2025 (10) TMI 475

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....e has taken following grounds of appeal: "1. The Learned Commissioner of Income-tax (Appeals) [CIT(A)'] has erred in confirming disallowance of Commission expense of INR 25,41,797 on the ground that the same is not genuine in as much as the entire commission expense is incurred wholly and exclusively for the purpose of business and the same is genuine and all the details relating to payment of commission have been duly submitted which has not been appreciated by the Learned CIT(A). 2. The Learned CIT(A) has erred in confirming the disallowance of 8,60,923 under section 40(a)(ia) of the Act on the ground that the TDS is not deducted on Job work expenses of INR 28,64,747 (75,96,250 - 47,31,507) in as much as the company ....

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....d on commission. He observed that the brokers usually take their brokerage on every sales/transaction and that the payment of the commission for whole of the year on lump sum basis was not natural. He further observed that one party, namely, M/s.Varun Radiators Pvt.Ltd. did not confirm the receipt of the commission. He further observed that even the said M/s.Varun Radiators Pvt.Ltd. and another party M/s.Basant Industries did not file their ITRs for the relevant assessment year. He also observed that the practice of payment of commission by the assessee was not there in earlier assessment years. That the sales commission was introduced by the assessee for the first time. He further observed that even the commission income was not reflected ....

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....o the notice issued u/s. 133(6) of the Act was factually incorrect. That the said M/s.Varun Radiators Pvt.Ltd. had duly replied and confirmed the receipt of the commission from the assessee, which fact has been found mentioned in Para-4 of the Assessment Order. The Ld.Counsel has further submitted that it was duly explained to the lower authorities that as per the commission terms, the commission was paid on yearly sales made through the Commission Agent and that merely because the commission was not paid on each of the transaction, but on total sales made throughout the year cannot be a ground to disbelieve the commission payment. He has further submitted that the assessee has duly provided the bank statement highlighting the payments made....

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....f Rs. 75,96,250/- during the year. 5.1. The Ld. Counsel for the assessee, in this respect, has demonstrated that the aforesaid observation of the AO that the assessee has not deducted TDS on the payment of Rs. 28,64,747/- was factually incorrect. In fact, the AO failed to take note of the quarterly TDS returns filed by the assessee. That the Ld. AO has failed to take into consideration the job-work expenses related to the months of October to December-2020 and TDS deducted thereupon, therefore, erroneously made disallowance of Rs. 8,60,923/- @10% of the job-work expenses paid during the said period of Rs. 28,64,743/-. The Ld.Counsel has submitted that the Form 26AS of the party to whom the job-work expenses were paid, showed a total cred....