TaxTMI 
TaxTMI 
2018 (10) TMI 1038
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....eal of the assessee. The assessment year involved is 2009-10. 2. As per the appellant, following substantial questions of law, arise for consideration: 1. Whether under the facts and circumstances of the case, while arriving at the 'chargeable income' u/s 29 considering the Provisions of Section 37(1) r.w. Section 40A(2)(b), the disallowance of business expenditure to the persons/recipients of the amount on which TDS deducted u/s 194H, is an unreasonable action since the books of accounts not rejected u/s 145 hence a misapplication of jurisdiction, while the recipient's income is chargeable to tax u/s 5 of the Income Tax Act, 1961? II. Whether under the facts and circumstances of the case, the claim for allowing business ex....
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....appellant to supply the complete list of the students sent abroad by her along with their addresses. The list was not supplied by stating that hard disk of computer containing the relevant data had crashed. The A.O. was not convinced and disallowed 50% of expenses claimed i.e. commission paid by the appellant. Apart from other additions, A.O. made an addition of Rs. 40,65,000/- vide assessment order dated 26.12.2011. 4. Aggrieved of the assessment order, an appeal was filed before the Commissioner of Income Tax (Appeals) [for short ' CIT (A)]. 5. In appeal proceedings, after availing two opportunities, the appellant was able to produce only 21 persons out of 43 to whom commission paid was claimed as expenses. The CIT(A) partly allowed....
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....heir statements. In spite of repeated requests made by the Assessing Officer, the assessee could not provide the desired details of students from whom independent verification can be made with regard to services rendered by the recipient of commission. The recipients of commission who were examined by the Assessing Officer have also failed to provide the complete particulars of the students who were referred by them to the assessee. The audit report is also not reliable as the payment of commission to the specified persons has not been mentioned in the report. The assessee has also paid commission to her daughter who was a student at the relevant time. The basis question which is required to be answered is that as to whether the recipient o....
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....on at the end of Assessing Officer. I also endorse the view of the Assessing Officer that the books of amount maintained by the assessee are not reliable as these do not contain even the basic data with regard to complete particulars of students who have been sent abroad." 6. Further appeal was filed before the Tribunal. The Tribunal vide order dated 24.06.2016 dismissed the appeal. Relevant portion of the order of Tribunal is quoted below: "8. We have heard the rival parties and have gone through the material placed on record. We find that it is an undisputed fact that the recipients of commission had accepted to have received the amounts from assessee. The assessee has been claiming before authorities below that she used to pay Rs. 20....
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..... The payment of expenditure through cheques and deduction of tax therefrom does not necessary mean that assessee had incurred the expenditure. The Hon'ble Gauhati High Court in the case of Assam Pesticides and Agro Chemicals vs. CIT 227 ITR 846 has held that mere payment does not entitle the assessee to deduction unless it is proved that the payment was for business considerations. The assessee might have booked this expenditure to reduce the incidence of taxation by distributing the income in the hands of other persons having lower bracket of tax as the payees are individuals. We also observe from the findings of ld. CIT(A) that assessee had paid commission to the husband, daughter and other close relatives of asseessee. From the find....
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....imed that she had paid commission for referring the students to her. The details of the students sent abroad was withheld on the ground that hard disc of the computer had crushed. No account was produced to substantiate that the record was being kept as to how much commission was paid to each of the persons, especially when the commission was paid on last day of the year. Inspite of the opportunities provided by the CIT(A) also the assessee was able to produce only 21 persons out of 43 who had received the commission. The recipients of commission, who appeared in the proceedings, were not able to give detail even of a single student which they had referred to the appellant. The deduction of TDS and payment made by cheque in itself would not....