TaxTMI 
TaxTMI 
2017 (10) TMI 775
X X X X Extracts X X X X
X X X X Extracts X X X X
....ases or for selling the chemical gases to various parties. 3. The Commissioner (Appeals) failed to appreciate that the assessee paid commission to the agents on the basis of the discount obtained from the parties from whom chemical gases were purchased by the assessee. 4. The Commissioner (Appeals) failed to appreciate that the assessee paid commission to the agents on the basis of the increased price obtained while selling the chemical gases and thus the commission was based on the price procured while selling the gases. 5. The Commissioner (Appeals) failed to appreciate that the assessee has shared the additional profit earned due to the services of the commission agents by giving commission which was based on the profit earned from each of the transactions. 6. The Commissioner (Appeals) failed to appreciate that in the course of the business of trading in chemical gases, the assessee had incurred expenditure of paying commission to various agents and therefore, the same ought to have been allowed while computing business income of the assessee. 7. The order of the Commissioner (Appeals) disallowing commission of Rs. 6,04,984/-is bad i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he ground that the assessee failed to establish the genuineness of the commission paid and the nature of the services rendered. Action of A.O. was confirmed by CIT(A) against which assessee is in further appeal before me. 6. It was argued by learned AR that assessee had produced the evidence in the form of name, address, PAN and details of payment of commission by crossed account-payee cheques after deducting TDS to each of the six commission agents. The assessee had also furnished confirmation of accounts of each of these commission agents before the Commissioner (Appeals). The assessee also adduced evidence in the form of e-mails and other details to show that these commission agents rendered services for which the assessee had paid commission to them. It was also brought to our notice that out of six agents, three agents namely, Mr. Sandeep More. Mr. R.B. Rahate and Mr. Narayan Hegde, were the commission agents to whom commission was paid for the A.Y. 2009-10 and the said commission was allowed by the AO while making scrutiny assessments u/s.143(3). To these three commission agents, the assessee paid aggregate commission of Rs. 5,41,538/-out of total commission paid of Rs. 6,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Kamble I find that Mr. Gautam Kamble was working as a Sales Manager of M/s. Chemtron Science Laboratories Pvt. Ltd. which was engaged in the business of manufacturing various special mixture gases used for Pharma and Industrial use, Mr. Gautam Kamble had facilitated the assessee in procuring various special mixture gases, calibration gas mixture, pure gases, etc. within the timeframe from the said company and accordingly, the assessee had compensated him for the assistance by paying commission of Rs. 24,613/- on purchase of various special mixture gases of Rs. 5,85,668/-from M/s, Chemtron Science Laboratories Pvt. Ltd.. At pages 23 to 31, the assessee had filed e-mail correspondence with Mr. Gautam Kamble for different requirements of the assessee of special mixture gases which showed that Mr. Gautam Kamble had assisted the assessee in procuring special mixture gases from M/s. Chemtron Science Laboratories Pvt. Ltd. within the timeframe provided by the customers of the assessee. 12. With respect to the commission paid to Shri Rajendra B. Rahate I found that Mr. Raiendra B. Rahate was an employee of M/s. Development Corporation of Konkan Ltd. He had introduced himself to the prop....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mission of Rs. 3,02,500/- to Mr. Narayaan Hegde for the aforesaid services in procuring the various gas cylinders of Rs. 13,98,311/-. The assessment for A.Y. 2009-10 was scrutinized and the AO had allowed commission paid to Mr. Narayan Hegde vide the assessment order u/s. 143(3) of the Act dated 15lh December, 2011. Subsequently, the assessment for A.Y. 2009-10 was reopened and the assessment was completed u/s. 143(3) r.w.s. 147 of the Act on 13th November, 2014. In both these scrutiny assessments, commission paid by the assessee to various agents, both for procuring gas cylinders and for selling the gas cylinders to various customers, was allowed. 16. As per documents placed on record, I found that during the year ended 31st March, 2010, relevant to A.Y. 2010-11, one Mr. Ketan Panchal introduced M/s. DNA Entertainment Pvt. Ltd. for sale of various gas cylinders and accordingly, the assessee had sold gas cylinders aggregating to Rs. 2,68,606/-. As this was a new customer, the assessee paid commission of Rs. 27,778/- to Mr. Ketan Panchal. 17. In respect of payment of commission to Mr. Sandeep Sonar, I found that Mr. Sandeep Sonar had introduced himself to the assessee as a Sal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....andeep More and Rs. 64,833/- to one Mr. Gautam Kamble for purchase of different gases in cylinders from the manufacturers with whom both these parties were working. Mr. Sandeep More was working in the Accounts Department of M/s. Linde India Limited (formerly known as M/s. BOC India Limited) which was manufacturing high quality gases like Helium, Argon, Nitrogen, etc. used by pharmaceutical industries. During the year ended 31il March, 2012, the assessee had purchased different gases from M/s. Linde India Limited for the aggregate amount of Rs. 42,75,413/-. Mr. Sandeep More used to facilitate the procurement of different gases required by the assessee for supply of the same to its customers in the time frame given by the customers including preparing of documents for supply of the said gases. To show that Mr. Sandeep More used to assist the assessee in procurement of gas cylinders for its customers, copies of e-mail correspondence with Mr. Sandeep More as well as other officers of the company were filed which are placed at pages 17 to 22 of the Paper Book. To prove that Mr. Sandeep More was working in the Accounts Department of M/s. Linde India Limited, copies of payment receipt wer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gh the involvement of Mr. R.B. Rahate. The assessee paid commission of Rs. 16,7577- to Mr. R.B. Rahate by account-payee cheques. Copy of sample invoices indicating the regular supply of Liquid Nitrogen along with delivery challan and email correspondences indicating that the agent used to share the relevant tenders and requesting for quotation of liquid nitrogen, thereby assisted the assessee to sell its product and by managing the relationship between the assessee and the customer namely, M/s. Development Corporation of Konkan Ltd., I also find that in the previous year relevant to A.Y. 2009-10. the assessee had paid commission of Rs. 32.413/- to Mr. R.B. Rahate for the aforesaid services in procuring the various gas cylinders to M/s. Development Corporation of Konkan Limited of Rs. 5.34,758/-. The assessment for A.Y. 2009-10 was scrutinized and the AO had allowed commission paid to Mr. R.B. Rahate vide the assessment order u/s.143(3) of the Act dated 15n December, 2011. Subsequently, the assessment for A.Y. 2009-10 was reopened and the assessment was completed u/s.143(3) r.w.s. 147 of the Act on 13th November, 2014. In both these scrutiny assessments, commission paid by the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hrough the agent amounting to Rs. 11,08,798/- in A.Y. 2012-13 (twice the sales in comparison to A.Y. 2011-12). Similarly, the representative brought more business from the factory at G-06 of M/s. Arch Pharma Lab Ltd. situated at Taloja of Rs. 47,78,278/- (3l/2 times the sales in A.Y. 2011-12). The assessee has sold liquid nitrogen to M/s. Arch Pharma Lab Ltd. through the agent at a rate ranging between Rs. 38/- and Rs. 47/- per cubic meter which is much higher than the market rate for the same product. The confirmation letter dated 27th September, 2013 of Mr. Azeem Shemna of M/s. Arch Pharma Lab Ltd. confirming that Mr. Mukesh Jain was representative of the assessee through whom M/s. Arch Pharma Lab Ltd. had purchased various gases such as Argon, Nitrogen, Helium. Oxygen, etc. was also filed and placed on record. The assessee had paid commission of Rs. 13,02,777/- to Mr. Mukesh Jain by account-payee cheques. 26. In respect of payment of commission to Mr. Ajay Sharma, Mr. Ajay Sharma had introduced himself to the assessee as a Sales Representative for procuring orders for sale of gas cylinders from the existing customers as well as from the new customers. In this endeavour, he br....