1980 (10) TMI 100

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....nce. The grievance projected in the appeal of the Revenue is that the AAC erred in deleting the disallowance of Rs. 20,000 made by the ITO on account of a provision in the commission account. The ITO while proceedings the assessment, found that the assessee had made a provision of Rs. 20,000 under the head 'commission account'. He, therefore, asked the assessee to explain this provision. According....

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....bout Rs. 4 lakhs made to this party a sum of about Rs. 1.50 lakh was due from that party on 31st March, 1976, the commission was not paid to the agent through whom the booking was done. It was pleaded that in the past also the appellant was making provision for commission payable and for the asst. yr. 1974-75 a provision of Rs. 5,000 was made and since the commission paid during the asst. yr. 1975....

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.... the relief has been wrongly allowed by the AAC because the assessee had made a lump sum provision and, therefore, it cannot be called an ascertained liability either contractual or statutory and as such could not be allowed. These submissions were, however, opposed by the ld., counsel for the assessee who submitted that the assessee had sold goods worth Rs. 3,95,966 to M/s. Prabal Trading Company....

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....ration to the rival submission and we are of the opinion that there is no case for an interference in the order of the AAC. It is not controverted by the sales to M/s. Prabal Trading Company, Bombay to the extent of Rs. 3,95,966 and these sales were effected through Sandeep Sales Corporation. M/s. Sandeep Sales Corporation are commission agents and as such entitled to commission on the sales effec....