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TMI Blog2021 (11) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... w and facts in passing order on the basis of assumption and presumptions. 4. That order of ld. Lower authorities are against principles of natural justice. Appellant was not confronted with the material used against the appellant and was not given opportunity of rebuttal. 5. That further submission shall be made at the time of hearing. 6. That appellant craves leave to add amend or alter all or any grounds of appeal and relief before or at the time of hearing of the appeal." 2. The hearing of the appeal and C.O. were concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. The brief facts of the case are that the assessee is proprietor of firm M/s. Jamna Industries and derived income from manufacturing and selling Sprinkler and its spare parts. The assessee filed his return of income on 27/11/2014 declaring total income of Rs. 11,70,880/-. The case of the assessee was selected for scrutiny. Necessary notices were issued to him and finally, the assessment was completed U/s. 143 of the Income Tax Act, 1961 (in short, the Act) at a total income of Rs. 23,29,260/- by making additions on accounts of disallowance on commission and the tradin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale affected through their efforts & as per market usage & Practice. The sales commission is paid wholly & exclusively for business purpose to enhance sale is allowable expenditure as per provisions of Income Tax Act. That Commission paid to the persons are well known and experienced in the field of sprinkler and pipe business. The commission paid is allowable business expenditure U/s. 37(1) of Income Tax Act. (iii) We beg to submit that Family always signifies a group. Plurality of persons is an essential attribute of a family. A single person, male or female does not constitute a family. A family consisting of a single individual is a contradiction in terms. Section 2(31) of the Income Tax Act, 1961, treats a Hindu undivided family as an entity distinct and different from an individual. Assessment in the status of a Hindu undivided family can be made only when there are two or more members of the Hindu undivided family (Refer C. Krishna Prasad vs. CIT (1974) 97 ITR 493(SC) & also in ITAT Delhi Bench 'E' in case of ITO Ward 36(2) New Delhi Vs. Mittal Investment Co. (a copy of Judgment is submitted is submitted herewith for your kind perusal). Further we also beg to sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee had deducted TDS, payments were made through account payee cheques, given PAN number of the parties and confirmed the commission payment. The law does not require from the assessee to enter in agreement on stamp paper for claiming commission as held in the case of Chicago Pneumatic India Ltd. Vs. Dy. CIT (2007) 15 SOT 252 (Mum.). The books of account are audited which has been accepted by the Assessing Officer, sale and purchase have been treated genuine, but doubted the commission payment and the learned Assessing Officer made addition on surmises and conjectures." Therefore, we are of the considered view that commission paid by the assessee either on sale and purchase are allowable as the expenses incurred wholly and exclusively for the purpose of business U/s. 37 of the Act - as held in ITA No. 535/JP/2015. Order Dt. 30/10/2015. (vii) The Hon'ble ITAT AHMEDABAD BENCH '13' in case of Stallion Laboratories (P.) Ltd. v. Income-tax Officer [2017] 88 taxmann.com 880 (Ahmedabad - Trib.) held that "Excessive or unreasonable payments - Assessment year 2011-12-Where assessee had made impugned commission payments after deducting TDS and had placed on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further noticed that the assessee had paid sales commission @ 1.5 % to these persons on sale affected through their efforts and as per market usage & practice. The assessee had categorically stated that sales commission was paid wholly and exclusively for business purpose to enhance sale and thus the same can be categorized as allowable expenditure as per provisions of Section 37(1) of the Act. Apart from this, the ld. AR relied upon its detailed written submissions which have already been considered by us. 9. We have gone through the supportive documents in the shape of copy of ITR, copy of computation of total income of respected persons to whom commissions were paid and which also shows that the said persons have shown the income of commission in their respective returns and have paid due taxes. We are also aware of the fact that in normal business practice in the trade to engage persons/parties to market the product in villages to publish the quality and uses of product and for that sales person have to be engaged and payment of sales commission is a normal trade practice. We found support from the decision of the Hon'ble Delhi High Court in case of CIT v. Genesis Commet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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