9911796707
TMI Blog2019 (6) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... arketing consultancy. He filed his return for the Assessment Year 2009-10 on 29.09.2009 declaring total income of Rs. 32,09,940/-. The assessee carried on a business under the name and style of 'GFF Aroma' and he received commission income in this business. Out of commission income received of Rs. 64,08,867/-, the assessee debited a sum of Rs. 38,00,000/- towards commission expenditure. The Assessing Officer examined this claim and came to the conclusion that the assessee could not prove the genuineness of the claim and identity of the commission agent. He further observed that the expenses were booked on the last day of the financial year 2008-09 by way of journal entries. He was of the view that the assessee had inflated expenses to evade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to achieve the targets, she entered into a MOU with one Mr. D.R. Shah and commission income received by the assessee was shared with him and that the commission was paid on various dates in accordance with this MOU. He pointed out that, in the bills, debit notes raised by the agency of Mr. D.R. Shah, specific reference was given to the bill numbers/order numbers of the sales of goods of the foreign parties and purchases made of these goods by the Indian customers. He submitted that the following evidences were filed before the A.O in support of the claim of genuineness of commission payment: (a) Copies of the MOU with Mr. D.R. Shah (b) Copy of PAN card of Mr. D.R. Shah (c) Copies of bills/debit notes raised by the parties mentioning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natively, he submitted that the amount should be allowed as a business loss u/s 28 or as business expenditure u/s 37(1) of the Act. He relied on a number of case laws in support of these contentions which we would be referred to as and when necessary. 7. The ld. Departmental Representative, on the other hand, vehemently controverted the submissions of the assessee and argued that the Revenue has made every effort to trace Mr. D.R. Shah at the address furnished by the assessee but it failed to do so. He pointed out that the notice issued u/s 133(6) at the address given by the assessee had been returned back and the assessee did not produce this Mr. D.R. Shah for examination before the Assessing Officer. He submitted that the assessee could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee confirming payments to Mr. D.R. Shah. 11. In each of the debit notes, the bills raised by Mr. D.R. Shah, the details as to Indian customers to whom the goods were sold is furnished. Hence revenue had the details as to who are the Indian customers that came due to Mr. Shah's services. All the payments were made by account payee cheques after following due process. The assessee has earned a commission income of Rs. 64,08,867/- for services rendered by her to the foreign parties. She had availed similar issues by entering into a MOU with Mr. D.R. Shah. The nature of services is mentioned in the MOU. In our view, the assessee has furnished sufficient evidence in support of its claim that commission has been paid to Mr. D.R. Shah for servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the assessee in any of the previous years. Thus, we hold that the amount was rightly disallowed u/s 36(1)(vii) of the Act. Be as it may, the assessee had written off this amount as recoverable. This amount was held as a current asset by the assessee and has been written off in books of accounts after a number of assessment years on the ground that the same had been irrecoverable. 13. The Hon'ble Delhi High Court in the case of Mohan Meakin Ltd. vs. CIT (2012) 348 ITR 109 (Delhi HC) held as follows: "The assessee advanced sums to a supplier in order to obtain regular supplies. As the supplier failed to deliver the goods or to refund the advance, the assessee claimed the loss as a bad debt u/s 36(1)(vii). The AO rejected the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
