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TMI Blog2012 (12) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... oo without assigning any proper reason". "On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) erred in confirming the disallowance of an amount of Rs.35,45,632/- being commission expenses incurred in connection with carrying on the business of the Appellant and that too without assigning any proper reason". "On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) erred in confirming the disallowance of an amount of Rs.30,57,943/- being Bad Debts written off during the year and that too without assigning any proper reason". The assessee was a partnership firm, later converted into a company, engaged in the business of manufacture, sales and services of electrical weighing scales. In this case, the original assessment for A.Y. 2002-03 was completed vide order u/s. 143(3) dt. 31-03-2003. Subsequently, vide order u/s. 263 of the Act dt. 16-03-2005, the CIT City 23, Mumbai set aside the original assessment with a direction to complete the same de-novo holding that the original assessment is erroneous and prejudicial to the interest of revenue. While set-asiding the order, the CIT 23 concluded that the assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of the lower authorities. 2.3. We have heard rival submissions. If the payment have been made during the financial year or before filing of return amount in question has to be allowed. We are of the opinion that matter should be remitted back to the file of the AO to verify the claim made by the assessee. Ground No. 1 is set aside. 3. Ground of Appeal No.2 is about disallowance made on account of gifts and presentation amounting to Rs.30.32 lakhs. AO has dealt the issue as under : "The assessee claimed that expenses on gifts and presentations were incurred on the following category of persons: i) Bankers including bankers at branches. ii) Consultants - Income tax, Sale tax, Excise and Weights and Measures. iii) Weights and measures Department - Inspectors, Assistants and Peons - These personnel are all the branches are considered. Roughly there are around 5 to 7 Inspectors, 15 to 20 Assistants and 10 to 12 peons. In Metro cities there could be around 100 officers, 100 assistants and 20 to 30 staff. iv) Sales-tax department at Mumbai and other branches. v) Employees of the Telephone, Electricity and Octroi department. Further, from the charts enclosed (annexur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e noted. The assessee's argument is that commission paid is part of the salary in most of cases. Along with this explanation, the assessee has submitted a list of only 6 persons that too without mentioning their respective amounts paid. The commission payments claimed to have been made is very huge. The assessee is bound to give full details of the claim and prove that such a huge amount is in fact incurred for payment against certain services. Towards this, he has to furnish name and full address of each and every party/employee, copies of agreements entered into, if any and the nature of services rendered entitling them for such a payment. All these details are absent in the assessee's case. The fact that the assessee has been selling their goods through the network of authorised dealer also goes to prove that such expenses are not actually incurred. On the facts of the case, I hold that the assessee has failed to discharge the onus cast upon it to prove the expenditure claimed and as such the same requires to be disallowed. For the foregoing I hold that the assessee's claim in this regard is not allowable and the entire claim of Rs.35,45,632/- is being disallowed while computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services as they were instrumental in building up the assessee's brand-name. It therefore goes to show that there is no dispute between the assessee and the purchasers' of the assessee's goods. In fact, the assessee itself admits that upon termination of the dealership agreements, the assessee directly sells their goods to the customers as a result of building up the brand-name of their goods if the cheques are issued in assessee's favour by the purchaser. In such a situation, the assessee can always approach the purchasers of their goods and appraise them of the facts and recover the dues if at all remaining to be paid. There is no trace of such an action taken by the assessee. It is also not known whether cheques are issued by the purchasers in favour of the assessee or in favour of the dealers. If cheques are not issued in favour of the assessee but in favour of the dealers by the respective customers and if the dealers have in fact encashed the cheques without making the payments to the assessee, that becomes an irrefutable evidence against the dealers who are liable for cheating and punishable under the IPC. There is no trace of evidence to show that the assessee has initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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