TMI Blog2011 (12) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 - Akil Kureshi, Sonia Gokani, JJ. Manish J. Shah for the Appellant JUDGEMENT Akil Kureshi: Assessee is in appeal against the judgment of the Tribunal dated 19.3.2010 raising following questions for our consideration: "A. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in disallowing Rs.17,163,500/- paid to Nipun Finvest P. Ltd.? B. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in disallowing Rs.10,30,954/- being reimbursement of salary of Dr.Bomi B. Patel and U.A.Maroo, the Sr. Technical and Financial Executives of M/s.Gharda Chemicals Ltd. under section 40A(2)(b) of the I.T.Act, 1961 ? C. Whether on the facts and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement dated 19 th May 1999 between the assessee and Nipun Finvest Pvt. Ltd. in support of such claim. It was the case of the assessee that in furtherance of the said agreement, Nipun Finvest Pvt. Ltd. had rendered assistance for which commission was paid. The Assessing Officer, however, disallowed the claim observing as under: "7.1 From the above, it is clear that the terms for payment of commission were fixed vide letter dated 19 th May 1999. However, the details of payment given in the debit note shows that payments of Rs.5 lac each towards commission were made on 20.4.99 i.e. before framing of terms vide letter dated 19.5.1999. It is further noted that the assessee has given loan of Rs.4,50,00,000/- to Nipun Investment Pvt. Ltd., a a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d vide letter dated 19.05.1999, Rs.50,00,000 was paid to M/s.Nipun Finvest P. Ltd. on 20.4.1999. Further all the commission payments were in round figures such as Rs.5 lacs, Rs.7 lacs, etc. whereas if it was worked out at percentage of sales it was not likely to be in round figures. The onus is on the assessee claiming deduction for payment of commission to establish that payments had been made for services rendered. There is nothing to suggest in the impugned orders that the aforesaid party had rendered any serviles to the assessee nor the ld. AR appearing on behalf of the assessee referred us to any such evidence. Mere existence of an agreement, without anything more, is not enough for disallowance of deduction (Lachminarayan Madan Lala v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of law arising. Therefore, such question is not required to be considered. With respect to question D, the assessee claimed deduction of Rs.10.80 lacs paid to one M/s. Gharda Chemicals Ltd. for imparting training to the employees of the assessee company for use of software. The assessee relied on the licence agreement dated 9 th July 1997 between Ramco Industries and Gharda Chemicals Ltd. to permit use of such software by its subsidiaries and associate concerns including the assessee. The Assessing Officer, however, disallowed the claim of the assessee making following observations: "The assessee claimed Rs.50 lac towards ERP software expenses. The assessee has furnished copy of agreement entered into by GCL with RAMCO S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following observations: "17. We have heard both the parties and gone through the facts of the case as also the decision relied upon. As regards claim for deduction of expenditure of Rs.10,80,000/- the AO found that these were adhoc charges levied by GCL without any basis whatsoever. Since the assessee neither furnished any details/evidence of services rendered by GCL to the assessee nor established the genuineness of expenditure to the tune of Rs.10.80 lakhs, the AO disallowed the same. Before the Ld. CIT(A), the assessee claimed that expenditure is on training for operation of the aforesaid software and had been reimbursed to Gharda Chemicals Ltd. However ld. CIT(A) observed that this statement was not substantiated by any evidence of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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