Disallowance of Commission Expenditure

[RAVI SONI]

M/A XYZ & Co. is a seller and M/S DEF & Co. is a purchaser and Mr. A is acting as a middleman / commission agent on behalf of M/S XYZ & Co. ,during scrutiny proceedings the A O disallowed expenditure on commission on the basis that the purchaser party deny to recognize any middleman / commission agent during the course of transaction of purchase of goods from M/S XYZ & Co.

However when notices was send to Mr. A he confirmed to A O that he acted as a commission agent, still the A O disallowed all the commission expenditure just because M/S DEF & Co. i. e. the purchaser party issued a negative reply that no commission agent was involved.

In this regard I want to know that on what basis I can get relief from CIT Appeal.

AI Summary

Commission Agent Role Disputed: XYZ & Co. Seeks Relief After Tax Disallowance of Mr. A's Commission in Deal with DEF & Co. M/A XYZ & Co., a seller, engaged Mr. A as a commission agent in a transaction with M/S DEF & Co., a purchaser. During tax scrutiny, the Assessing Officer (AO) disallowed the commission expenditure because M/S DEF & Co. denied the involvement of any commission agent. Despite Mr. A confirming his role, the AO maintained the disallowance. The query seeks advice on obtaining relief from the CIT Appeal. One response suggests submitting the AO's order for further advice, while another recommends providing evidence that Mr. A declared the commission as income in his tax return.