TaxTMI 
TaxTMI 
2014 (5) TMI 108
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.... iii) Difference in the claim of commission paid of Rs.1,435/-. 3. With respect to addition made under section 68 of the I.T. Act, 1961, the department had come up on appeal before us in ITA.No.944/Hyd/2010. The CIT(A) held as follows : 7.3. After examining carefully the details filed by the appellant as well as all the facts of the case, I find that although both Sri G. Satya Divya and Sri C. Suresh Kumar have signed the confirmation letters written by the appellant, the third creditor in question, Sri A Sainath Reddy has not signed the confirmation. Moreover, it is clear from the remand report that with regard to Sri Sainath Reddy, there is very little ITA.No.944/H/2010 & C.O.51/Hyd/2010 M/s. Prayag Enterprises Pvt. Ltd. Hyderabad. cash available for lending. In other words, the creditor does not have the proven capacity to lend the amount. However, with regard to the other two creditors, the Assessing Officer has confirmed not only the identity but also the capacity and genuineness of transaction by verification of their cash flow statement. If the lenders have not declared interest received in their returns of income, the Assessing Officer....
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....come and confirmed the advance of Rs.2,00,000/- to the appellant, the appellant discharged its duty of establishing the genuineness of the credit and the burden of disproving the same shifted to the A.O. and he failed to discharge the burden. Therefore, the addition made U/s 68 deserves to be deleted. 5. It is observed that during the proceedings before the CIT(A) a remand report of the A.O. had been called for. The assessee had filed confirmation from the three persons viz., G. Satya Divya, C. Suresh Kumar and A. Sai Nath Reddy. The assessee had also filed copies of I.T. Returns computation of total income, and cash flow statement / bank statement in the case of the above three persons. After examining the details filed by the assessee, the CIT(A) has observed that with respect to G. Satya Divya, C. Suresh Kumar that the A.O. has confirmed the identity and capacity and genuineness of the transaction by verification and their cash flow statements. Further, the two lenders have declared interest received in the return of income and hence, the three parameters i.e., identity, capacity to lend and genuineness of the transaction have been fulfilled. Hence, following the decision of R.....
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....pplier company. 2.6 With regard to the expenditure of Rs.16,56,192/- incurred by M/s Mahalakshmi Liquor Promoters Pvt. Ltd. in purchasing branded T shirts for distribution amount retailers, there was no agreement between the assessee and M/s Mahalakshmi Liquor Promoters Pvt. Ltd for bearing the expenditure on its behalf. The assessee will pay commission to M/s Mahalakshmi Liquor Promoters Pvt. Ltd. on the sales made through it and it is not responsible for the expenses incurred by M/s Mahalakshmi Liquor Promoters Pvt. Ltd. in earning such commission. Return of income filed by M/s Mahalakshmi Liquors Promoters Pvt. Ltd. for the Asst. Year 2006-07 was verified and it was noticed that the Company is claiming Rs.12,94,831/- as an expenditure towards sales promotion, which means that the expenditure incurred by it towards sales promotion was being claimed by it as expenditure for earning the commission income. 2.7 In this case, it is pertinent to note that the assessee on one hand is claiming that it has to bear a part of the expenditure incurred by the supplier towards business promotion and on the other hand, claiming that it has to bear the exp....
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....early states that the appellant cannot commit itself to any acceptance of discount or of any other matter without the prior written consent from M/s Rhizome Distillery Pvt. Ltd. This clause is quoted below: "'PRAYAG' shall represent 'RHIZOME' in all the discussions with Andhra Pradesh Beverages Corporation Ltd., in connection with fixation of prices of the IML Products of UB Group of Companies, McDowell & Co. Ltd., Herbertsons Ltd. only, allowance of trade discounts and all other matters, relating to the sales and supplies of IML. However 'PRAYAG' shall not give any acceptance or commit itself on any decision with Andhra Pradesh Beverages Corporation Ltd., without prior written consent from 'RHIZOME'. " 5.7 From the above, it is very clear that discounts allowed have no co-relation whatsoever with the business of the appellant. Further, all the marking expenditure including the distribution of free materials is to be borne by M/s Rhizome. Only the distribution part is to be undertaken by the appellant, for which it receives commission. 5.8. Given the facts and circums....
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.... by its sub agent and doubted the genuineness of the agreement. The CIT(A) observed that M/s. Mahalakshmi Promoters Pvt. Ltd. were supposed to independently make purchase of promotion materials like branded T-shirts, the assessee is not liable to reimburse them for such promotion materials. The CIT(A) concluded that the addition of Rs.22,24,416/- made by the A.O. is to be confirmed. 15. Aggrieved, the assessee preferred C.O. before the Tribunal. The learned Counsel for the Assessee Shri S. Ravi argued that the assessee was compelled to get the service of market agents so as to increase the sales and facilitate the business trade/from services were more particularly liquor because if the stocks are not cleared by the retailers within the stipulated period, the A.P. Beverages Corporation Limited would charge demurrages for the period delayed. Besides this, the assessee would also have to suffer deterioration in the quality of liquor. He submitted that the marketing agents who carry out the trade schemes are also responsible for the disposal of incentives and gift articles. He also submitted that all payments in question are made through account payee cheques and wherever applicable ....