TMI Blog2017 (1) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no comparative tabulation with market rate of such payments; if any before arriving at the said conclusion. We accordingly observe that the ld. CIT(A) has erred in directing the Assessing Officer to restrict assessee’s commission payments @3% after observing that the said authority had not been careful before disallowing the impugned payments wherein the assessee has placed on record all possible details in order to discharge its onus on the one hand whereas the commission payments have been held to be excessive without any such comparison on the other. We thus accept assessee’s arguments supporting its sole substantive ground and to direct the Assessing Officer to allow its entire claim of commission payments. The Revenue’s contentions seeking to restore entire disallowance amount are accordingly rejected. - Decided in favour of assessee - ITA Nos. 1981 & 2404/Ahd/2015 - - - Dated:- 6-1-2017 - SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER For The Assessee : Shri Ketan H Shah, A.R. For The Revenue : Shri James Kurian, Sr. D.R. ORDER PER S. S. GODARA, JUDICIAL MEMBER The assessee and Revenue have instituted instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) ITO Vs. Maddi Laxmaiah Co. (P) Ltd. [31 ITJ 71 (Hyd)] (*) Appears to be calculation mistake by the AO. The AO has emphasized that the mere payment by itself does not qualify for deduction in computing the income unless, the necessity for such payment was also shown as for the purpose of business. No recourse to section 40(A)(2)(b) of the I.. T. Act, 1961 has been taken for related parties. On the other hand, the appellant has filed different case laws and distinguished the decision of Swadeshi Cotton Mills Co. Ltd. reported at [63 ITR 57 (SC)] and instead felled on the decision of Anupam Synthetics reported at [104 TTJ 119 (Del.)]. The appellant has filed confirmation from the parties, TDS details, full addresses with PA No. and submitted that in their Pharma business the commission payment is a usual practice and without the payment of such commission, the conducting of business is not expedient. Therefore, it is claimed that the expenditure incurred is genuine through banking channel and the same has been done as it was necessity 0f its business. The fact remains that the AO has not proved that this was non-genuine expenditure. The AO also coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat High Court in the case of Rohini Builders reported at [256 ITR 360 (Guj.)]. The ratio laid down by ITAT, Ahmedabad in the case of Deputy Commissioner of Income Tax Vs. Tyco Valves Control India (P) Ltd. [(2013) 81 DTR (Ahd) (Trib) 48] is relevant and has been relied, Assessee having furnished the statement of commission payment giving the names of the commission agents and the services rendered by them as well as voucher numbers, dates of payments, PANs of the agents, amount of invoices, rate of commission, etc. and the AO having not found the payment of commission to be bogus payments, deduction thereof is allowable. The appellant has submitted copy of appointment letters issued to the commission agents stipulating conditions of their contract, the business plan has been executed and working of commission thereon submitted, indicates that the services have been rendered for appellant's business by these commission agents. In my opinion, the appellant has discharged its onus by filing all possible details including confirmations (of all the nine parties) and TDS and successfully established that the genuine expenditure has been expended for the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,185/- 8 Vidur Corporation 304, Ruturaj Chamber Swastik Cross Road Navrangpura Ahmedabad ALEPT5316R 2,03,704/- 9 Rajendra B.Lattakar Pune Maharashtra AAKHR6322L 2,22,400/- 10 Shreejina Ketan Co. F/61 Satellite Center Ahmedabad- 15 AAEPT5628H 1,90,832/- 11 Mrs.Anantha Laxmi Mysore AGCPA3781A 5,82,043/- 12 Manlax Lifesciences Inc 124, Aashar Enclave Kolshet Road G.B. Road Thane West- 400607 APMPK7685Q 82,917/- 13 Vijay J Shah 1 9/A Jain Merchant Society, Mahalaxmi Five Roads, Paldi, Ahmedabad-7 ANTPS6602C 45,60,648/- Total 67,77,001/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers passed by ld.CIT(A) for A.Y. 2009-10 2010-11 in the case of appellant the addition made against commission payment of ₹ 67,77,001/- is deleted with following remark. However in view of observation made by me, wrt to rate of commission paid by appellant company, the A.O. is directed to allow the claim of appellant after verifying the rate of commission payment and restricting the rate of commission payment @ 3%. Subject to this condition, this ground of appeal is partly allowed. 5. Heard both sides reiterating their respective stands in support of and against the impugned disallowance. Learned Authorized Representative first of all invites our attention to the fact that the very issue had arisen in the preceding two assessment orders as well wherein a co-ordinate bench of this tribunal in Revenue s appeal ITA Nos. 1162 2145/Ahd/2013 decided on 02.03.2013 accepted assessee s contentions to hold that such commission expenses are a routine practice in pharmaceutical business in order to boost the sales. He then states that neither the Assessing Officer nor the CIT(A) have given any cogent reason to adopt a different approach in the impugned assessment order. Ld. Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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