TaxTMI 
TaxTMI 
2016 (3) TMI 1149
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....business and the Assessee has failed to produce any evidential proof regarding services rendered by such parties. 2). On the facts and in the circumstances of the case, the Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad ought to have upheld the order of the Assessing Officer. 3). It is therefore, prayed that the order of the Ld. Commissioner of IncomeTax (Appeals)-XlV, Ahmedabad may be set-a-side and that of the order of the Assessing Officer be restored. 3. Briefly stated facts as culled out from the records are that assessee is a private limited company engaged in the business of manufacturing and formulation of medicines. It filed its return of income on 17.9.2009 through electronic media declaring total income of Rs. 24,80,610/-. The case was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued on 19/08/2010 and duly served upon the assessee. During the course of assessment proceedings information was called for by the Assessing Officer about the genuineness of commission expenditure of Rs. 51,56,882/- and various details and explanation were submitted by the assessee. However, it partly satisfied the Assessing Officer and s....
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....d for Venkata Yamuna Impex and no proof submitted by assessee for services rendered by the parties in question. The AO has given proper opportunity to the appellant and asked for the confirmations from the parties to whom commission has been paid. The show cause for commission paid account of R$. 49,32,229/- has been given. The affidavit dated 29706/2012 filed by Shri Dhaval Shah (AR attended assessment proceedings) saying that no proper opportunity was given and only 7 days were given to file details including certain details to be called from outstation parties. The details which the appellant intended to file for consideration have been filed during the course of appeiiate proceedings and same were sent to the AO for his comments. . Further, in the assessment order, the AO has relied on following case laws: (i) Assam Pesticides Vs. CIT [227 ITR 846], Gauhati HC (ii) CIT Vs. Premier Breweries Ltd. [279 ITR 51 (Ker) (iii) Bhargav Refrigeration Industries Pvt. Ltd. Vs. ITO [28 TTJ 587], ITAT, Delhi Bench (iv) ITO Vs. Maddi Laxmaiah & Co. (P) Ltd. [31 ITJ 71 (Hyd] The AO has emphasized that the mere payment by itself does not qua....
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....A. The information submitted by appellant is reproduced in tabular form below: Sl. No. Name of the party Address P.A.No. Gross commission TDS amount Net commission 1. Allianz Pharma Care Plot No.201, Bapuji Nagar, Bhubaneshwar771003 AAMFA 3767G 99110 10209 88901 2 Amegh Pharma P. B-606, Crystal Plaza, New Link Road, AAGCA 4614H 642000 66125 575874 Ltd. Andheri(W), Mumbai400053 3. Gokul Traders 9, 1^st floor, National Chambers, Nr. City Gold Multiplex, Ashram Road, Ahmedabad-380009 AJBPS 1381E 217462 22464 194998 4 Jigna S Shah 121,Manekbaug Society, Nehru Nagar, Ahmedabad ANKPS 7883E 399932 41192 358740 5 Sanidh B. Shah 6, 1" Floor, National Chambers, Nr. City Gold Multiplex, Ashram Road, Ahmedabad 380009 AJBPS 2294N 195000 20085 174915 6 Jagumani Dash Plot No. 90, Lane ....
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....ted, indicates that the services have been rendered for appellant's business by these commission agents. In my opinion, the appellant has discharged its onus by filing all possible details including confirmations and TDS and successfully established that the genuine expenditure has been expended for the business purposes. On the other hand, the AO could not gather the positive evidences for the department and taken decision based on presumptions and not on the facts on record. The ground of appeal is accordingly allowed. 9. We find from going through the order of ld. CIT(A) that assessee has submitted complete details of party-wise commission paid, as well as TDS deducted thereon, along with confirmation from the parties, full particulars with PAN and copies of liaison agreement with various parties. It is a general accepted fact that in pharma business commission expenses are incurred for boosting up sales and it is a usual practice. We further find that assessee gross turnover is also increased to 15.17 crores from Rs. 10.66 crores in the immediate preceding financial year and profit has also doubled reaching Rs. 20.74 lacks in the year under appeal from Rs. 11.06 lacs. We....
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....crutiny assessment and notice u/s 143(2) of the Act was issued on 21.9.2011 and duly served upon the assessee. After receiving the submissions and various details from assessee assessment was framed on 11.3.2013 assessing the income of assessee at Rs. 61,26,790/- after making following additions :- 1) Disallowance of commission & distribution charges Rs.42,32,375/- 2) Disallowance of prior period expenses Rs. 2,76,912/- 3) Disallowance u/s 36(1)(va) Rs. 13,601/- 13. Aggrieved, assessee went in appeal before CIT(A) who deleted the additions made by the Assessing Officer. 14. Aggrieved, Revenue is now in appeal before the Tribunal. 15. Ground no.1 of the appeal relates to deletion of disallowance of commission and distribution expenses. After considering the rival contentions and perusing the material on record, we would like to mention that we have already dealt with similar ground for Asst. Year 2009-10 in ITA No.1162/Ahd/2013 above and have dismissed the ground of Revenue vide para no.8 & 9 above holding that the commission expenditure claimed by the assessee was genuine. The issue being similar, we apply the ratio of our above decision to this ground al....
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....nt. Having not claimed expenditure in A. Y. 2009-10, the appellant has paid more income tax in A. Y. 2009-10. In view of ratio laid down by Hon'ble Bombay High Court decision in the case of CIT vs. Nagri Mills reported in 33 ITR 681 (Bom), Gauhati High Court in the case of CIT Vs. Nathmal Tolaram [88 ITR 234 (Gauhati)] and Calcutta High Court in the case of Sutna Stone & Lime Co. Ltd. Vs. CIT [192 ITR 478 (Kol), the disallowance made by the AO is directed to be deleted and the ground of appeal is accordingly allowed. 20. From going through the above observations made by ld. CIT(A) as well as going through the facts of the case that these expenses were claimed in the preceding years and the same has not been controverted by the Revenue and looking to the course of business of assessee wherein assessee is having various branches and details of expenses are to be sent to the head office then there remains the possibility that some invoices which pertain to prior period have been received by the head office of the assessee during the year under appeal. As the genuineness of the expenditure has not been doubted we find no reason to interfere with the order of ld. CIT(A) who has r....