TaxTMI 
TaxTMI 
2016 (3) TMI 1006
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....e Act') vide his order dated 26.12.2012 for assessment year 2010-11. 2. Facts of the case are that the assessee is a partnership firm and engaged in the business of trading and services. The Ld. CIT(A) found the order of AO is erroneous in so far it is as prejudicial to the interest of revenue on account of the following : 1. The ld. CIT observed the discrepancy between the financial statements submitted to the bank and submitted to the income tax office. The assessee declared the debtors in its balance-sheet submitted to the bank for an amount of Rs. 30,48,968.00 whereas the same amount of labour charges was not reflecting in its profit and loss account and balance sheet submitted to the income tax office. The ld. CIT also obse....
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....d. CIT observed that all the agreements for the commission payment have been made in the month of March 2009 only and that too on the letter head of the assessee. The language and wordings of all the agreements were same. All the six parties have raised the bills to the assessee in the month of March 2010 only. The AO has allowed the commission expenses without cross verifying the same from the Government of West Bengal as to whether there was the involvement of any middle person in relation to the award of the contract and settling the transaction for the same. There was also a need to establish whether the commission expenses have been incurred wholly and exclusively for the purpose of the business. 2.1 In response to the notice ....
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.... addition made by the AO on account of disallowance of commission expenses pertaining to prior period for an amount of Rs. 4,87,115.00. The issue of commission expense whether it was incurred wholly and exclusively for the purpose of the business was never before the ld. CIT(A). Accordingly, Ld. CIT held that order passed by AO is erroneous and prejudicial to the interest of revenue. 3. Now, being aggrieved by this order of Ld. CIT assessee came in appeal before us. Shri K.M.Ray, Ld. Authorized Representative appearing on behalf of assessee and Shri S.Srivastava, Ld Departmental Representative appearing on behalf of Revenue. 4. At the outset the ld. DR objected that the grounds raised by the assessee are not clear and they are non-....
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....of the AO gets merged with the order of ld. CIT(A) and in that event Ld. CIT cannot reopen the case u/s 263 of the Act. The ld. AR in support of his claim relied in the order of Hon'ble Gujrat High Court in the case of Bilag Industries Pvt. Ltd. Vs CIT, special Civil Application No. 24128 of 2005 where it was held that the order of the AO was merged with the order of the ld. CIT(A). Ld. AR relied on the order of AO. On the other hand the Ld. DR submitted that Ld. CIT(A) granted relief to assessee on a different footing on the ground of genuineness of expenses. There is no doubt about the payment made and about genuineness of the parties. However, AO has not verified whether the expenses were incurred wholly and exclusively for the purpose a....
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....ntial premises. Accordingly we are not inclined to interfere in the order of the ld. CIT. In view of this matter, this ground of appeal of the assessee is dismissed. 4.4 Regarding the issue of the commission expenses we find from the aforesaid discussion that commission expenses were claimed by assessee for an amount of Rs. 20,28,930/- but AO has not verified whether the commission was incurred wholly and exclusively for the purpose of the business. The assessee failed to produce the necessary details for the actual services provided by the parties in connection with the business of the assessee. This matter was also examined by the AO and travelled up to ld. CIT(A) but the issue was altogether different. Here the ld. CIT held the issue ....