AI Drafter 
TaxTMI 
TaxTMI 
2011 (12) TMI 621
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.... case. 2. The learned CIT (A) has erred in deleting the addition amounting to Rs. 1,39,50,088/- made on account of disallowance of claim of commission paid, without taking into consideration all the relevant provisions of the I T Act, 1961. 3. The learned CIT(A), as an authority, whose powers are coterminus with that of the Assessing Officer, has erred in deleting the addition relying only on the remand report submitted by the Assessing Officer, without examining the details/evidence filed by the assessee in course of the appeal proceedings, as per which payments of commission were made to certain parties exceeding the prescribed limit during the relevant previous year on whi....
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....ng total income of Rs. 30,52,320 which was processed u/s. 143(1) of the Act. Later on the case was selected for scrutiny. During the course of assessment proceedings, the AO noticed that the assessee had paid commission of Rs. 1,52,28,784 and the sale effected by the assessee was Rs. 6,83,31,749, as such commission payment was more than 22% of the sales. The AO asked the assessee to provide details of commission paid, the assessee submitted that the commission was paid to taxi drivers or bus drivers who brought customers to his shop and the nature of commission was secret commission for which absolute secrecy has to be maintained as the customers may not make purchases if they came to know that commission was taken by the persons brin....
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....f the letter dated 30-12-2006 of the Govt. owned M/s. Karnataka State Tourism. Development Corporation (KSTDC) stating that royalty of Rs. 2,00,000/- (which is nothing but commission paid) for stopping of its tourist sightseeing vehicles as Annexure 3. 4. Copy of the letter dated 28-12-2007 of M/s.KSTDC regarding the royalty paid for stopping of KSTDC local sightseeing buses as Annexure - 4. 5. Copy of the letter dated 26-05-2009 of M/s. KSTDC regarding the royalty paid for stopping of KSTDC local sightseeing buses as Annexure - 5. 6. Copy of the letter dated 09-03-2010 of M/s. KSTDC regarding the royalty paid for stopping of KSTDC local sightseeing buses as Annexure-6. 7. Copy of the letter addressed to ....
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....ted that the vouches produced by the appellant were self - made vouchers and that no TDS was made on the payments to the drivers. It is submitted that the appellant has paid commission to the drivers and guides, which do not attract the provisions of TDS and that the payment made to the drivers are supported by documentary evidences as are in vogue in this line of trade. In as much as the learned AO has doubted the payment of commission at the rates claimed, the learned AO allowed only 2% of the turnover as deduction on estimate basis. It is submitted that, the appellant has since secured affidavits from some of the drivers and guides, explaining the trade practice as well as confirming the receipt of commission from the appellant. Pl....
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....sion, genuineness of transactions, linkage of transactions with sale, reasonableness (high Percentage of commission at 20% to 24%). 2. During the course of remand proceedings, the details furnished by the assessee have been carefully perused. Annexure- 3 to 7 appended to the written submissions substantiate that the assessee has incurred expenditure by way of royalty to one of the govt. owned organizations namely Karnataka State Tourism Development Corporation for stopping the Bangalore sight seeing coaches at the business premises of the assessee. The other documents submitted in connection with the payment towards travel agents for bringing the customers (tourists) to the business premises of the assessee. The details of Identity....
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....ted the submissions made before the authorities below and further submitted that the assessee could not furnish all the evidences in support of his claim during the course of assessment proceedings, but those were furnished to the ld. CIT(A) as additional evidences and the ld. CIT(A) confronted all those evidences to the AO, who accepted in his remand report that the commission paid by the assessee was reasonable. Therefore, the ld. CIT(A) was justified in deleting the addition. 11. We have considered the submissions of both the parties and gone through the material on record. In the instant case, the AO in his remand report has accepted that the assessee incurred expenditure by way of royalty to the Government organization v....