Genuineness of commission expenditure upheld where books, cheque payments, TDS compliance and recipient details supported the transaction.

Commission expenditure could not be disallowed merely because notices to the recipients went unanswered or were not served at the stated addresses. The assessee's regularly maintained books of account, payment by cheque, deduction and deposit of tax at source, and disclosure of recipient particulars provided corroborative evidence of the transactions. On those facts, the expenditure was treated as genuine and the Revenue's challenge failed.

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Issues: Whether the Revenue was justified in disallowing commission expenditure on the ground that the recipients did not respond to notices or were not found at the addresses furnished, despite the assessee maintaining books of account, making payments by cheque, and deducting and depositing tax at source.

Analysis: The absence of replies to notices or non-service of notices by itself did not establish that the commission agents were nonexistent or that the payments were fictitious. Books of account maintained in the ordinary course of business have evidentiary value and cannot be ignored without cogent reasons. The record showed payment by cheque, deduction of tax at source, deposit of the deducted tax, and furnishing of the recipients' particulars. Those circumstances were sufficient to support the genuineness of the expenditure, and the cited authority on mere cheque payment not being conclusive did not assist the Revenue because additional supporting evidence was present.

Conclusion: The disallowance was not justified and the commission expenditure was rightly accepted; the Revenue's appeal failed.

Ratio Decidendi: Genuineness of an expenditure cannot be rejected merely because notices to recipients remain unanswered or unserved when the assessee's books of account, cheque payments, tax deduction at source, deposit of deducted tax, and disclosed recipient particulars provide corroborative evidence of the transaction.

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