Genuineness of commission payments and related expenditure may require remand where inquiry into services rendered is inadequate.

Inadequate inquiry into the genuineness of a commission payment, including the existence of any verbal arrangement, actual services rendered, and the recipient's capacity to earn the commission, justified remand for fresh examination. The related commission expenditure was also not treated as finally disallowed because some outlay may have been incurred in earning the commission and the matter required reconsideration on evidence. Both issues were sent back to the assessing authority for fresh adjudication after proper hearing, with the merits left open.

---

---

Issues: (i) whether the assessee's claim that part of the commission was paid to Shri Atul Mehra could be accepted without fuller inquiry into the genuineness of the payment and alleged services rendered; and (ii) whether the claim for commission-related s should stand or be re-examined.

Issue (i): whether the assessee's claim that part of the commission was paid to Shri Atul Mehra could be accepted without fuller inquiry into the genuineness of the payment and alleged services rendered.

Analysis: The material on record did not show that the necessary inquiries were made into the alleged verbal arrangement, the actual rendition of services, or the circumstances bearing on the recipient's suitability and capacity to earn the commission. The existing inquiry was found insufficient for a conclusive finding on the genuineness of the payment.

Conclusion: The issue was restored to the assessing authority for a fresh decision after proper inquiry.

Issue (ii): whether the claim for commission-related s should stand or be re-examined.

Analysis: The disallowance was not treated as final, since some expenditure could reasonably have been incurred in earning the commission and the matter required reconsideration on evidence.

Conclusion: The issue was also restored to the assessing authority for fresh adjudication.

Final Conclusion: Both matters were sent back for reconsideration with an opportunity of hearing to the assessee, and the decision on the merits was left open.

Ratio Decidendi: Where the inquiry into the genuineness of a commission payment or related expenditure is inadequate, the matter may be remanded for fresh adjudication after proper hearing and examination of the facts.

---