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2017 (10) TMI 1465
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....and engaged in the business of manufacturing and sale of organic inorganic and micronutrient fertilizers. Assessee filed the original return of income on 29-09-2010 declaring total income of Rs. 1,16,41,403/-. In the scrutiny assessment made u/s.143(3) of the Act, the AO determined the assessed income at Rs. 2,01,61,000/-. Among many, the AO made addition of Rs. 27,79,911/- on account of disallowance u/s.14A of the Act and disallowance of Commission u/s.40A(2)(b)(iv) r.w.s. 36(1)(ii) amounting to Rs. 41,33,000/-. AO rejected the assessee's submission that revolves around the settled presumption of making investment out of the interest free funds in the exempt income yielding investments. In the process, the AO ....
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.... No.217/PUN/2015 (By Revenue) : 5. We shall now take up the appeal of the Revenue. Grounds raised by the Revenue read as under : "1. The order of the Ld.CIT(A) is contrary to law and to the facts and circumstances of the case. 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the disallowance of expenditure of Rs. 41,33,000/- u/s.36(1)(iii) r.w.s. 40A(2)(b)(iv) of the I.T. Act made by the Assessing Officer on account of commission paid to working directors and other employees. 3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has failed to appreciate the fact that there was abnormal increase in payment of ....
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....T(A) dismissed the conclusions drawn by the AO and deleted the addition made by the AO. 8. Before us, the Ld. Counsel for the assessee read out the said written submissions and explained the arguments on the factual matrix relating to this issue. He further mentioned that the AO must not step into the shoes of the assessee when it comes to running of the business and requirement of making payment of commission etc. He also submitted that the recipients of the commission were taxed independently at the maximum marginal rate. Therefore, there is no loss of Revenue on this account. 9. The Ld. DR for the Revenue relied heavily on the order of the AO and submitted for confirming the addition. 10. On he....
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....he disallowance is held to be not justified and the ground No. 4 is allowed." 11. From the above, we find that the CIT(A) considered the fact that the commission was paid as per the Board Resolution and Authorisation of the Board of Directors. The CIT(A) also held that the services rendered are proportionate to the commission paid by the assessee. She also discussed the fact that recipients of the commission have paid the taxes on the said commission at the highest tax rate. So far as the contention of the AO on the commission issue paid to relatives, she mentioned about not bringing any comparable cases to demonstrate the unreasonableness or excessiveness of the same. Therefore, in our view, the view taken....
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....313 ITR 340 and held that the same has no merit. No reasons are given for giving such categorical finding considering the facts of the present case. CIT(A) also referred to the Special Bench decision in the case of ACIT Vs. Cheminvest Limited Vs. CIT reported in 124 TTJ 577 before confirming the addition made by the AO. 15. Aggrieved with the order of CIT(A) the assessee is in appeal before us. 16. Before us, Ld. Counsel for the assessee submitted that the exempt income is only Rs. 17,8,000/- whereas the disallowance made by the AO is to the tune of Rs. 27,29,202/-. On the faces of it and considering the settled legal propositions, the same is not legally sustainable. Various decisions are in exis....