TaxTMI 
TaxTMI 
2016 (3) TMI 678
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.... 4. The AO made disallowance by making reference to similar disallowance in AY 2006-07. The observations of the AO in paragraph 8 are extracted here under: "8. The facts of the current year case is no way different from that of A.Y. 2006-07 except that the assessee has made available a copy of agreement but he has completely failed to prove as to what was the actual effort made by Mrs. Rakhi Arora in affecting the sale. A number of opportunities were given to assessee to produce the recipient so that the same can be examined. However, those were not availed off for the reasons best known to assessee. In view of the above, it is crystal clear that the payment made by the assessee is in fact a sham transaction and does not call for allowance u/s. 37(1) of the Income Tax Act, 1961. Accordingly, the amount of Rs. 1,04,08,243/- is being disallowed u/s. 37(1) of the Income Tax Act, 1961 and shall be added in the income of assessee. " 5. It was submitted by the Ld. AR that the issue of disallowance of commission paid to Mrs. Rakhi Arora for Assessment Year 2006-07 came up before 'F' Bench of ITAT, Delhi and the matter was restored to Assessing Officer by the Bench vide orde....
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....CIT (A) after detailed consideration of facts and order of ITAT (for AY 2006-07) accepted the claim of commission vide paragraph 5.2 of the appellate order dated 29.02.2012. Findings of Ld. CIT (A) are extracted as below: "5.2 It may be seen from the assessment order, that the disallowance of claim of commission has been made principally on the grounds that evidence of services rendered was not provided, and that Smt. Arora was not produced for examination. Reliance was also placed on the assessment order for the A.Y. 2006-07, and the CIT (A)'s order of that year. However, the assessment for that year has been set aside by the Hon'ble ITAT, with specific Directions for verification of such evidences as Affidavit and copy of passport of Smt. Rakhi Arora, copies of purchase orders, debit notes, payments of commission, payments received from M/s WFI, email communications between the parties, and copies of invoices. All these relevant evidences have been produced and verified for the year presently under appeal. There can be no doubt that the documents have direct bearing to the issue under adjudication. A plethora of evidences have been produced to prove the identity of the U....
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....y the Ld. CIT(A) in para nos. 4 to 5.2 of his order which are being reproduced below for ready reference:- "4. I have carefully considered the written submissions made on behalf of the appellant and perused the assessment order. I have also carefully gone through the order of the CIT (A) and of the ITAT for the Assessment Year 2006-07. The CIT(A)XXIII, vide order dated 16.11.2009, had confirmed the order of the Assessing Officer disallowing the claim of commission payment of Rs. 26,42,636/- made to Smt. Rakhi Arora. The CIT (A)'s finding is based on the facts that the appellant did not produce evidence of services rendered in the form of correspondence, and even the existence and identity of the agent was not proved. The Hon'ble ITAT, Delhi, vide order dated 25.10.2011, has set aside the order of the CIT(A) restoring the issue to the file of the Assessing Officer for fresh adjudication. The extract of the ITAT's order is reproduced in the appellant's submissions above. The ITAT has directed that the Assessing Officer should verify the invoices issued by the assessee to M/s Waukesha Foundry Inc., USA (hereafter referred to as WFI), details of payment receive....
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....101861- You are short 16 pcs in Sept. When will they ship? Will we get in Oct? 034001110S- You are short 15 pcs in Sept. When will they ship? Will we get in Oct?. 122054- None scheduled for Oct. When will they ship? Will we get in Oct? 122056- You are short 30 pcs in Oct. When will they ship? Will we get in Oct? How will you catch up on the negative qty? 122058- You are short 40 pcs in Sept. When will they ship? Will we get in Oct? Thanks Rakhi Arora." (5.1) The agreement signed by the appellant with Smt Arora, being 'appointment of canvasser for promoting sales of castings and machine parts to WFI, USA' dated 12.3.2007 for the period 1.4.2007 to 31.3.2008 is on record. The main terms and conditions for payment of commission @ 12.5% are stated in detail in the agreement. The appellant has also furnished the copy of account of commission in the books showing the amount payable, and the copy of the bank account showing the payments made between 16.4.2008 and 3.12.2008. The appellant has also furnished the confirmation of M/s WFI, USA affirming that the orders were placed on M/s Vortex Systems through Smt. Rakhi Arora. The ....