TMI Blog2012 (10) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of expenses amounting to ₹ 35,86,519 paid to M/s. Spectrum synthetics Pvt Ltd., on account of services rendered to the Co in dealings with M/s. Radhika Synthetics Limited. 2. That the Hon ble CIT(A) has erred in not directing the AO to issue summons to M/s. Radhika Synthetics who were under the proceedings of the Debt Recovery Tribunal and to M/s. Spectrum synthetics Pvt Ltd., in whose case the court receiver had been appointed, for confirmation of the transations with them and for nature of services rendered by the broker Spectrum Synthetics Pvt Ltd. 3. That the Hon ble CIT(A) has erred in law and facts of the case in not appreciating that the facts of the case that there is no special relationship exists between the appellant company and M/s. Radhika Synthetics Pvt Ltd., and hence the payment of commission to Spectrum Synthetics Pvt Ltd. for dealings with M/s. Radhika Synthetics Pvt Ltd., being genuine, additions of the same should have been deleted. 4. That the Hon ble CIT(A) has erred in law and facts of the case in not directing the ld AO to disallow only the amount of Air tickets expenditure incurred on the air ticket of wife of the executive who accompa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding the nature of services rendered by M/s. Spectrum Synthetics Pvt Ltd. alongwith confirmation from the said party together with name, address, income tax assessment particulars, etc. However, assessee stated that above named company had been attached by the Hon ble High Court of Bombay and as the directors of the said company are absconding, assessee required time for furnishing the required explanation. AO stated that later on assessee furnished an explanation claiming that the said company had introduced it to trading in fabrics which is a new line of business to the assessee and that commission had been paid at 2% in addition to brokerage of 5%, which is a common trade practice. AO did not accept the said explanation of the assessee and claims were disallowed. Assessee filed appeal before ld CIT(A). ld CIT(A) confirmed the action of AO for the reasons stated by ITAT in its earlier order dated 25.4.2006 in I.T.A. No.141/M/2002 in para 3 in appeal filed by assessee as under: 3. CIT(A) confirmed AO s action for the reasons that : (i) payment had been claimed not only on sales but also on purchases, which is unusual.(ii) The commission had been claimed to have been made for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id is not a sister concern and also that the party to whom commission and brokerage have been paid being under recovery proceedings, it is not in a position to furnish required information before the lower authorities, are claims which have to be considered in the proper perspective by the lower authorities,. We are of the opinion that since these facts have a bearing on the rejection of assessee s claim, that it would be in the interest of justice that the matter should be set aside to the file of the AO to consider appellant s claim afresh in the light of the above. We are of the opinion that this fact being relevant to the issue, requires examination at the level of AO and hence, the affidavit filed by the AR only being in support of a fact being set aside for verification, DR s arguments regarding its validity are not relevant. Appellant is directed that it not having brought on record these facts earlier, that it is its responsibility to furnish the same before the AO in support of its claim without any failure on its part. With this view, this ground is set aside for fresh consideration by heA is treated as allowed only for statistical purposes 7. Pursuant thereto, AO iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been able to prove the business expediency behind the said payment though onus u/s 37(1) lay on it. The appellant has also not been able to establish that it did not have any relationship with Spectrum Synthetics who were paid commission. The appellant has failed to adduce evidence any regarding the nature of services rendered by Spectrum Synthetics Pvt. Ltd. along with confirmation from the said party together with the name, address, income-tax assessment particulars. Reference to earlier correspondences made and PAN detail of Radhika Synthetics is not relevant to the issue under consideration. Thus, the appellant has failed to comply with the directions of the H n ble ITAT and in such situation, there is no infirmity in the conclusion drawn by the AO which is upheld. 9. Hence, assessee is in further appeal before the Tribunal. 10. At the time of hearing, ld A.R. contended that M/s. Radhika Synthetics Ltd., as well as M/s. Spectrum Synthetics Pvt Ltd., who introduced Radhika Synthetics Ltd., to the assessee are not sister concern. He submitted that both the said companies have gone into liquidation and, therefore, assessee could not furnish requisite details. Ld A.R. refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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