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TMI Blog2018 (3) TMI 2051X X X X Extracts X X X X X X X X Extracts X X X X ..... c. 37(1) is met. 2. The Hon'ble Appellate Commissioner is not justified to make 10% disallowance of expenses claimed in P & L account in the head of telephone expenses and tour & travels or vehicle maintenance, Depreciation being of personal nature. 3. The Hon'ble Appellate Commissioner is not justified to uphold 10% disallowance made by Assessing Officer of depreciation in relation expenses being of the personal nature." 3. The brief facts of the case in respect of ground no.1 are as per order of AO reproduced hereinbelow: "During the year under consideration, the assessee has debited commission expenses of Rs.18,22,663/- in the P & L A/c vide questionnaire dated 30.07.2013 the assessee was asked to furnish the details of commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusions can be drawn: 1. The assessee in a planed manner has selected few families for paying commission wherein all the members of the family have not actually tendered any services to the assessee. 2. The statements recorded reflect that the commission receivers don't have much knowledge of the services rendered and payments being made to them. 3. The statements recorded also reflect that most of the commission receivers could not recollect name of the customers sent by them to the assessee. 4. The commission receivers could not even reproduce the year/years for which they have received commission. 5. In most cases, they did not even know the name of the assessee. 6. In some cases, the commission receiver had not even vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted through banking channels. Here, the assessee fails to prove the genuineness of payment. The case of Lachminarayan Madan Lal v CIT [1972] 86 ITR 439 (SC) is also quoted, wherein it was held that ITO can examine whether commission is properly deductible, even if it is paid under agreement. The mere existence of an agreement between the assessee and its selling agents or payment of certain amounts as commission, does not bind the ITO to hold that the payment was made exclusively and holly for the purpose of the assessee's business. It is still open to the ITO to consider the relevant facts and determine for himself whether the commission said to have been paid to the selling agents or any part thereof is properly deductible under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed to have rendered services to the assessee for which they have earned the commission. If some parties have not been produced by the assessee, the assessee cannot be paralized for the same. It is the duty of the AO to summon such parties u/s 131 of the Act, which power vest with the AO and not with the party. In such circumstances and facts of the case, no addition or any enhancement can be made by the AO or the ld. CIT(A) and additions and enhancements so made are directed to be deleted. Thus ground no.1 of the assessee is allowed. 6. As regards ground no.2 and 3 the brief facts of the case are that the assessee had made most of the payments in cash for which no evidence has been placed on record and no record for incurring the expense ..... X X X X Extracts X X X X X X X X Extracts X X X X
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