TMI Blog2010 (6) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... yments as necessary expenditure incurred for the purpose of carrying on of the business.In favour of assessee. Unexplained cash credit - as per AO advance stated to be received from the said party has not been proved by the assessee - Held that:- The circle of the transaction has been established by the assessee by providing the different links of the transactions with documentary evidence. The amount was in fact received by the assessee as advance against supply of machineries. This position is proved by the materials evidencing the sale of machineries to M/s. Kartika Metal Crushers and adjustment of the advance against the billed amount. The accounts itself show that the advance amount has been subsequently converted into sale proceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of commission. 3. In the course of assessment proceedings, the Assessing Officer on the basis of scrutiny of accounts and details, made the following additions to the total income returned by the assessee : (a) Credit purchase in the case of M/s. Hydrotech, Tamilnadu, for want of confirmation letter Rs. 2,34,000. (b) Advance received from M/s. Kartika Metal Crushers, Kerala, as unexplained cash credit Rs. 2,10,000. (c) Out of commission payment of Rs. 35,29,282, the Additional Commissioner of Income-tax has disallowed Rs.35,02,932. 4. In the first appeal, the Commissioner of Income-tax (Appeals) deleted the additions of Rs. 2,10,000 and Rs. 35,02,932 respectively made with reference to M/s. Kartika Metal Crushers, Kerala and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e genuineness of payments made towards commission. (viii) The Commissioner of Income-tax (Appeals) has also erred in appreciating the fact that the assessee had even failed to produce the confirmation letters from those parties who were in receipt of commission. (ix) The Commissioner of Income-tax (Appeals) should have appreciated the fact that enquiries were conducted through Inspector of Income-tax in respect of local parties where letters were issued and returned unserved by postal authorities parties not traceable in the given address." 6. We heard Shri C.R. Janardhan, the learned Additional Commissioner of Income-tax appearing for the Revenue and Shri Ganesh Rao, learned counsel appearing for the assessee. 7. The amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disallowance of Rs. 35,02,932 relating to commission, the Commissioner of Income-tax (Appeals) found that the assessee had paid commission of Rs. 35,29,282 which was one of the predominant factors which helped the assessee to procure a turnover of Rs. 20,92,15,472 in the previous year relevant to the assessment year under appeal. The Commissioner of Income-tax (Appeals) found that the payments of commission made by the assessee are supported by confirmation letters received from the payees. The Commissioner of Income-tax (Appeals) also found that in all such cases of commission payments, the assessee has deducted tax at source and remitted the same to the credit of the Central Government and the TDS particulars were filed before the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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