TaxTMI 
TaxTMI 
2014 (1) TMI 1694
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....9.12.2012 partly allowed the appeal of the Assessee. Aggrieved by the order of CIT(A), Assessee and Revenue are in appeal before us. The grounds raised by the Revenue reads as under:- 1. The ld. CIT(A) has erred in law and on facts in deleting addition made by the A.O. of Rs. 2,24,78,303/- without any justifiable basis and without appreciating the fact that the G.P. in current year was 4.56% as compared to 14.48% in the immediately preceding year. 2. On the facts and in the circumstances of the case, the ld. CIT(A) ought to have upheld the order of the Assessing Officer. 4. The grounds raised by the Assessee reads as under:- 1.1 The order passed u/s. 250 on 19.12.2012 for A.Y. 2009-10 by CIT(A)-VIII, Ahmedabad upholding the disallowance of commission exp. Of Rs. 11,86,246 made by A.O. is wholly illegal, unlawful and against the principles of natural justice. 1.2 The ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced by the appellant with regard to the impugned disallowance. 2.1 The ld. CIT(A) has grievously erred in law and on facts in confirming the disallowance of commission exp. Of Rs. 11,....
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....ences as regards the fall in the international prices of the main raw material roasted Moly during the second half of F.Y. 2008-09 which has impacted the overall GP for the year under appeal. it is also seen that the A.O. has not pointed out any specific discrepancies in the books of accounts and also has not made any case for rejecting the books of accounts and has also not rejected for the books of accounts under section 145(3) of the I.T. Act before estimating the Gross Profit of the appellant. The Gross Profit for the appellant company estimated by the A.O. is arbitrary and not based on any sound finding. In view of the above discussion, the finding of the A.O. cannot be sustained. The A.O. is directed to delete the above. The ground of the appellant is allowed. 6. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 7. Before us, the Ld.D.R. took us through the findings of AO and submitted that the fall in GP has not been fully justified by the Assessee. He further submitted that CIT(A) has accepted the submissions of the Assessee without any supporting evidence. He thus supported the order of AO. Ld A.R. on the other hand submitted that the books of ....
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....ove mentioned decisions and further since the books of accounts have not been rejected u/s 145(3), no defect being pointed out in the books of accounts, we are of the view that the AO was not right in making addition on account of Gross profit and therefore find no reason to interfere with the order of CIT(A). Thus this ground of the Revenue is dismissed. 11. In the result, the appeal of the Revenue is dismissed. Now we take up Assessee's appeal. The only ground is with respect to disallowance of commission expenses. 12. On going through the details of commission expenses claimed by the Assessee, AO noticed that Assessee had paid aggregate commission of Rs. 11,86,246/- comprising of payments to Smt. Laxmi Devi Rs. 4,24,712/-, Ms Maya Chaudhary Rs. 5,41,534/- and to Smt Rajani Chaudhari Rs. 2,20,000/-. Assessee was asked to produce the evidence and justification for the payment. In response, Assessee interalia submitted that the named persons were service agents and the commission was made at various rates on the sales made. The submissions of the Assessee was not found acceptable to the AO for the reason that Assessee had not entered into any agreement with them. He also notice....
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....the payments were made to the three ladies of the same address at 41, Eiphel Tower, 22, Contractor Area, Jamshedpur and Jharkhand. The appellant has submitted that they have been paid for the sale effected in the far off area of Raipur, Bhilai and Orissa. The appellant could not produce any written agreement with them for the so called sales effected through them. The appellant has not produced the details as to what was the role of the ladies and how they have achieved this from sitting at Jharkhand to sell off the Moly in areas of Raipur, Bhilai and Orissa. it is not convincing and acceptable that all the three ladies from the same place have expertise in selling the Moly of the appellant who is based in Ahmedabad. The appellant has also not submitted that how he has employed the services of the above ladies. The arguments of the appellant that on the commission income, the all the three ladies have paid the income tax is not material to the fact of the case as by this the nature of the commission which is not genuine is not going to change. It appears that the services have not been rendered by the ladies as claimed by the appellant. In view of the all the above facts and circum....