TaxTMI 
TaxTMI 
2014 (1) TMI 884
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....ition of Rs.2,99,687/- on account of disallowance of commission paid. 2. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the addition of Rs.7,65,932/- made on account of disallowance of 30% of remuneration paid to directors. 3. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing." 2. The brief facts of the case are that the assessee company is engaged in trading of computer software and providing technical support to various clients in the field of software. Return of income was filed at a total income of Rs.50,89,170/-. The case was selected for scrutiny. During assessment proceeding....
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....on because of no proof of rendering of services was placed before Assessing Officer and the disallowance was made u/s 40A(2b) of the Act. 5. Dissatisfied with the order, the assessee filed appeal before CIT (A). The Ld. CIT (A) after going through the submissions deleted the additions made by Assessing Officer by holding as under: "4.2 Against the disallowance made, the Ld. Counsel stated that in the A. Y.2007-08, Commission of Rs.299687 was paid to various persons against sales of Rs.215544827 which works out of only 0.13% of the sales. The Ld. Counsel stated that in the preceding year i.e A. Y. 2006-07 against the sales of Rs.197072072, the commission payment of Rs.76,000 was fully allowed. The entire commission was pai....
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....that the payment is excessive. In the case of ACIT vs. Bony Polymers Pvt. Ltd. Appeal No.ITA No.867/Del/@008 (ITAT-Delhi-2009) on a similar issue of disallowance of commission to Directors, the Hon'ble Tribunal allowed the claim of commission payment on the ground that there was no avoidance of tax involved, as the Directors had paid tax on the commission receipts. The judgment is found to be applicable in the case of the appellant. In view of the above, it is held that no case has been made for disallowance of Rs.765932 u/s 40A (2). The disallowance made is accordingly deleted." 6. Aggrieved, the Revenue is in appeal before us. At the outset, the Ld. Departmental Representative argued that assessee was not able to explain the nature ....
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....is order at page 2 has held that assessee had filed confirmation letters from six persons in which they had stated and confirmed that they had received commission on purchase orders. The Assessing Officer on the other hand, do not mention about these facts and there is no copies of such letters in the appeal papers. In view of conflicting statements by Assessing Officer and CIT (A), we are of the view that the matter may be looked again by Assessing Officer. Therefore, we remit this ground to the office of Assessing Officer for readjudication. 11. As regards, second ground of appeal, we find that Assessing Officer made disallowance of 30% of remuneration paid to directors as excessive remuneration and in the absence of services proof of ....