TMI Blog2020 (3) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... d turnover. The submissions as made by the assessee before the CIT(A) clearly shows that the turnover has increased on account of the assessee s own activity of getting the business from M/s. Elecon Engineering. It is not understandable as to why on the basis of the advice of M/s. Elecon Engineering, M/s. Divine Alloys and Power Company Limited had to be brought into the picture for the payment of referral commission . Nor has any evidence been brought to show what is the reference done by M/s. Divine Alloys and Power Company Limited and the quantum of turnover on account of such reference. The statement of the assessee before the learned CIT(A) itself shows that M/s. Divine Alloys and Power Company Limited has not done anything, nor pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... UDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER Appellant by: Mr. A. Sundararajan, Addl.CIT Respondent by: Mr. S. Sridhar, Advocate ORDER PER GEORGE MATHAN, JUDICIAL MEMBER: This is an appeal filed by the Revenue against the order of the learned Commissioner of Income Tax (Appeals)-8 Chennai in I.T.A. No.123/2014-15 dated 20.01.2016 for the Assessment Year 2012-13. 2. Mr. A. Sundararajan, Additional CIT represented on behalf of the Revenue and Mr. S. Sridhar represented on behalf of the Assessee. 3. It was submitted by the learned Departmental Representative that the only issue in the Revenue s appeal was against the action of the learned CIT(A) in deleting the disallowance made by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure. Consequently, the Assessing Officer has disallowed the said commission claimed to have been paid as the assessee had failed to prove that the expenditure was incurred wholly and exclusively for the purpose of the business of the assessee company. It was a submission that the learned CIT(A) had allowed the claim by holding that the assessee had discharged its primary onus as far as the payment of the commission was concerned. It was further a submission that other than saying that the assessee has got client referral from M/s. Divine Alloys and Power Company Limited, no other evidences has been produced. It was further a submission by the learned Departmental Representative that as the assessee had not proved the services rendere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the assessee showed that its profitability increased substantially as a result of the services. It was a submission that the payment of the commission was an allowable deduction. It was further a submission that the decision relied upon by the learned Departmental Representative had no applicability in so far as in both the decisions non-proving of the expenditure was beyond doubt. 6. We have considered the rival submissions and perused the materials available on record. 7. A perusal of the submissions made by the assessee before the learned CIT(A) shows that the assessee was initially in the business of after sales support for hydraulic systems that were imported into India by the user from various industries. The assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2013-14 it fell back to ₹ 19.00 crores. These above facts as submitted by the assessee before the learned CIT(A) clearly shows that the said M/s. Divine Alloys and Power Company Limited was contacted on the advice of M/s. Elecon Engineering, the person with whom the contract was entered into and this was not the act by the assessee for the purpose of getting the business of M/s. Elecon Engineering. This is not client referral by M/s. Divine Alloys and Power Company Limited but is the commission referral by M/s. Elecon Engineering. The assessee has been unable to produce any communication between M/s. Divine Alloys and Power Company Limited and the assessee, specifying the details of the transaction that the said M/s. Divine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys and Power Company Limited much less that it was wholly and exclusively for the purpose of the assessee s business. The assessee has not been able to place any agreement before any of the authorities below nor has it produced before us. The assessee states that the consolidated bill was produced by the assessee whereas M/s. Divine Alloys and Power Company Limited had produced five bills but even that has not been produced before the Tribunal nor it has been proved that the expenditure has been incurred wholly and exclusively for the purpose of business of the assessee. 10. In the present the facts clearly shows that the assessee has failed to substantiate much less proved the reason for the payment of the so-called referral commission ..... X X X X Extracts X X X X X X X X Extracts X X X X
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