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D.H. Patkar and Co. Versus Income-Tax Officer

2016 (5) TMI 106 - ITAT MUMBAI

Disallowance of commission payment - Held that:- The impugned disallowance merits deletion as these payments have been made by the assessee on behalf of its clients and, hence, the same does not constitute its own expenditure.

Even though the assessee has routed the expenditure and reimbursement received from its clients through the profit and loss account, yet it is settled principle that the books of account of the assessee cannot be the sole determinative factor to decide about the .....

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paid to the workers have not been disproved. Even otherwise, we have noticed earlier that the same represents payments made on behalf of its clients and, hence, the disallowance of the same is not called for in the hands of the assessee. - Decided in favour of assessee - I. T. A. No. 4524/Mum/2013 - Dated:- 18-3-2016 - B. R. Baskaran (Accountant Member) And Ramlal Negi (Judicial Member) For the Petitioner : Jignesh R. Shah For the Respondent : B. S. Bist ORDER B. R. Baskaran (Accountant Member) .....

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parties and perused the record. The assessee is a partnership firm and is engaged in clearing and forwarding agency business. The assessee claimed expenditure towards commission payment to the tune of ₹ 34,60,000. The assessee did not furnish the relevant details but submitted that it represents speed money paid to the dock workers on behalf of its clients. However, the Assessing Officer took the view that these payments are in the nature of bribes and, hence, the same cannot be allowed a .....

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ars that it represents the assessee's own expenses. The learned authorised representative invited our attention to the copies of bills raised upon its clients to support this contention that it was incurred on behalf of its clients. He further submitted that the assessee was constrained to incur these expenses upon the instructions of its clients in order to get their job of loading and unloading done quickly. He submitted that it is a prevailing practice to incentivise the dock workers by p .....

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