Tribunal overturns disallowed expenses, citing complete information and verification by employees.

The Tribunal allowed the appeal, directing the deletion of disallowed commission and salary expenses. The Assessing Officer disallowed commission expense due to incomplete details, but the Tribunal found complete information provided. Similarly, the disallowance of salary expense was overturned as the Tribunal confirmed full details were submitted, and employees verified receipt. Consequently, both expenses were deleted as no adverse evidence was found, resulting in a favorable outcome for the assessee.

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Issues:
The issues involved in this case are the disallowance of commission expense and salary expense by the Assessing Officer, which were confirmed by the Commissioner of Income Tax (Appeals) (CIT(A)).

Commission Expense:
The Assessing Officer disallowed the commission expense of Rs. 8,18,150 as the assessee failed to furnish complete details of the persons to whom the commission was paid. The Assessing Officer issued notices under Section 133(6) to verify the genuineness of the commission, but some notices were returned unserved and replies were not received. The CIT(A) upheld this disallowance stating that the assessee did not provide a copy of the agreement with the persons to whom commission was paid. However, the Tribunal found that the assessee had furnished complete details, including names, addresses, and PAN numbers of the commission recipients. The Tribunal noted that the Assessing Officer did not doubt the payment to all parties and had only issued notices to two persons, both of whom responded and confirmed the receipt of commission. As no adverse evidence was found, the Tribunal directed the deletion of the disallowed commission expense.

Salary Expense:
The Assessing Officer also disallowed the salary expense of Rs. 5,16,000, stating that the assessee failed to provide complete details of the persons to whom the salary was paid. The Assessing Officer issued notices under Section 133(6) to verify the salary expenses, but some notices were returned unserved. The CIT(A) upheld this disallowance, allowing only Rs. 2.40 lakhs of the salary expenses. However, the Tribunal found that the assessee had furnished complete names, addresses, and PAN numbers of the employees receiving salary. The Tribunal noted that two employees had responded to the notices, confirming their employment and salary receipt. As no adverse evidence was presented, the Tribunal directed the deletion of the disallowed salary expense.

In conclusion, the Tribunal allowed the appeal of the assessee, directing the deletion of both the disallowed commission and salary expenses.

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