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2023 (3) TMI 43 - ITAT SURATCommission paid on sales - Allowable business expenses or not? - CIT(A) concluded that the assessee has not file any cogent reply to controvert the finding of Assessing Officer and he merely stressed that the payments were made for the purpose of business whereas enquiry concluded by Assessing Officer disproved the claim of assessee - HELD THAT:- We find merit in the submissions of the ld AR for the assessee that commission was not paid to his father and brother rather it was paid for smooth and timely execution of the orders/ contracts. Such facts are not controverted by the assessing officer. Also in the reply in response to notice u/s 133(6) Sumitomo chemicals India Pvt. Ltd. in response to question No. 2 they specifically stated that Kishore Shah and he was instrumental in sourcing purchases made from Shah Industrial Products during the F.Y. 2013-14, similar reply was given by Khalpana Industries(India) Limited in response to notice under Section 133(6) replied that they know Mr. Chintan Shah, who was instrumental in sourcing purchase from Shah Industrial products, copies of such replies are available - thus find that the assessing officer has given contrary finding. There is no finding of AO that the commissions paid to both the parties are excess or unreasonable. No comparable stances are given by the assessing officer. Commission payment is ranging from 3 % to 5% is not unreasonable keeping in view the alleged assistance rendered by the persons to whom such commission is paid as they were having sufficient experience in the business of assessee. Similar commission payment was allowed in subsequent assessment year. Thus, no justification in making disallowance of entire commission expenses - we direct AO to delete the entire commission payment disallowances - Grounds of appeal raised by the assessee is allowed.
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