TMI Blog2006 (9) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal was justified in erroneously rejecting the claim of commission paid by the appellant to M/s. Vashisht Industrial Products (P.) Ltd. on the basis of alleged contradiction in the statements of the two directors recorded by the Assessing Officer without even allowing the opportunity of cross-examination despite specific prayer for the same thus violating principles of natural justice? (c) Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was justified in reversing the orders of Commissioner of Income-tax (Appeals) and thereby confirming the disallowance of commission paid on erroneous findings of facts and law? (d) Whether, on the facts and circumstances of the case, the decision of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sharma stated that he only provided knowledge to the assessee-company for up gradation of their products and to improve their productivity and had taken the management of the assessee-company along with its products to various tractor manufacturing companies. He further claimed that his services were of comprehensive nature and not in general sense of liaison and so he was not required to shuttle from various manufacturers. In his statement he nowhere stated that he collected drawings for procuring orders, collected 'C' forms, sales tax declarations, collected payments from various companies, etc., as stated by Shri Amarjeet Dhal. 9.2 Second, Shri P.D. Sharma could not tell the rate of the commission or the basis of payment of commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration was the first assessment year of the assessee as the assessee-company was incorporated on April 24, 1996. The assessee has not denied these facts brought to the notice of the Bench by the learned Departmental Representative. However, the assessee tried to explain that in fact it had not stated before the Commissioner of Income-tax (Appeals) that this commission paid in the last 8 years pertained to the assessee-company but in fact pertained to its firm which was in existence prior to the incorporation of the assessee-company. However, the assessee has not been able to prove this fact from any of the submissions made before the Commissioner of Income-tax (Appeals) or by bringing on record any other evidence. On the contrary, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that in view of the material contradictions in the statements of these persons the nature of services rendered by M/s. Vashisht Industrial Products to the assessee through Shri P.D. Sharma also do not stand proved. 12. Lastly, from the other facts coupled with above mentioned contradictions, the genuineness of the transactions of payment of commission by the assessee, made wholly and exclusively for the purposes of the business of the assessee does not stand proved. Hence, we are of the opinion that, for the reasons stated above, the Commissioner of Income-tax (Appeals) erred in deleting the impugned addition, ignoring the material contradictions and the other deficiencies in the instant case of the assessee. Accordingly, the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sham Lal [1981] 127 ITR 816, holding that it was necessary to confront the assessee with the material relied upon against the assessee. We are unable to accept the submission made. Apart from the grounds adverted to by the learned counsel for the appellant, there are other grounds in support of the order of the Tribunal. The Tribunal, inter alia, held that other income of M/s. Vashisht Industrial Products (P.) Ltd. to whom commission of Rs. 23,20,982 was paid, was only Rs. 59,441 which created doubt about payment of commission. Further, absence of a written document containing terms of the agreement with a person to whom commission is being paid in lakhs, discrepancies in the statements of the assessee and Sh. P.D. Sharma and Brijesh Ku ..... X X X X Extracts X X X X X X X X Extracts X X X X
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