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TMI Blog2015 (12) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... ents. b) Confirming the said addition on ad-hoc estimated basis without pointing out any deficiency in the information and evidence submitted or in respect of any particular agent. c) Ignoring that once the services are proved then the quantum of payment for the said services is the sole discretion of the businessman. d) Thus, the ad-hoc disallowance of commission so confirmed on estimated basis ignoring the evidences placed on record should be deleted. 2. The appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal either before or at the time of hearing. 2. The brief facts of the case are that the assessee is a company incorporated under the provision of Companies Act, 1956. It is engaged in the business of manufacturing and selling of off-set printing machines both in domestic market as well as in foreign market. The assessee-company filed the return of income for the assessment year 2007-08 on 31.10.2007, declaring total income of Rs. 22,20,87,977/-. Against the said return of income, the assessment was completed at a total income of Rs. 24,61,85,400/-. While doing so, the Assessing Officer disallowed the commission paid of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to produce any evidence in support of services rendered by the commission agents. The addition made on this account was confirmed by CIT(A)-XIX, New Delhi, vide order dated 20.08.2007 in Appeal No. 119/2006-07. The Hon'ble ITAT and Hon'ble High Court allowed the expenses on account of money paid to the commission agents. However, the department has decided to go on SLP against the order of Hon'ble High Court. In A.Y. 2005-06 & 2006-07, the matter has been decided by the Ld. CIT(A)-XIX, New Delhi by following the order of Hon'ble ITAT in A.Y. 2004-05. Since the nature of the commission in this year is more or less the same therefore to keep the issue alive the amount of money given by the assessee company to its commission agents is being disallowed and added to the income of the assessee which is being discussed in the following paras of the assessment order." 17.2 Moreover, on-third of the commission expenditure was paid to old parties as mentioned in the para 9 above. 18. The facts being the same, following the appellate orders for 2005-06 & 2006-07, the disallowance is restricted to 5% of the commission expenditure of Rs. 2,15,36,567/- claimed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made exclusively and wholly for the purpose of assessee's payments might have been made. It is still open to the Income Tax Officer to consider the relevant facts and determine for himself whether the commission set to have been paid to the selling agents or any part thereof is properly deductible under Section 37 of the Act." 8. Thus, the Assessing Officer is empowered to probe further and reache at a conclusion whether the commission was paid for the services actually rendered and determine whether the expenditure was laid out wholly and exclusively for the purpose of business. In the present case, the Assessing Officer had called upon the assessee company to furnish evidence in support of the services rendered by the commission agents. In response to this, vide its letter dated 23rd December, 2009, except highlighting the role of commission agent, no evidence was furnished in support of the services rendered by the commission agent. Even before us, the learned Authorized Representative miserably failed to demonstrate before us as to what kind of proof was filed before the lower authorities in support of services rendered by the commission agent. Thus, the assessee failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any inquiry conducted to prove the non-genuineness of the transactions the departmental authorities were not justified in disallowing the claim of the assesee which was fully supported by the documentary evidence on record." 9. From the above, it is clear that the Hon'ble High Court had come to conclusion that the commission payment is allowable only because the Assessing Officer had not made any inquiry about whether the assessee had given full details of the commission payment as well as the aspect of rendering of services Whereas in the present assessment year the assessee company chosen not to file any evidence in respect of the services rendered by the commission agent. Therefore, the reliance placed by the learned Authorized Representative on the decision of the Hon'ble Delhi High Court is totally misplaced. A coordinate bench of Tribunal of Delhi High Court in the case of Kanu Kitchen Kulture (P.) Ltd. Vs. DCIT, (2013) 28 ITR (T) 49 (Delhi-Trib.), held that whether the assessee failed to demonstrate the services rendered by the commission agent, the commission was disallowed. The relevant paragraphs of the judgment are reproduced below: "22. Thus the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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