TaxTMI 
TaxTMI 
2013 (8) TMI 326
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....7,238/- as capital expenditure." 3. Aggrieved the assessee carried the matter in appeal. The first appellate authority deleted both the additions made by the AO for the reasons given in his order. 4. Aggrieved, the revenue is before us on the following grounds: 1. That the Ld. CIT (A) has erred in law and on facts and circumstances of the case by deleting the addition on account of commission paid to M/s K.P. Steels, Ltd. inspite of the facts that such payments made to procure contract through illegal means are clearly contrary to the explanation to the section 37(1) of the I.T. Act, 1961, and are liable to be added to the income of the assessee. 2. That the Ld. CIT (A) has erred in law and on facts and circumstances of the case by deleting the addition of expenses on account of ISO expenses inspite of the fact that such expenditure was capital in nature as the assessee will have enduring benefit in all the coming years, though their may be various conditions attached to this ISO certificate like cancellation of certificate on breach of terms and conditions, nil surrender value and also their was no new assets generated to the assessee." 5. We have heard Ms. Jyoti Le....
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.... it was not the case of business expenditure but was one of business loss and that cases cannot be decided on one's own moral views. He filed a paper book running into 176 pages while consist of 15 case laws and relied on the same. 12. On ground no. 2, he relied on the order of the ld. CIT (A). 13. Rival contentions heard. On a careful consideration of the facts and circumstances of the case and a perusal of the papers on record, we hold as follows: 14. The ld. CIT (A) has on Para 3.3. & 3.4 recorded as follows: "3.3 I have gone through the order of the AO and the submissions of the AR very carefully. According to the appellant, M/s Pharma Ventures approached the appellant company in helping M/s Pharma Ventures in getting the contract from the Ministry of Health. M/s Pharma Ventures vide its letter dated 12.08.01 appointed M/s Tehri Steels Ltd. the appellant as the authorized liasioning agent to pursue its case in the tender of supplying of cotton bandages floated by Ministry of Health & Family Welfare through Hindustan Latex Ltd with following terms and conditions:- 1. You shall purchase the above tender documents in our name. 2. Assisting in prep....
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.... ii) It was a genuine arrangement wherein entire services have been carried out by M/s K.P. Steels but M/s Tehri Steels Ltd. has been used as a conduit to share the commission. iii) The entire arrangement is was eyewash so as to show commission as adjustment entry to help M/s Pharma Ventures. In the first situation, the department has no case. In the second situation, the entire commission income should have been added in the hands of M/s K.P. Steels and assessment in the case of M/s Tehri Steels Ltd. should have made treating the commission shown by the appellant on protective basis. In the third situation, the detailed investigation was necessary to bring material on record which could show that this was merely an arrangement to suppress the profits of M/s Pharma Ventures and in turn to reduce the tax liability of M/s Pharma Ventures. Here also the right course would have been to disallow the commission expenditure in the case of M/s Pharma Ventures and assess the income declared by M/s Tehri Steels Ltd. and M/s K.P. Steels on protective basis. Thus, in either case M/s Tehri Steels Ltd, the appellant cannot be assessed on commission income more than what has been decl....
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....c policy, as construed by the AO. No evidence has been placed by the Revenue before the CIT (A) or before the Bench establishing any violation of public policy or provisions of any statute. It is well-settled legal proposition that Revenue cannot decide on an issue without proper facts supporting its decision. A decision based on the foundation of mere assertion or surmises or suspicion is liable to be quashed by higher Court. The decision must be supported by concrete facts and cogent evidences. This is a fundamental rule of justice. Thus, in the fact-situation of the instant case, the Revenue has failed to justify invocation of the said Explanation and consequent addition, as the parties to whom commission was paid, mode of payment through account payee cheques, quantum of commission, for the purpose of business and for the services rendered by the parties, remained undisputed." 16.1 The Delhi 'G' Bench of the Tribunal in the case of ACIT Vs. Sanjay Enterprises at Para 5 held as follows: We have considered the facts of the case and rival submissions. The limited question before us is whether the impugned payments were deductible expenditure under s. 37(1), particula....