TMI Blog2013 (11) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, in the interest of justice matter is restored back to the file of the AO to adjudicate afresh the issue of disallowance of commission payment to three parties - He is directed to afford a reasonable opportunity of hearing to the assessee-firm - Decided in favour of assessee. - ITA No.506/Mum/2011 - - - Dated:- 19-4-2013 - I P Bansal and Rajendra, JJ. For the Appellant : Shri Nishit Gandhi For the Respondent : Shri Om Prakash Meena ORDER:- Per: Rajendra: The present appeal is directed against the order dt. 29-10-2010 passed by the CIT(A)-31, Mumbai. Following Grounds of Appeal have been raised by the assessee: The learned Commissioner of Income tax (Appeals)-31,Mumbai [ the ld. CIT (A) ] erred in confirming the assessment framed by the Assistant Income- tax-20 (3), Mumbai, [ the A.O. ] without not giving sufficient, proper and adequate opportunity of being heard to the Appellant while framing the assessment. 1.2.While doing so, the ld. CIT (A) also erred in not admitting the additional evidences brought on record by the Appellant; 1.3.It is submitted that in the facts and the circumstances of the case, and in law, the assessment order b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above, and in the alternative it is submitted that the disallowances are arbitrary and excessive. 6.1.The ld. CIT (A) erred in confirming the action of the A.O. whereby the A.O. made a disallowance of the commission payment made to the following parties: Commission paid (i) Shri Janet D'.souza Rs. 9, 48,687/- (ii) Verinica John Rodrigues Rs. 75,894/- (iii) Anil V. Patel Rs. 19,268/- Total 10,43,849/- 6.2.While doing so, the CIT (A): (i) erred in making erroneous and misleading averments in assessment order; and (ii) failed to appreciate that the Appellant had sought to produce two parties before the A.O. and sought to produce confirmation from all the three parties. 6.3.Without prejudice to the above, the CIT (A) erred in: (i) basing his action purely on surmises, conjecture and suspicion; and (ii) by taking into account irrelevant and extraneous considerations wale ignoring relevant and material considerations. 6.4.It is submitted that in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee preferred an appeal before the First Appeal Authority (FAA). After considering the submissions of the assessee and the assessment order he held that the AO was fully justified in disallowing a sum of Rs. 3,44,237/- (i.e. 6,51,947-1,89,830-1,17,880) by invoking the provisions of Section 40(a)(ia) of the Act on account of commission, professional fees and contractor/subcontractor charges paid by the appellant as the TDS on the same was deposited late into the government account, that claim of the assessee about the TDS deducted and paid on time in respect of the payments of Rs. 1,89,830/- and Rs. 1,17,880/- was correct and justified as per the chart prepared by the AO in this regard, that the payments made to this extent were already subjected to TDS and the tax deducted was paid into the government account within the due date prescribed under the Act, that the AO was not justified in disallowing the same by invoking the provisions of Section 40(a)(ia) of the Act. Disallowance made by the AO to that extent was directed to be deleted. 3.3. Regarding clearing and forwarding charges paid of Rs. 24,37,510/-, he held that appellant could not rebut the findings of the AO that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduce above parties. The AR of the assessee requested for one more opportunity to produce the above parties / file confirmation. Accordingly, AO granted time up to 24- 12-2007. On that date confirmations in respect of some parties, to whom commission had been paid, were filed, but the AR did not produce the above parties and confirmation of Shri Janet D souza,Verinica John Rodrigues were also not filed.AO held that there was nothing on record to prove that the services were actually rendered for which the commission had been paid, that there was no basis for quantification of such commission ,that there was no written agreement also to justify the claim made, that there was no justification in form of any evidence to prove the allowability of disproportionate increased claim; especially when the receipt of the assessee had remained almost the same as that of last year. Considering the Disproportionate Increase in the claim of Commission payment and in the absence of any evidence to justify the claim, the commission payment made to the above three parties amounting to Rs. 10,43,849/- plus 20% of balance commission payment which worked out to Rs 7,76,485/- was disallowed and added ..... X X X X Extracts X X X X X X X X Extracts X X X X
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