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2016 (7) TMI 537 - ITAT CHENNAI

2016 (7) TMI 537 - ITAT CHENNAI - TMI - Disallowance of commission payment to agents - assessee could not produce any evidence for the services rendered by the said three persons/agents - Held that:- The burden heavily lies on the assessee to establish that the said persons/agents have introduced clients/customers to the assessee company. Admittedly, in this case, the assessee fails to establish the names of the clients/customers, who were introduced by the agents to the assessee. In this case, .....

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, in the absence of any evidence on the services rendered by the above said persons to the assessee company, the ld. CIT(A) has rightly confirmed the disallowance made by the Assessing Officer. - Decided against assessee. - I.T.A.No.1778/Mds/2015 - Dated:- 6-7-2016 - Shri Chandra Poojari, Accountant Member and Shri Duvvuru RL Reddy, Judicial Member For The Appellant : Shri N. Muthukumaran, IRS (Retd.) For The Respondent : Smt. R. Ilavarasi, JCIT ORDER PER DUVVURU RL REDDY, JUDICIAL MEMBER: This .....

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filing the appeal in support of affidavit along with medical certificate. By referring to the medical certificate and affidavit, the ld. Counsel for the assessee has submitted that the Managing Director of the assessee company was under medical treatment for Paralysis during January, 2015 and after getting recovered from the illness, the appeal was filed on 31.07.2015. Therefore, he pleaded that there is no willful delay in filing the appeal and prayed for condonation of delay in filing the app .....

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r 2011-12 on 24.12.2011 declaring total income of ₹.1,69,700/- and later the assessee filed revised return on 31.03.2012 declaring total of ₹.4,84,042/-. The case of the assessee was selected for scrutiny and notice under section 143(2) of the Income Tax Act, 1961 [ Act in short] was issued on 16.05.2013. In response thereto, the assessee filed all details. The case of the assessee is that the assessee company has also entered into a contract with M/s. R.S. Gold for managing the day .....

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ssessee as expenditure in the normal course of its business and qualified as business expenditure. The assessee company has paid commission to the parties who had introduced new clients to the commodity exchange. On account of this, the company has earned higher revenue of contractual receipts as it was based on the volume of business done by the clients in the commodity exchange. The commission was also paid to parties for increasing the sales turnover in bullion and jewellery. The assessee als .....

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enditure. However, the Assessing Officer has not accepted the submissions of the assessee and observed that the commission was made for the purpose of the business of sister concern of the assessee and factually did not relate to the assessee s business. Therefore, the Assessing Officer was of the opinion that the expenditure of ₹.26,06,098/- was not wholly and exclusively expended for the purpose of assessee s business. Accordingly, he disallowed and added to the income of the assessee. 4 .....

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essee's business and therefore the expenditure of ₹ 26,06,098/- was disallowed. As seen from the facts submitted by the appellant, there was a contractual agreement entered on the 1st day of April 2008 between the Propx. of M/s. R.S. Gold and the appellant company. The Proprietrix of M/s. R.S. Gold was Mrs. A. Swathi, who held the licence for multi commodity exchange for trading in MCX. The appellant has agreed to undertake the administration of the operations under the MCX licence and .....

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enditure of MCX operations and finalizing the accounts annually. As seen from the P&L Account filed by the appellant, he received a commission of ₹ 31,49,065/- as contractual receipts. As seen from the P&L Account of M/s. R.S. Gold, the gross income received as brokerage at MCX was ₹ 73,72,936/-. During the course of appellate proceedings; the appellant furnished the details of the TDS certificates and the transactions done by their clients and also the details of commission .....

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ature of services rendered by persons receiving the commission has to be established for claiming the commission as expenditure. The appellant could not furnish any evidence to prove that Shri R. Chandrasekar, HUF has rendered any services for payment of commission. 9. Similarly, in the case of Smt. R. Lakshmi an amount of ₹ 4,99,277/- was paid as commission. None of the clients in their KYC norms have stated that they were introduced for the MCX Trading through Smt. R. Lakshmi. There is a .....

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by the appellant company. No services were rendered by Smt. Praveena regarding MCX trading. In the absence of any evidence regarding the nature of services rendered by the above mentioned persons, the commission payments made to them are disallowed. The disallowance made by the Assessing Officer on this expenditure is CONFIRMED. These grounds of appeal are PARTLY ALLOWED. 5. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee submits that the commi .....

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