TMI Blog2018 (4) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Authorities below in this regard. Therefore, in our view, the Assessing Officer did not apply his mind to make out the applicability of provisions of section 40A(ia) of the Act properly. - Decided in favour of assessee. - ITA No.1838/PUN/2016 - - - Dated:- 26-3-2018 - MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO, AM For The Appellant : Shri M.K Kulkarni For The Respondent : Shri Anil Kumar Chaware ORDER PER D. KARUNAKARA RAO, AM This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-9, Pune dated 23.06.2016 for assessment year 2001-02. 2. The assessee has raised following grounds of appeal: 1. On the facts and circumstances of the case and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of manufacturing of Plastic/Automobile Components and filed return of income on 31.10.2001 declaring total income at ₹ 4,82,175/-. The Assessing Officer made various additions on the following counts and determined total income of assessee at ₹ 11,07,454/- : Add : As discussed above 1. On account of Commission 6,00,806/- 2. On account of personal expenses 8,842/- 3. On account of excess electricity 2,128/- 4. On account of ad-hoc addition 5,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmission shown to them by the appellant. Considering the facts gathered by the AO during the course of assessment proceedings, he had concluded in para 11 of the assessment order that both Shri Dheeraj and Shri Neeraj Lasaria could not produce any evidence to justify the commission payment to them. Dheeraj Lasaria had not filed any return of income for A.Y.2001-02. He only filed it after the inquires were started in the present case and the return was beyond the limitation time and was invalid return. Thus, the considering the facts of the case the AO concluded that the appellant has failed to justify the commission payment to his sons and accordingly he disallowed the same. Further, during the course of appellate proceedings the AR of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable. The assessee explained that the commission paid to his two sons @ 3% on total turnover of ₹ 1.08 crores on account of one single contract of supplying gunny bags and services rendered by Shri Dheeraj Lasaria and Neeraj Lasaria. The Commissioner of Income Tax(Appeals) considered the said submission of the assessee and dismissed the appeal as per discussion given in Para-5.3 of the order of Commissioner of Income Tax (Appeals). The assessee s failure to make TDS on the said payments and the applicability of provisions of section 40A(ia) of the Act are some of the reasons given by Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) held that Shri Dheeraj Lasaria and Neeraj Lasaria did not file the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income of the payees at the commission. Thus, according to Ld. AR when the AO failed to make out a case of excessiveness or unreasonability of the commission payments to the payees based on the data gathered from open market, the provision of section 40A(2)(b) of the Act cannot be applied successfully and valid. In this case, the AO did not undertake any investigation or collected any comparables cases before disallowing the claim of the assessee. Therefore, the Ld. AR submitted for deleting the addition on this account. 8. Ld. DR for the Revenue heavily placed reliance on the order of Assessing Officer and the Commissioner of Income Tax (Appeals). 9. On hearing both the parties, we find that there is no dispute that payments of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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