TaxTMI 
TaxTMI 
2016 (6) TMI 928
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....decided in this appeal is as to whether the trading liability standing in the name of M/s Peekay Associates amounting to Rs. 77,258/- could be added in the facts and circumstances of the case. 2.1. The brief facts of this issue are that the Ld. AO found that an amount of Rs. 77,258/- was shown under Sundry Creditors relating to the party M/s. Peekay Associates. Information as to genuineness of the said credit amount was called for from the party, M/s. Peekay Associates by issuing notice u/s. 133(6) of the Act. Since no satisfactory reply was received from the party the AO required explanation in this regard from the assessee. The assessee submitted that this was the balance amount being carried forward from FY 2008-09. The AO without makin....
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.... settled in the next financial year towards the liability. In response to this, the Learned AR stated that he has got no objection for the bench to set aside this issue to the file of the Learned AO for verification of the aspect of subsequent settlement made to the concerned sundry creditor. 2.3. We have heard the rival submissions and perused the materials available on record. We find that the provisions of section 41(1) of the Act could be invoked towards cessation of liability only in the event of revenue proving the fact of assessee deriving some benefit out of this transaction. In the instant case , the assessee claims that the liability has been settled in the subsequent financial year which fact has not been verified by the Learned....
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....t maintained by the assessee which was duly audited by an authorized auditor. All the payments were made through account payee cheques and the necessary tax was deducted at source. The parties being not aware of the existence of such brokers informed that the sales were made directly to the assessee. The Ld. AO was not satisfied with this explanation and treated the payment of brokerage of Rs. 43,20,020/- except one paid to M/s. Modern Laminators Ltd. as bogus and fabricated with an intention to conceal the actual income. 3.2. Before the Learned CIT(A), the assessee stated as follows:- "i) The assessee intended to purchase goods which fact was brought to the knowledge of the broker, M/s. Timespact India Ltd. ii) The broker, M/s. Timespa....
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.... business activities. The details of such payment along with documentary evidences were submitted before the Ao during the course of assessment proceedings." 3.3. The Learned CITA observed that the assessee had paid brokerage of Rs. 43,20,020/- to M/s Timespac India Ltd who had confirmed the receipt of commission from the assessee. He held that the commission was paid by the assessee to M/s Timespac India Ltd who had introduced the assessee with the suppliers of goods. The genuineness of purchases made by the assessee from those parties were not disputed by the Learned AO and he further observed that it is not the case of the Learned AO that the commission paid to the party has flown back to the assessee. Accordingly he deleted the additi....
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....ia Ltd to whom the assessee had paid commission at an agreed rate which fact has also been confirmed by M/s Timespac India Ltd. It is not in dispute that the Learned AO had accepted the commission payment made to M/s Timespac India Ltd in respect of purchase made from one party and allowed the same as deduction. In respect of remaining 5 parties from whom purchases were made by the assessee, though the purchases were accepted as genuine, the Learned AO had only disputed the payment of commission to M/s Timespac India Ltd in respect of such purchases. We find from the confirmation letters of 5 suppliers that they had categorically stated that the assessee was introduced to them through a broker. The broker in the instant case needs to be und....