TaxTMI 
TaxTMI 
2018 (11) TMI 124
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the entire expenses incurred and claimed by the assessee on account of commission, ought to had been allowed. 4. That the Ld. CIT(A) had erred in picking up the figure of Rs. 90,72,893/- to make addition / disallowance in respect of commission paid to M/s Sumiti Alloys (P) Ltd., particularly when the assessee had claimed such expenses to the tune of Rs. 82,25,651/- only. 5. That there was no justification on the part of the Ld. CIT(A), to not allow expenses of Rs. 29,87,722/- (being the amount of commission worked out @6% in respect of export sales of Rs. 4,97,95,361/-), particularly when the Ld. CIT(A) had done so solely on presumption / assumption basis, without bringing on record any adverse material. 2. The brief facts of the case are that the assessee company filed its return of income declaring an income of Rs. 1,78,46,289/- on 28.9.2010. The case of the assessee was selected for scrutiny and notice u/s. 143(2) of the Income Tax Act, 1961 (in Short "Act") was issued on 29.8.2011. Again notice u/s. 143(2) of the Act alongwith questionnaire u/s. 142(1) of the Act was issued on 7.11.2012. In response to notices, the A.R. of the assessee appeared from time to time and file....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on / disallowance in respect of commission paid to M/s Sumiti Alloys (P) Ltd., particularly when the assessee had claimed such expenses to the tune of Rs. 82,25,651/- only. It was further submitted that that there was no justification on the part of the Ld. CIT(A), to not allow expenses of Rs. 29,87,722/- (being the amount of commission worked out @6% in respect of export sales of Rs. 4,97,95,361/-), particularly when the Ld. CIT(A) had done so solely on presumption / assumption basis, without bringing on record any adverse material. In view of the above, the requested that the impugned order may be cancelled and the appeal of the Assessee may be allowed. 4. On the other Ld. DR relied upon the order of the Ld. CIT(A) and stated that he has rightly enhanced the addition in dispute. 5. We have heard both the parties and perused the records especially the Ld. CIT(A)'s order wherein he has enhanced the addition and the Affidavit filed by the Assessee wherein it was stated that no appeal against the appellate order dated 7.5.2013 was passed by the Ld. CIT(A) in the case of M/s Garg Tubes Limited for AY 2009-10, was filed by the AO before the Tribunal; no notice u/s. 147 of the Act for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pany ITAT Delhi Bench ITA No. 6510/Del/2014 Order dt. 12.04.2018 6. It was further noted that M/s Sumiti Alloys (P) Ltd. (who was in no way related to the assessee) had rendered services to the assessee and charged commission for the first time for F.Y. 2009-10. As a matter of fact, M/s Sumiti Alloys (P) Ltd. had rendered services to the assessee in past also i.e. for F.Y. 2008-09, for which it had charged commission of Rs. 1,15,09,628/- from the assessee. We further note that at the back of the assessee, the Ld. CIT(A) had made inquiries from the Irrigation Department, Jal Sansthan Uttarakhand and Jal Nigam Uttar Pradesh, by issuing letter dt. 30.06.2014 u/s 133(6). The Ld. CIT(A) had reproduced his said letter in para 5.5 of the appellate order. As per para 2 of the said letter, the Ld. CIT(A) had stated that M/s Garg Tubes Limited has claimed that it had made sales to the offices of various Executive Engineers, though an intermediary - M/s Sumiti Alloys (P). Ltd. As per para 4 of the said letter, the Ld. CIT(A) had asked the concerned officials to inform him that "as to whether they have procured any material from M/s Garg Tubes Limited through any inter-mediatory party or not.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s Sumiti Alloys (P) Ltd. reveals that it had clearly mentioned that (i) it had rendered services to Garg Tubes Ltd. thereby facilitating it to make sale of their products -Steel Tubes to Jal Nigam/Jal Sansthan (ii) it had been agreed between them that it will be entitled to charge 6% of the total amount of the sales effected by Garg Tubes Ltd., for which it had rendered services; (iii) it had charged commission of Rs. 1,51,09,628/- for F.Y. 2008-09 and Rs. 82,25,651/- for F.Y. 2009-10 from M/s Garg Tubes Ltd;, and (iv) M/s Garg Tubes Ltd. had deducted tax at source. Therefore, it is an undisputed fact that the expenditure incurred / claimed by the assessee for F.Y. 2008-09 on account of commission of Rs. 1,51,09,623/- paid to M/s Sumiti Alloys (P) Ltd. stood accepted, in as much as no action had been taken against this issue. Under identical circumstances, the assessee had incurred/claimed expenses on account of commission of Rs. 82,25,651/- paid to M/s Sumiti Alloys (P) Ltd. for F.Y. 2009-10. For the sake of consistency, the same view should be continued to prevail in subsequent year i.e. for F.Y. 2009-10 relevant to A.Y. 2010-11. Hence, we place reliance on the decision of Hon'bl....