TMI Blog2013 (12) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... ablished and identified the vehicles sold through bill number date and parties to whom the vehicles were sold - The nature of assessee's business are that such liaison work is necessary for selling and such liaison work is in the form of service rendered for selling the vehicles - Merely having friends and relatives, adverse inference cannot be drawn particular by under the circumstances of the case and it is established that these persons have rendered service against the commission paid – Decided in favour of assessee. - ITA Nos. 433 & 537/Agra/ 2012 - - - Dated:- 23-8-2013 - Shri Bhavnesh Saini And Shri A. L. Gehlot,JJ. For the Appellant : Shri Rajendra Sharma Shri Manuj Sharma, Advocates For the Respondent : Shri K. K. Mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has made the ad-hoc addition of 10% out of travelling expenses without furnishing any specific expenses, which are not incurred for the purpose of the business. Since the assessee has incurred the expenditure wholly and exclusively for the purpose of the business of the assessee, the ad- hoc disallowance cannot be made. We, therefore, find that the expenditure incurred for the purpose of business is allowable under Section 37 of the Act and accordingly delete the addition of Rs.34,160/- made by the A.O. out of the travelling expenses. 5. As regards, the disallowance out of commission expenses, the A.O. disallowed 10% of the commission expenses. The assessee filed appeal before the CIT(A). The CIT(A) enhanced the addition to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculars 31.03.2007 31.03.2006 Sanjay Vaishya (Rs.60000+Rs.40000) 1,00,000/- Krishan Kumar Goyal 50,000/- 50,000/- Narendra Vaishya 50,000/- 40000/- Anuradha Vaishya Gwalior 1,20,000/- 1,50,000/- Rajeev Agarwal 1,50,000/- 80,000/- Naveen Kumar Goyal 1,00,000/- 50,000/- 8. It was submitted that the commission to Sanjay Vaishya was paid on account of 41+Str school bus supply to Hindustan College of Technical Education vide Bill No. 002, dated 05.05.2006. The commission paid to Krishan Kumar Goyal was paid on account of 41+1 Str school buses supply to Holy Public School, Agra, Holy Nursery P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iaison work is required for selling these vehicles particularly which are to be supplied to schools colleges and charitable institution etc. The concerned parties have clearly established and identified the vehicles sold through bill number date and parties to whom the vehicles were sold. The nature of assessee's business are that such liaison work is necessary for selling and such liaison work is in the form of service rendered for selling the vehicles. Once it is found that these parties have rendered services for selling the vehicles. The commission expenses are liable to be incurred. Apart from the fact that these parties have rendered services against the commission received, the parties have also assessed to tax and commissions receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed details and from which it is established that the commission was paid against the services rendered. 11. We, therefore, find that the CIT(A) is not correct in enhancing the addition and A.O. has also not correct in making ad-hoc disallowance. We, therefore, delete the entire addition made by A.O. and enhanced by the CIT(A). The claim of the assessee on account of commission is allowed. In the result, the appeal of the assessee is allowed. ITA No. 537/Agra/2012 by the assessee:- 12. The grounds raised in this appeal are in respect of levy of penalty of Rs.1,74,420/- under Section 271(1)(c) of the Act. The CIT(A) enhanced the addition to the extent of Rs.5,70,000/- out of the disallowance of commission as against the addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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