Tribunal upholds deletion of disallowed commission claim, citing new evidence

The Tribunal upheld the ld. CIT(A)'s decision to delete the addition of &8377;1,39,50,088 on account of disallowance of a claim of commission paid. The AO initially disallowed the sum due to lack of substantiation, but after the assessee provided additional evidence during the appeal, including certificates and affidavits, the AO acknowledged the genuineness of the payments. As the AO accepted the genuineness during the remand proceedings, the ld. CIT(A) was deemed justified in deleting the addition. Consequently, the department's appeal was dismissed.

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Issues:
Deletion of addition on account of disallowance of claim of commission paid.

Analysis:
The department appealed against the deletion of an addition of &8377; 1,39,50,088 made on account of disallowance of a claim of commission paid. The AO disallowed the sum as the assessee failed to substantiate the identity of the recipients, the genuineness of transactions, and the reasonableness of high commission percentages. The assessee claimed the commission was paid to taxi drivers or bus drivers bringing customers to the shop. The AO doubted the explanation and disallowed the claimed amount.

The assessee provided additional evidence during the appeal, including certificates and letters supporting the commission payments to drivers and guides. Affidavits from drivers and guides were also submitted, along with explanations for not providing these documents earlier. The AO, in a remand report, acknowledged the genuineness of the payments based on spot inquiries and documents submitted. The ld. CIT(A) accepted the additional evidence and deleted the addition.

During the appeal, the ld. DR supported the AO's order, while the assessee's counsel argued that the additional evidence supported the claim. The Tribunal noted that the AO accepted the genuineness of the payments in the remand report after spot inquiries. As the AO was satisfied with the claim during the remand proceedings, the ld. CIT(A) was justified in deleting the addition. Consequently, the department's appeal was dismissed.

In conclusion, the Tribunal upheld the ld. CIT(A)'s decision to delete the addition, emphasizing the AO's acceptance of the genuineness of the commission payments based on additional evidence and spot inquiries.

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