TMI Blog2016 (9) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... EOW. Moreover, there is nothing on record that the proceedings of EOW were confronted to the assessee in this regard in any manner. Sequence of the facts show that assessee made payment to Eureka Corporation, which was fraudulently cornered by Shri Piyush Chheda and other. As stated above, for the same, Dilip Mehta of M/s. Eureka Corporation filed a complaint for recovery of the amount in question. It shows that Dilip Mehta of M/s. Eureka Corporation has no grievances against assessee. So, the expenditure in question should not be disallowed in the hands of assessee, irrespective of the fact that same has been fraudulently cornered by somebody, for which, separate legal proceeding claimed to be subjudice. Accordingly, this amount in questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Learned Assessing Officer in confirming the additions of ₹ 8,53,910/- on account of Bogus Expenditure disallowed based on the investigations done by EOW, where as details available on the records shows proper care was taken at the time of payment and the Learned Assessing Officer has relied only on the findings of EOW. 2) The Learned Commissioner of Income Tax (Appeal) 5, Mumbai has erred in confirming the action of the Learned Assessing Officer even known the fact that Shri Piyush Chheda was arrested and released on the bail, and these statements were recorded by EOW, which has no relevant on the our Company as we have given these cheques to M/s Eureka Corporation (Prop Dilip Mehta), which was fraudulently enchased by Shri Pi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F.Y. 2002-03 F.Y. 2003-04 Total 1 Piyush Chheda 180682 119755 300437 2 Eureka Corporation 632765 632765 3 Dhaval Naik 356208 101390 457598 Total 536890 853910 13,90,800 In appeal, this addition was confirmed by CIT(A). 2.1 Assessee reiterated the submissions made before the authorities below and submitted that expenditure in question at the hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture of the nature described in Sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of assessee), laid out or expended wholly and exclusively for the purposes of business or profession shall be allowed in computing income chargeable under the head Profits and gains of business or profession . Commission paid to Piyush Chheda and Dhaval Naik should be allowed as business expenditure. Even commission was due/paid and payable to Eureka Corporation. However, these cheques issued to Eureka Corporation were fraudulently encashed by Piyush Chedda and Minal Piyush Chedda. It does not change the colour of liability in the hands of assessee. There is nothing on record to suggest that assessee had not incurred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made of ₹ 1,19,755/- to Piyush Chheda and ₹ 1,01,390/- to Dhaval Naik. Those payments to Piyush Chheda and Dhaval Naik should not be disallowed on the analogy of Eureka Corporation as same have been paid to respective parties against their services rendered to assessee. The facts of Eureka Corporation are different from the payments made to Piyush Chheda and Dhaval Naik. These have been incurred by assessee for the business purpose. So, same should not be disallowed for reasons discussed above. Accordingly, these amounts in question are directed to be allowed. 2.3 As a result, appeal filed by assessee for A.Y. 2004-05 is allowed. 3. In ITA No.7027/Mum/2011 for A.Y. 2003-04, assessee has filed appeal on following grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ureka Corporation. The payments of Eureka Corporation in A.Y. 2004-05 are on different footings and disallowed by Assessing Officer, which has also been deleted by us vide para 2 of this order. However, drawing same analogy i.e. investigation of EWO amount in question has been disallowed by Revenue authorities. In this regard, the stand of assessee is very clear that Piyush Chheda and other were given the amounts in question in lieu of services rendered by them. Even though, these parties committed same fraud with regard to payment to Eureka Corporation in A.Y. 2004-05. It does not mean that the payment made to these parties in respect of their services rendered to assessee also goes bogus. So, relying on the decision for A.Y. 2004-05 on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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