Disallowance of Commission Expenditure, Income Tax

[RAVI SONI]

M/A XYZ & Co. is a seller and M/S DEF & Co. is a purchaser and Mr. A is acting as a middleman / commission agent on behalf of M/S XYZ & Co. ,during scrutiny proceedings the A O disallowed expenditure on commission on the basis that the purchaser party deny to recognize any middleman / commission agent during the course of transaction of purchase of goods from M/S XYZ & Co.

However when notices was send to Mr. A he confirmed to A O that he acted as a commission agent, still the A O disallowed all the commission expenditure just because M/S DEF & Co. i. e. the purchaser party issued a negative reply that no commission agent was involved.

In this regard I want to know that on what basis I can get relief from CIT Appeal.

Posts / Replies

[MARIAPPAN GOVINDARAJAN]

Please send the copy of the order of AO to my email id govind.ayyan@gmail.com for giving further advice.

[Ashok Patil]

Submit the documentary evidences that Mr. A has offered the income earned i.e. commission to tax in his return of income.