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Deputy Commissioner of Income Tax Circle-2, Surat Versus M/s. Komal Marketing

2015 (10) TMI 1624 - ITAT AHMEDABAD

Disallowance of brokerage/commission expenses - CIT(A) allowed the claim - Held that:- CIT(A) rightly points out that there is no dispute about the impugned payments having been made to the assessee's agents or services rendered in lieu thereof. It has come on record that the assessee's turnover has increased to almost 300% in the impugned assessment year as compared to that in the preceding assessment year. All other supportive material is already on record. The Revenue fails to point out any e .....

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count. The CIT(A) refers to their assessment records, books of account, interest charged along with TDS deducted and also sufficient capital balance for the purpose of advancing ₹ 60,000/ and 40,000/- to the assessee. The Revenue fails to rebut the said factual findings by referring to the case record available in the file. Thus, we affirm the CIT(A) findings accepting the assessee's plea of genuineness/creditworthiness of the impugned deposits thereby deleting the impugned addition of une .....

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t addition of ₹ 1 lac in proceedings under section 143(3) of the Income Tax Act,1961, in short the Act'. 2. We come to Revenue's former ground seeking to restore brokerage disallowance of ₹ 17,06,271/-. The assessee-firm's]business is in trading and brokerage of yarn. It had shown the impugned brokerage sum in its profit and loss account. Its turnover reads ₹ 22,98,81,728/- as against preceding assessment years turnover of ₹ 7,97,28,391/-. It did not claim any .....

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rokers, its payees bills contained summary of sales as well, their duty was procurement of orders, monitoring of timely delivery, collection of payment, settlement of disputes and maintenance of business relations. The assessee stressed that the impugned brokerage was an established business practice. All these pleadings failed to impress upon the Assessing Officer. He observed in assessment order dated 13.12.2010 that the payee-agents had acted as stand alone brokers for assessee only without h .....

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it ought to have deducted TDS at the time of crediting of the brokerage payments instead of that made at the end of the year. This resulted in the impugned disallowance being made in the assessee's brokerage claimed amounting to ₹ 17,06,271/- 4. The CIT(A) has accepted the assessee's corresponding grounds as under: "2.4. I have gone through the facts of the case. There is no dispute that the appellant's business has expanded tremendously - the turnover going up three times .....

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any investigation to show that the evidences provided by the appellant were not correct and that the claim of expenses was not genuine. The A.O. has relied only on doubts which may have come to his mind. Doubts can only be the starting points for an investigation but not conclusive evidence. In absence of any evidence to the contrary, the claim of the appellant which is based on evidence has to be entertained. The addition made is therefore deleted. This ground is allowed." 5. We have heard .....

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ed to almost 300% in the impugned assessment year as compared to that in the preceding assessment year. All other supportive material is already on record. The Revenue fails to point out any evidence in support of its plea seeking to restore the impugned disallowance. We express our agreement with the CIT(A) findings under challenge in these circumstances and reject the Revenue's first substantive ground. 6. This leaves us with the Revenue's second ground seeking to restore unexplained c .....

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imed conveyance, stationery and professional fees on the other side. Bank account of these creditors also allegedly demonstrated nominal balances except in the last week of the year. The Assessing Officer doubted genuineness / creditworthiness of the assessee's explanation and invoked section 68 of the Act for treating the impugned deposits of ₹ 1 lac as unexplained cash credits. 7. The CIT(A) has deleted the impugned addition as under: "3.2. I have gone through the facts of the c .....

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