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The Commissioner of Income Tax-8 Versus M/s. Vritti Impex Pvt. Ltd.

2016 (5) TMI 117 - BOMBAY HIGH COURT

Disallowance u/s 37 - allowable business expenditure - Held that:- We find that two Authorities have taken a concurrent view that the expenditure of ₹ 1.13 crores is for business purposes i.e. increasing its sales and was in fact incurred. Therefore, allowable as deduction under Section 37 of the Act. The view taken by the Commissioner of Income Tax (Appeals) as well as the Tribunal is essentially a finding of fact. The view taken is a possible view on the facts and the same has not been s .....

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5 - BOMBAY HIGH COURT) wherein held there was no occasion to deduct tax at source in respect of the payment made to the nonresident agent. The income of nonresident commission agent cannot be considered as income arising or accruing in India. Therefore, the provisions of Section 40(a)(i) would have no application - Decided in favour of assessee - Income Tax Appeal No. 2370 of 2013 - Dated:- 26-4-2016 - M. S. Sanklecha And A. K. Menon, JJ. For the Appellant : Mr. Arvind Pinto For the Respondent : .....

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isallowance made by the Assessing Officer of the payment of ₹ 1,13,24,831/claimed by the assessee, without appreciating that the assessee had failed to substantiate the allowability of the said expenditure in terms of Section 37(1) of the Act ? (ii) Without prejudice to the Revenue's stand that the impugned deduction claimed by the assessee on account of payment to Mr. J.V. Smith is not allowable, whether on the facts and circumstances of the case and in law, the Tribunal was justified .....

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ubject assessment year, the respondent assessee paid commission of ₹ 1.13 crores to one Mr. John V. Smith for the purposes of promoting sales of plywood in foreign countries. The Assessing Officer disallowed the payment of commission of ₹ 1.13 crores. This inter alia on the ground that the agreement is on the letter head of the respondent assessee and not on a nonjudicial stamp paper nor it is registered with a competent Authority. Besides, the agreement mentions the name of the agen .....

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1.13 crores paid as commission for sales was disallowed under Section 37 of the Act. This resulted in adding ₹ 1.13 crores to respondent assessee's income. (b) Being aggrieved, the respondent assessee carried the issue in appeal to the Commissioner of Income Tax (Appeals). On examination of all facts it records that commission is being paid to Mr. John Smith since 2002 and it is for the first time in the subject assessment year that it is sought to be disallowed. Besides, it records t .....

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h and Mr. Jonathan Smith are one and the same person and the commission was in fact paid to this person as shown in his bank account. The aforesaid information was forwarded to the Assessing Officer for his remand report. The Assessing Officer pointed out that as the documents are self serving and that an appellate authority should not entertain further evidence. The Commissioner of Income Tax (Appeals) on consideration of all the facts finally came to the conclusion that the payment of ₹ .....

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