Commission expenditure backed by banking payments and TDS cannot be disallowed on mere non-production of recipients.

Commission expenditure cannot be disallowed merely because recipients were not personally produced, where payments were made through banking channels and TDS was deducted. The Tribunal noted that the Assessing Officer did not use section 131 summons powers to secure attendance, and held that non-disclosure by the recipients by itself did not render the assessee's claim bogus. It found the disallowance rested mainly on conjecture and human probability rather than cogent evidence, so the commission expense was allowed. Interest under sections 234A and 234B was treated as consequential and did not call for separate substantive relief.

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Issues: Whether disallowance of commission expenditure was justified on the ground that the recipients were not produced and the payment was treated as non-genuine, and whether interest under sections 234A and 234B was chargeable as a consequential matter.

Analysis: The addition was based on the absence of personal production of the commission recipients, alleged similarities in addresses, timing of payments in the closing month, and the view that banking channel payments and TDS deduction were insufficient to prove genuineness. The Tribunal noted that the Assessing Officer had not used summons powers to secure attendance under section 131, that the payments were admittedly made through banking channels with TDS deduction, and that non-disclosure by recipients did not by itself render the assessee's expenditure bogus. It further held that the disallowance rested largely on conjectures and human probability rather than cogent evidence, and that the consequential interest claim did not survive independently.

Conclusion: The disallowance of commission expenditure was deleted and the assessee succeeded on the substantive ground. The grounds relating to consequential and unsupported issues were rejected or treated as not requiring separate relief.

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