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TMI Blog2017 (11) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before us. Precise observation of CIT(A) was as under:- 6.2.1 Vide these grounds the appellant has agitated against assessing commission income of Rs. 7,33,360/- under the head 'income from other sources' instead of 'business income.' In para 4 of the assessment order, the ld. A.O. mentioned that the appellant company had shown to have earned other income of Rs. 7,55,799/- which comprises of commission income of Rs. 7,33,360/-. During the course of assessment proceedings, the ld. A.O. inquired about the nature of commission income earned, transactions on which commission income was earned and services rendered by the appellant for earning the above mentioned commission income. The Ld. A.O. conducted necessary inquiries by recording statement u/s.131 of the person for whom the services were rendered and various sale transactions on which commission was earned by the appellant. After conducting various inquiries u/s.131 the ld. A.O. also recorded statement on oath of various persons for whom the services were rendered by the appellant for earning the commission income. As mentioned in para 4.14. and 4.15 of the assessment order, the ld. A.O. appraised the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany had claimed depreciation of Rs. 38,05,073/- under the provisions of Company's Act. The appellant company had further claimed interest of Rs. 9,26,098/- incurred on car loan obtained from Kotak Mahindra. During assessment proceedings, the A.O. inquired about the use of car for the business alongwith necessary evidences like maintenance of log book and necessary evidences regarding its use of the business. The ld. A.O. conducted further necessary inquiries u/s.131 of the Act for ascertaining the use of the car for the business of the appellant company. Copy of various statement recorded in this connection were also handed over to the appellant company during assessment proceedings by the A.O. After conducting various inquiries, the ld. A.O. concluded that the appellant had never used the Rolls Royce car wholly and exclusively for the purpose of business of the appellant company. Therefore, the expenses on account of depreciation, interest and other expenditures. 6.3.2. Even during appellate proceedings no evidences were furnished by the appellant in support of its claim. Even the Ld. A.R. did not challenge the content of various investigations conducted by the A.O. In abse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es through the assessee-company. Contention of assessee was that commission was paid by M/s. Shree Chem Industries in respect of sales affected through assessee-company to various parties. However to find out genuiness of commission income shown by assessee, AO issued summons to payee of commission and to the parties to whom payee has sold goods. As per the statement recorded by the AO, all these parties admitted that they do not know that the assessee-company or any of its Directors or employees and that all the transactions which M/s. Shree Chem Industries are routed through one Shri Amit Gandhi. The AO also called Shri Amit Gandhi by issuing notice u/s.131. In response to Summons issued u/s.131 of the Act, Shri Amit Gandhi, resident of Mumbai, Partner of M/s. Shree Chem Industries, Bhiwandi, attended his office on 21.01.2014 where at his Statement on oath was recorded wherein he has admitted that commission was paid to the assessee company for A.Ys. 2011-12, 2012-13 and 2013-14 for no services rendered by them and that they were not involved in the introduction of the parties and further they have not participated in taking the purchase orders, taking of material supplied and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties, including Shri Amit Gandhi. Therefore, an adverse inference is hereby drawn that the commission income of Rs. 7,33,360/-, which is alleged to have been earned @5% on sales of M/s.Shree Chem Industries, is of non- genuine character and accordingly the said sum of Rs. 7,33,360/- is hereby treated and taxed under the head "Income from Other Sources'. 11. The detailed finding recorded by AO and CIT(A) has not been controverted by assessee, by bringing any positive material on record, accordingly, we do not find any reason to interfere in the order of the lower authorities treating the commission income as income from other sources. 12. With regard to assessee‟s claim of depreciation on the Rolls Royce Car amounting to Rs. 2.93 crores and Loan processing expenditure of Rs. 75,144 and interest expenditure of Rs. 9.26 lakhs on the loan obtained for the purpose of purchasing the said car from Kotak Mahendra Bank Ltd., we found that vide order sheet noting dated 14.11.2013, the AR of the assessee was asked to state as to how the said car has been used wholly and exclusively for the purpose of business and also to furnish the log book of the newly purchased car. On 27.11.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Limited, Statement of Shri Nayan G.Ashar was also recorded on oath on 04.02.2014 u/s.131 of the Act wherein he stated that meeting with Shri M.L.Tandon took place only at his office located in SEEPZ and nowhere else thus far and that one Mr.Datta, peon of the assessee company, used to come to broker‟s office to deliver the cheques or documents and that apart from the said person namely Mr.Datta, nobody comes to meet him in the broker‟s office to execute the trade for and on behalf of the assessee company and that the orders take place only on phone / mobile. He further stated in his Statement on oath that he has never met Shri M.L.Tandon, Director of the assessee company, outside his office at SEEPZ, Andheri and that too by prior appointment. 14. During the assessment proceedings, vide order sheet noting dated 10.02.2014, the AR of the assessee company was shown the statements of Shri Jayant R.Shah, Director of RRS Shares & Stock Brokers Private Limited and Shri Nayan G.Ashar, sub-broker of the said company; and he was pointed out that from the said Statements, it comes out very clear that the Director of the assessee company has never visited the broker / sub-brok ..... X X X X Extracts X X X X X X X X Extracts X X X X
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