Commission deduction denied for lack of agreement and proof of services rendered to support the payment.

Commission payment claimed as deduction was disallowed because the assessee produced no written agreement or supporting documentary evidence to show the basis of the payment or that the recipient rendered services. The first appellate allowance, based on the link to production and absence of extra-commercial considerations, was found insufficient on further appeal. In the absence of proof of service rendering and contractual basis, the expenditure could not be sustained as an allowable business deduction.

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Issues: Whether commission payment of Rs. 15,780 claimed to have been paid to Shri S.L. Lakhotia was an allowable deduction in the absence of an agreement or supporting documentary evidence showing that services were rendered.

Analysis: The claim for commission was accepted by the first appellate authority on the footing that the payment was linked to production and not shown to be for extra-commercial considerations. On further appeal, the absence of any written agreement or other documentary material indicating the basis of the commission, or establishing that Shri S.L. Lakhotia had rendered services to the assessee, was held to be fatal to the claim. In these circumstances, the allowance could not be sustained.

Conclusion: The commission expenditure was rightly disallowed, and the order allowing the deduction was reversed.

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