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TMI Blog2011 (12) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in deleting the addition amounting to Rs. 1,39,50,088/- made on account of disallowance of claim of commission paid, without taking into consideration all the relevant provisions of the I T Act, 1961. 3. The learned CIT(A), as an authority, whose powers are coterminus with that of the Assessing Officer, has erred in deleting the addition relying only on the remand report submitted by the Assessing Officer, without examining the details/evidence filed by the assessee in course of the appeal proceedings, as per which payments of commission were made to certain parties exceeding the prescribed limit during the relevant previous year on which tax was required to be deducted at sour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 143(1) of the Act. Later on the case was selected for scrutiny. During the course of assessment proceedings, the AO noticed that the assessee had paid commission of Rs. 1,52,28,784 and the sale effected by the assessee was Rs. 6,83,31,749, as such commission payment was more than 22% of the sales. The AO asked the assessee to provide details of commission paid, the assessee submitted that the commission was paid to taxi drivers or bus drivers who brought customers to his shop and the nature of commission was secret commission for which absolute secrecy has to be maintained as the customers may not make purchases if they came to know that commission was taken by the persons bringing them to the shop. When the AO asked the assessee wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Corporation (KSTDC) stating that royalty of Rs. 2,00,000/- (which is nothing but commission paid) for stopping of its tourist sightseeing vehicles as Annexure 3. 4. Copy of the letter dated 28-12-2007 of M/s.KSTDC regarding the royalty paid for stopping of KSTDC local sightseeing buses as Annexure - 4. 5. Copy of the letter dated 26-05-2009 of M/s. KSTDC regarding the royalty paid for stopping of KSTDC local sightseeing buses as Annexure - 5. 6. Copy of the letter dated 09-03-2010 of M/s. KSTDC regarding the royalty paid for stopping of KSTDC local sightseeing buses as Annexure-6. 7. Copy of the letter addressed to Mapple -The Golden Chariot for payment of Royalty / Commission for shopping at the appellant's business premis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is submitted that the appellant has paid commission to the drivers and guides, which do not attract the provisions of TDS and that the payment made to the drivers are supported by documentary evidences as are in vogue in this line of trade. In as much as the learned AO has doubted the payment of commission at the rates claimed, the learned AO allowed only 2% of the turnover as deduction on estimate basis. It is submitted that, the appellant has since secured affidavits from some of the drivers and guides, explaining the trade practice as well as confirming the receipt of commission from the appellant. Please find herewith enclosed the samples of affidavits executed by the drivers and their licenses as Annexure-8(1) to 8(22) and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of remand proceedings, the details furnished by the assessee have been carefully perused. Annexure- 3 to 7 appended to the written submissions substantiate that the assessee has incurred expenditure by way of royalty to one of the govt. owned organizations namely Karnataka State Tourism Development Corporation for stopping the Bangalore sight seeing coaches at the business premises of the assessee. The other documents submitted in connection with the payment towards travel agents for bringing the customers (tourists) to the business premises of the assessee. The details of Identity of the drivers and the commission paid have been verified and found to be in order. 3. In order to further ascertain as to whether the assessee has been maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment proceedings, but those were furnished to the ld. CIT(A) as additional evidences and the ld. CIT(A) confronted all those evidences to the AO, who accepted in his remand report that the commission paid by the assessee was reasonable. Therefore, the ld. CIT(A) was justified in deleting the addition. 11. We have considered the submissions of both the parties and gone through the material on record. In the instant case, the AO in his remand report has accepted that the assessee incurred expenditure by way of royalty to the Government organization viz., KSTDC for stopping the Bangalore sight seeing coaches at the business premises of the assessee and that the other documents submitted in connection with the payment towards trav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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