TMI Blog2021 (11) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... delete the addition made qua this issue. Trading addition - HELD THAT:- We noticed that the assessee's proprietorship firm M/s. Jamna Industries is manufacturing of Sprinkler System and its Spare Parts and the assessee has maintained complete books of account including stock register. All the sales, purchases and expenses are fully vouched and verifiable. There is no change in the method of accounting as compared to preceding years. The books of account are duly audited. All the books of account and record of the unit were produced before the A.O.. All the details of purchases were furnished before the lower authorities and maintained stock register, production record and finished stock register of the unit. The assessee also filed complete stock chart of Raw Material, Finished Goods showing opening stock, purchase, manufacturing, sales and closing stock alongwith audit balance sheet before the Revenue authorities. Since the A.O. checked the books of account and also checked the manufacturing records and no any defect was pointed out then in that eventuality, sustaining of addition on account of trading addition is no legs to stand, therefore, we direct to delete this add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O., the assessee carried the matter before the ld. CIT(A), who after considering the submissions as well as material placed on record, given part relief to the assessee by upholding the action taken by the A.O. with regard to disallowance on commission and had restricted the addition to ₹ 50,000/- made with regard to trading addition. 5. Against the said order passed by the ld. CIT(A), the assessee has preferred the present appeal before the ITAT on the grounds mentioned above. 6. Ground No. 1 raised by the assessee relates to challenging the order of the ld. CIT(A) in confirming the order of A.O. disallowing the payment of commission paid by the assessee to three persons. In this respect, the ld. AR while reiterating the same arguments as were raised by him before the lower authorities has relied upon the written submissions filed before the Bench and the contents of the same are reproduced below: 1. That firm have paid commission of ₹ 1058382/- to Following Persons:- S. No. Name of Person Amount (Rs.) Income Shown in their ITR TDS Deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndivided 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 submit that 1-IUF is a separate legal entity which can perform its business through its Karta and other members. As the services rendered by Sh. Surendra Gajraj in his individual capacity had been accepted, there was no reason for not accepting his services in his capacity as a Karta of the IMF, the payment of commission to both the specified persons as well as persons other than specified persons had been made on the same basis and the same percentage IDS had been deducted on the commission payments in terms of section 194H. That we have already submitted Copy of ITR Copy of Computation of Total Income of Shri Vikram Singh Kulhari, Shri Rameshwar Singh M/s. Surendra Gajraj HUF told AO. It would be observed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 confirmations of payers by way of contra accounts, such payments could not be held to be excessive payments We therefore request your honour to kindly accept the ground delete the Additions of ₹ 1058382.00. 7. On the other hand, the ld. DR has vehemently supported the orders of the lower authorities. 8. We have considered the rival contentions and carefully perused the material placed on record. From perusal of record, we noticed that the assessee is engaged in manufacturing of Sprinkler and spare parts in its factory located at Jaipur under the name and style M/s. Jamuna Industries as registered with ISI and the assessee is manufacturing ISI products of high quality and weight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 P. Ltd. (2007) 197 Taxation 248/163 Taxman 482 (Delhi)(High Court) wherein it was held that the Assessing Officer disallowed commission paid by the assessee to agents on the ground that the assessee was not able to produce parties to whom commission was paid. Even though the copies of accounts at the parties and the particulars of services rendered were produced before the Assessing Officer the Tribunal allowed the claim. On appeal at the instance of revenue the High Court confirming the findings of the Tribunal held that the commission paid was allowable as business expenditure as the assessee had produced all the material that it could possibly produce. If the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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