Commission expenditure disallowance set aside where additional evidence required fresh examination of service genuineness

ITAT Hyderabad held that a disallowance of commission expenditure could not be sustained without examining the assessee's additional evidence and sworn affidavit supporting payment for services connected with a property transaction. As the new material went to the genuineness and reasonableness of the claim, the matter required fresh verification rather than final rejection. The disallowance was set aside and the issue was restored to the assessing officer for fresh adjudication after giving the assessee a reasonable opportunity and examining the concerned person on the nature of services rendered.

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Issues: Whether the disallowance of commission expenditure could be sustained without considering the additional evidence filed by the assessee, and whether the matter required fresh examination by the assessing officer.

Analysis: The assessee had produced additional evidence along with a sworn affidavit to support the claim that commission had been paid for services rendered in connection with the property transaction. The earlier order had rejected the commission claim, but the additional evidence had not been examined. Since the additional material had a direct bearing on the genuineness and reasonableness of the claim, the matter could not be finally concluded without giving it due consideration. The proper course was to set aside the orders on this issue and remit the matter for fresh decision after affording reasonable opportunity to the assessee and examining the concerned person regarding the nature of services rendered.

Conclusion: The disallowance of commission was set aside and the issue was restored to the assessing officer for fresh adjudication. The assessee succeeded to that extent and the ground was allowed for statistical purposes.

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