Disallowed commission to sub-brokers upheld for assessment year 1998-99. Lack of evidence and discrepancies noted.

The Income-tax Appellate Tribunal upheld the disallowance of the commission claimed as payable to sub-brokers by the appellant for the assessment year 1998-99. The Tribunal found lack of evidence of services rendered by sub-brokers, non-payment of commissions, and discrepancies in sub-brokers' financial records and income filings. The Tribunal concluded that no substantial legal questions arose, as lower authorities' findings remained consistent in denying the claim of commission payable to sub-brokers, leading to the dismissal of the appeal.

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Issues:
- Disallowance of commission claimed as payable to sub-brokers by the appellant for the assessment year 1998-99.

Analysis:
The appellant, a del credere selling agent of two companies, claimed a commission of Rs. 45,81,710 and brokerage of Rs. 19,93,474 payable to sub-brokers for sales of yarn in a specific territory. The Assessing Officer disallowed the claimed amount as commission/brokerage, citing lack of evidence of sales through sub-brokers and non-payment of brokerage to them. The appellant failed to produce sub-brokers' account books or evidence of sales through them. The Assessing Officer concluded that the claimed expenditure was not incurred as no services were rendered by sub-brokers, and no payments were made to them.

The Commissioner of Income-tax (Appeals) upheld the disallowance, noting the appellant's failure to prove the genuineness of payments to sub-brokers, irregularities in submitted affidavits, absence of authorization to engage sub-brokers in the sales agreement, and non-payment of commissions for years. The Commissioner concluded that sub-brokers did not render services, and no substantial commission due to them was paid, sustaining the disallowance.

The Income-tax Appellate Tribunal affirmed the disallowance, emphasizing the absence of services by sub-brokers, non-payment of commissions, and discrepancies in sub-brokers' credit balances and income filings. Referring to legal precedents, the Tribunal highlighted the need to judge evidence based on human probabilities, concluding that no services were rendered by sub-brokers. The Tribunal dismissed the appeal, stating that no substantial legal questions arose, as the findings of fact by lower authorities remained consistent in denying the claim of commission payable to sub-brokers.

In summary, the disallowance of the claimed commission payable to sub-brokers by the appellant for the assessment year 1998-99 was upheld by the Income-tax Appellate Tribunal, based on the lack of evidence of services rendered by sub-brokers, non-payment of commissions, and discrepancies in sub-brokers' financial records and income filings. The Tribunal concluded that no substantial legal questions arose, as the findings of fact remained consistent across lower authorities, leading to the dismissal of the appeal.

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