2012 (7) TMI 1024

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....of this common order for the sake of convenience. 2. The assessee is in manufacturing of Tractors, Trolleys, agricultural equipments, Municipal utilities etc. The main ground of appeal is against disallowance of Rs. 2,00,000/- for A.Y. 07-08 out of commission of Rs. 10,00,000/- paid to six persons u/s 40A(2)(b) of the IT Act & Rs. 1,90,000/- for A.Y. 08-09 out of commission of Rs. 9,50,000/- paid to four persons u/s 40A(2)(b) of the IT Act. The A.O. noticed that there was a commission payment of Rs. 19,56,259/- for A.Y. 07-08 & Rs. 92,92,394/- for A.Y. 08-09 to various persons including bank commission and charges. The assessee had paid commission to family members who are covered u/s 40A(2)(b) of the IT Act. Commission paid to follow....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ings. The Hon. Supreme Court In the case of Laxmirattan Cotton Mills [73 ITR 634] , has stated that the burden of proving that services were rendered by the managing agents for earning the remuneration lay upon the company and If no reliable evidence was forthcoming the Tribunal was competent to reach the conclusion that It did. The recitals In the managing agency agreement which authorised the managing agents to do certain acts could not be a substitute for evidence that those acts were done by the managing agents. Further, the Hon. Supreme Court In the case of Lachminarayan Madanalal [84 ITR 439] , has stated that mere existence of an agreement between the assessee and Its selling agents or payment of certain amounts as commission, assumi....