TaxTMI 
TaxTMI 
2018 (7) TMI 216
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...., the Ld.CIT(Appeals) has erred in deleting the addition of Rs. 40,03,210/- made by the Assessing Officer being disallowance of commission paid to related party. 3. Brief facts of the case are as under : The assessee is wholesale dealer in country liquor and running the property concern in the style of Adwani Wine Agency, Amravati. The Assessing Officer in the course of assessment proceedings found that the assessee has claimed sales commission expense of Rs. 40,03,210/- in the P&L a/c. The commission is claimed to have been paid to Shri Shankarlal K. Advani Prop. of M/s Shiv Products, Amravati. The Assessing Officer found that the commission is paid to a single party and all the payments have been made on the last day of the financia....
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....efore the Assessing Officer which is reproduced on page no. 5 to 10 of the assessment order. The Assessing Officer, however, declined to agree with the contentions raised by the AR and disallowed the commission for the reasons firstly, that the creditability of deposition made by Shri Shankarlal Advani is doubtful in as much as that it not logical to understand that how can a businessman who is running two proprietary concerns is not aware of exact date and time of execution of agreement. Thus, by pointing out certain infirmities in the statement recorded and after invoking the provisions of section 40(A)(2)(b) of the Act, the Assessing Officer disallowed the entire commission paid to the Shri Shankarlal Advani. 4. Against the above orde....
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....vidence but state the actual state of affairs as regards to the engagement in the business of the appellant. The inference drawn by the ld. AO that no salary or commission was received by Shri Shankarlal Advani from the appellant in lieu of having rendered the services in the past several years, therefore, the commission received in the year under appeal is not genuine is not based on sound footings in as much as that the said Shri Advani in his deposition has categorically clarified that no payments of whatsoever nature were received by him from the appellant till the partition has occurred in the joint family and it is only after the partition of joint family that he had charged the salary or commission for the services rendered to the ap....
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.... preceding FY 2010-11. The ld. AO in his order has recorded a finding that there is no competition with the business of the assessee in the area. However, the same does not appear to be correct and several other brands such as tango punch, bhingri, ploycam, badi saunf, mango, sakhu santra, blue santra, brands are in competition in the area with the brand called boby dealt with by the appellant. Thus, saying that there exists no competition in appellant's business would not be correct, as otherwi se also in an economy with free market conditions, the competition is inevitable. The appellant has been paid the commission as per the terms of the agreement dtd. 01.04 .2011. The Id. AO has also stated that the agreement is not registered, but....
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....er contra, the learned counsel of the assessee submitted that the assessee has made genuine payment of commission which is supported by the necessary documentary evidence as well as the confirmation by the payee himself before the assessing officer. The submission of the learned counsel of the assessee in this regard is summarized as under: A. Assessee is a female senior citizen and proprietor of M/s. Adwani Wine Agency, Amravati which is wholesale dealer in country liquor. B. Her business is spread throughout scores of villages & talukas located in remote areas of Amravati & Akola Districts. C. Commission of Rs. 40,03,210/- has been paid by assessee to Shankarlal Adwani who looks after day to day activities such ....
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....O. has not brought on record any evidence signifying no actual services have been rendered by Shankarlal Adwani. K. Shankarlal Adwani categorically clarified no payment were received before him from appellant till the partition and only after partition he has been receiving commission. No payment of commission in last year cannot be the basis to determine its genuineness during concerned assessment year. L. Assessee deals in the brand named 'boby' of country liquor and there are other brands also existing in same area such as -'tango purchase, bhingri, ploy car, badi sarnf, mango, sakhu santra, blue santra' and hence competition does exists & services of commission agents are required considering the busine....