TaxTMI 
TaxTMI 
2014 (8) TMI 526
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.... 2.1 Briefly stated, during the year under consideration, the assessee had allegedly paid 25% commission amounting to Rs. 56,41,677/- on export sales of Rs. 2,25,42,652/-. According to the assessee, the said commission had been paid to M/s. Bombay Industries situated in U.S.A. in respect of export sales of commodities sent to Mexico. The assessee had claimed the payment of the said commission as business expenditure which was allowed by the AO in the assessment framed. However, the Ld.CIT(A), during the first appellate proceeding, had disallowed the expenditure on the reason that there is no written agreement evidencing the payment of 25% commission to Bombay Industries U.S.A. and the assessee had not deducted any TDS on the said payment....
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....he claim of the assessee, it is pertinent to mention that the Tribunal in the case of Harrison Garments Division Vs. JCIT, in ITA No. 3022/Mum/2012, which has been relied on by the Ld.AR, has held that mere existence of an agreement cannot decide the allowability of commission payment, it is the presence of surrounding circumstances and the basic facts that decide the issue in conclusive manner. Similarly non existence of written agreement cannot be sole base for disallowance of commission payment if other evidences prove the fact of incurring for such expenditure wholly and exclusively. For the said decision the Tribunal has relied on the decision of the Delhi High Court in the case of Gautam Creations Pvt. Ltd. 171 taxman 271 Delhi High C....
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....ircular No.786 dated 7.2.2000, the assessee is not required to deduct the tax at source under Section 195 with regard to payment of commission to foreign agent. It is also relevant to state that the CBDT, withdrawing the circular No.23 of 1969 and circular No.786 of 2000 will be operative only from 22nd October, 2009 and not prior to that date. Therefore, the reasoning of the Ld.CIT(A) for making the impugned disallowance, in our view, is not sustainable on facts and in law. In view of the aforementioned discussion, we delete the impugned disallowance made by the Ld.CIT(A). Since the disallowance made by the Ld.CIT(A) has been deleted on appreciation of merits in the claim of the assessee, the adjudication of the contention of the Ld.AR tha....
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....back in the books of account or had been settled. However, the said contention was not accepted by the Ld.CIT(A) and thereby the Ld.CIT(A) upheld the disallowance made by the AO. Aggrieved by the impugned decision, the assessee has raised this ground in the appeal before us. 3.2 Having heard both the sides and perused the material on record, it is pertinent to mention that the assessee, during the proceedings before us, has filed statement showing list of sundry creditors return back in M/s. India Fashion Ltd. in A.Y. 2006-07 and break up of assessee's creditor return back in that year. Since the document has never been asked for by the AO or the Ld.CIT(A), the Ld.AR has placed it as additional evidences before us to substantiate the cla....
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....the assessee was not able to prove that the items were given as freebies and held that the 790 pieces were actually sold and income of which had not been disclosed in the books of account. The AO adopted rate at which the said pieces were sold during the year and the undisclosed income in respect of above item was held to be Rs. 1,89,600/- (790x240). Accordingly, the AO added the impugned amount to the total income of the assessee. On appeal, the Ld.CIT(A) confirmed the said addition. Aggrieved by the impugned decision, the assessee has raised this ground in the appeal before us. 4.2 Having heard both the sides and perused the material on record, it is pertinent to mention that the assessee during the assessment proceeding has given the ....
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....ssessee, in response, submitted that it did not incur any expenses to earn the dividend income and hence no disallowance was warranted. Having not satisfied with the explanation of the assessee, the AO had worked out the common expenses debited to the P/L Account by the assessee at Rs. 62,05,928/- and proceeded to make a disallowance of Rs. 1,86,178/- holding that 3% of common expenses calculated at Rs. 62,05,928/- were attributable to the expenditure for earning exempt income. On appeal, the Ld.CIT(A) upheld the disallowance made by the AO. Aggrieved by the impugned decision, the assessee has raised this ground in the appeal before us. 5.2 Having heard both the sides and perused the material on record, it's a matter of fact that the ass....