2020 (6) TMI 647

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....ee is a private limited company engaged in trading and manufacturing of pharma products. It has efiled its return of income at Rs. 98,280/- . After processing the return under section 143(1) of the Act, the same was further selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. During the course of assessment proceedings, the AO has noticed that the assessee has paid commission expenses of Rs. 30,66,480/- which appeared to be not genuine. The commission expenses noticed by the AO in the impugned order were in respect of the following persons: Name of person Amount paid (in Rs.) Jagdish Chander Kumar 10,00,000 Neeru J Puri 5,00,000 Madhu Kumar 10,00,000 Devendra J ....

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....r Kumar of Rs. 10.00 lakhs, Smt.Madhu Kumar of Rs. 10,00,000/- and Smt.Neeru J Kumar of Rs. 5,00,000/-. Thus, he disallowed a total amount of Rs. 25.00 lakhs, and the remaining was allowed. In appeal, the ld.First Appellate Authority upheld the stand taken by the AO, but gave a part relief of Rs. 2,68,800/- in respect of commission payment paid to Smt.Madhu Kumar and confirmed balance amount of Rs. 22,31,200/-. Against this confirmation, the assessee is now before the Tribunal. 5. Before me, the ld.counsel for the assessee reiterated his submissions as were made before the Revenue authorities. The assessee filed a paper book which contained copy of agreement entered into with the agents and scope of work. It is placed at page no.40 and 4....

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....ted, and the same be allowed as business expenditure. 6. On the other hand, the ld.DR supported orders of the Revenue authorities. He further submitted that Revenue authorities have justified in disallowing claim of the assessee, because there was no evidence in the form of client base of a particular agent, correspondences made with the clients, rate of commission for each transaction and the agent-wise contribution to the assessee's turnover. Therefore, orders of the Revenue authorities require to be upheld. 7. I have considered rival submissions and gone through the record carefully. The issue before the Tribunal was whether the commission payments made by the assessee to the above agents are genuine and are allowable expenditure u....