TaxTMI 
TaxTMI 
2019 (10) TMI 1514
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....ng the disallowance of Rs.7,26,151/- being 75% of total disallowance of brokerage and commission expenditure of Rs.9,68,201/- made by ld. AO. 2. The Id. CIT(A) has erred both in law and on the facts of the case in upholding the disallowance of brokerage / commission of Rs.9,35,000/- paid to Smt. Padmaben M. Vora made by ld. AO. 3. Both the lower authorities have failed to appreciate that the entire brokerage and commission expenditure has been incurred out of commercial expediency and was commensurate with the nature of business of the Appellant and therefore the same ought to have been allowed as business expenditure as claimed by the Appellant. 4. The Id. CIT(A) has further erred in law and on the facts of the ace in confirming the ....
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....nt u/s. 143(3) of the act was finalized on 25th March, 2010 and total income was determined at Rs. 32,04,281/- after making various additions. The remaining facts of the case are discussed while adjudicating the various grounds of appeal of the assessee as under:- Ground No. 1(Confirming disallowance of Rs. 7,26,151/- being 75% of commission expenditure of Rs. 9,68,201/-) 4. During the course of assessment, the assessing officer noticed that the assessee has incurred an amount of Rs. 9,68,201/- in cash towards commission paid to 774 parties. During the course of assessment, the assessee has failed to furnish any address and other relevant details of the parties to whom the commission were paid, therefore, the assessing officer could not ....
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....tted that she has never gone out of the house and not having her own office. Smt. P.M. Vora, mother in law of the assessee failed to demonstrate rendering of services against commission payment of Rs. 9,35,000/- made by the assessee. Consequently, the claim of commission payment to the mother in law of the assessee was disallowed and added to the total income of the assessee. Ground No. 4 (Confirming disallowance of salary expenses of Rs. 8 lacs) 6. At the time of assessment, the assessing officer observed that assessee has debited salary expenses of Rs. 11,93,300/- and shown an amount of Rs. 8 lacs as salary payable under the head sundry creditors. On query by the assessing officer, the assessee has furnished the details of employees to....
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....ot be treated as business transaction. The assessing officer has not accepted the explanation of the assessee stating that few transactions almost of purchases and sales have been made within 30 days of its purchase and assessee had made these transactions with the intention of earing a profit. Therefore, the assessing officer has treated the same as business income instead of short term capital gain shown by the assessee. 9. Aggrieved assessee has filed appeal before the ld. CIT(A). In respect of commission payment of Rs. 9,68,201/- to 774 parties. The ld. CIT(A) has held that the assessee has failed to prove the genuineness of commission payment, rendering of services, the whole payment was made in cash and the addresses of the recipient....
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....ces. The assessee has neither substantiated the services rendered by the recipient of the commission nor furnished the addresses of the recipient of commission parties as a result the genuineness of the commission payment could not be established. Under the circumstances, we consider that the ld. CIT(A) has reasonably restricted the disallowance to 75% of the aforesaid expenditure of Rs. 9,69,201/- claimed to be made to 774 parties, therefore, we do not find any infirmity in the decision of ld. CIT(A). 14. Regarding claim of payment of commission of Rs. 9,35,000/- to Smt. Padmaben M. Vora who was the mother in law of the assessee, it is observed that in spite of giving a number of opportunities by the assessing officer and ld. CIT(A), the ....
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....es employed with the assessee. The ld. counsel has also referred page no. 207 to 209 as copies of statements of employees obtained during remand report by the assessing officer in which they have admitted that they have worked for the assessee as per assignment given by the assessee. In the light of the above facts and circumstances, we observe that neither the assessee has fully substantiated the claim of outstanding salary expenses with relevant evidences nor the assessing officer has fully disproved the claim of the assessee that she has not deployed any employee during the year under consideration. Considering the above facts, we are of the view that it will be reasonable to restrict the disallowance to the extent of 50% of the outstand....