appreciated the facts and was justified in deciding this issue in favour of the assessee Disallowance of commission expenditure paid to two ladies - HELD THAT:- We find that the assessee has paid commission to the same two ladies namely Ms. Inderjeet Kaur and Ms. Paramjit Kaur and assessee failed to lead any evidence about the genuineness of the transaction of payment of commission and any services rendered by them. In that order also the ld AR explaining the nature of payment with same distributors necessitated of making payment to these ladies as part of their incentive under MAP agreement. The coordinate bench also considered the same in para 7. As the co-ordinate bench after examining the facts held that the assessee failed to adduce any evidence of rendering of services by these persons, which necessitated to make such payments and therefore the disallowance was confirmed. We do not find any reason to deviate from the judgment, facts quoted by the ld AR are also duly considered therein. However, in view of any evidence of rendering of any services by the above two persons to the assessee, in absence of any change in facts and circumstances of the case this year, we respectfully following the decision of the co-ordinate bench confirm the disallowances of ₹ 7 lakhs of commission paid to them. ground No. 1 of the appeal is dismissed. Addition of outstanding in the account of Ms Grace Enterprises - HELD THAT:- We find that the above amount was outstanding in the books of account of the assessee and assessee could not produce the confirmation of such outstanding sum. Out of several creditors, this was the only party whose confirmation could not be produced. Nonetheless, the fact was not denied that the liability arose on purchase of goods as trading transactions with this party in earlier year and liability still exists. It is not case that assessee has written back the above liability in its books of accounts; it is carried as liability in books. Thus, the liability to pay such sum is accepted by the assessee for this year. There is no evidence that the transaction resulting into credit in the name of the above party pertains to this year, in fact, it pertains to earlier year. Merely because the assessee could not furnish the confirmation of one of the several creditors naturally the liability to pay such party does not ceases to exist. In view of this, we reverse the order of the lower authorities directing the ld AO to delete the addition outstanding in the name of Ms Grace Enterprises. Disallowances out of telephone tours, and other expenses including depreciation on the car stating that involvement of the personal element of the partners of the firm - HELD THAT:- On careful consideration and after hearing both the parties we find that the ld AO has made an ad hoc disallowances on this expenditure without pointing out any element of such personal expenditure. During the course of assessment, proceedings, the assessee has given complete details to the various queries raised by the AO. Ld AO has failed to point out any evidence of incurring personal expenditure of partners in the books of account of the partnership firm. Thus, the above disallowance made by AO was purely on adhoc basis without any evidences of personal expenditure of partners claimed as deduction by assessee. The ld CIT (A) has also confirmed the same without giving any reason. As the adhoc disallowances without any evidence is cannot be upheld, therefore, we reverse the orders of the lower authorities and direct the ld AO to delete the disallowances of 1/10th of such expenditure of ₹ 1,75,679/-. Thus, ground No. 3 of the appeal is allowed.
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