TaxTMI 
TaxTMI 
2017 (12) TMI 1156
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....s claim for deduction of commission paid to the various brokers. 2. The assessee in the present case is a partnership firm, which is engaged in the business of purchase and sale of DEPB License. The return of income for the year under consideration was filed by it on 26.09.2010 declaring total income of Rs. 1,58,403/-. In the Profit & Loss Account filed along with the said return, a sum of Rs. 34,78,933/- was debited by the assessee on account of commission paid to various parties. Although confirmations from some of the parties to whom the commission was paid could be produced by the assessee during the course of assessment proceedings, other documentary evidence in the form of bills raised by the said parties and other details regardin....
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.... Sir our books of Accounts are audited and we have submitted all the audited Statement of Accounts along with Tax Audit Reports to the AO., during the course of Scrutiny assessment. (Copy enclosed for your perusal) ; We hereby submit you the detailed statement of party-wise Commission paid, TDS ledger and Bank Statement of HDFC bank showing the particulars of TDS paid through that Bank, Copy enclosed. Your honour sir, during the course of the scrutiny, for the assessment year 2010-11, the Ld. Assessing Officer has wrongly observed and stated that the commission of Rs. 34,78,933/- paid to different parties are not being evidenced at all and based on the same he disallowed the same and computed the total income by disallowin....
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.... It has been held by the Hon'ble Calcutta High Court in the case specified below that the AO should be guided by Rules of justice, equity and good conscience, and in making the best judgment the AO does not possess absolute arbitrary authority to assess any figure he likes. We may refer to the decisions of the case law, CIT Vs. Ranicherra Tea Co. Ltd.[1994] 207 ITR (Calcutta High Court) In view of the above, it is hereby prayed before you Sir, to delete those additions due to the fact that all these additions are erroneous and based on mere assumptions/ biased thoughts and without any material facts and totally unrealistic. The appellant craves leave to make further submission & produce further evidences/ documents during th....
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....es are purchased from exporters and sold to importers through brokers/commission recipients and commission payments were made after deducting tax at source and could be verified from its books of account. It was also stated that the commission receipts and the fact of having rendered services was confirmed by the payees and payment of commission could be duly verified form its books of account and bank statements. In respect of Shri Vikas Khandelwal and Shri N. Rajesh Jain, HUF it was specifically contended by the appellant vide letter dated 03.11.2015 as under: "But in case of Sri Vikas Khandelwal, the party has been paid both by cash & Cheque, as per the verification of the AO from the bank statements of the said party, it shows ....
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....he copies of the bank statements that the assessee had paid commission to Shri Vikas Khandelwal and Shri N. Rajesh Jain, HUF. From the above facts and reports, it is clear that identity of the persons to whom commission was paid and inquired into by the AO has been established and they have confirmed receiving the commission with supporting evidence. Except in the cases of Shri Vikas Khandelwal and Shri N. Rajesh Jain (HUF), the amounts have also matched which have subsequently been verified by the Assessing Officer. As regards the discrepancies, all the payments claimed in N. Rajesh Jain (HUF) are reflected in the appellant's bank statement and in respect of Shri Vikas Khandelwal, some payments were in cash but tax was deducted at sour....
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....he ld. CIT(Appeals) while allowing the claim of the assessee for commission. 6. The ld. counsel for the assessee, on the other hand, submitted that the business of the assessee is that of dealing in DEPB License and since the purchase and sale of DEPB License is normally done through brokers, expenditure is required to be incurred on payment of commission to them. He submitted that all the parties with whom enquiry was made by the Assessing Officer have confirmed of having received the commission from the assessee and there being nothing adverse brought on record, the disallowance of commission made by the Assessing Officer was totally unjustified which the ld. CIT(Appeals) has rightly deleted. He accordingly relied strongly on the impug....