GRAND CUISINES BANQUETS PRIVATE LIMITED,MUMBAI vs. DCIT, CIRCLE 7(1)(1), MUMBAI

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ITA 131/MUM/2026Status: DisposedITAT Mumbai19 August 2026AY 2021-226 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the disallowance was made primarily because the recipient did not respond to a notice under section 133(6). However, the Tribunal noted that the assessee had submitted various documents and that the entire matter needed to be re-examined by the Assessing Officer.

What were the facts?

The assessee claimed commission expenses of Rs. 15,17,611/-. The Assessing Officer disallowed this claim for lack of proof of identity, genuineness, and creditworthiness of the transaction, as the recipient party failed to provide confirmation. The CIT(A) confirmed this disallowance.

What were the issues?

Whether commission expenses are deductible when the recipient fails to provide confirmation despite the assessee providing other supporting documents and evidence of past allowances.

Which sections of the Income-tax Act were involved?

Section 37(1),Section 133(6),Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Before: HON’BLE JUSTICE (RETD.) C. V. BHADANG & SHRI PRABHASH SHANKAR

For Appellant: Shri Jayesh Dadia, CA
For Respondent: Shri Rajgopal Parthasarathi, (Sr. DR)
Hearing: 18.06.2026Pronounced: 19.08.2026

PER PRABHASH SHANKAR [A.M.] :- The present appeal emanating from the appellate order dated 15.12.2025 is preferred by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to the assessment order passed u/s. 143(3) r.w.s. 144B of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 19.12.2022 for the Assessment Year [A.Y.] 2021-22. P a g e | 2 A.Y. 2021-22 Grand Cuisines Banquets Private Limited 2. The grounds of appeal are as under:

1.

The Ld.CIT(A) has erred in law and on the facts of the case in confirming the action of the Assessing Officer in disallowing Rs. 15,17,611/- out of commission expenses. The action is unjustified and unwarranted.

2.

The Ld.CIT(A) has erred in law and on the facts of the case in not considering written submissions along with documents filed during the course of the appellate proceedings.

3.

Brief facts of the case are that the assessee company filed its return of income declaring total loss at Rs. 2,16,70,805/-. The assessee is engaged in the business of providing catering services through banquet halls. During assessment proceedings, the Assessing Officer noticed that it had debited commission expenses of Rs. 15,17,611/- payable to M/s Aakash Lavlesh Leisure Pvt. Ltd.(„ALLPL‟) in respect of use of Club Millennium premises at Juhu, Mumbai. Despite several opportunities,the assessee failed to provide confirmation from the recipient party, bank payment evidence or other corroborative documents to establish genuineness beyond the agreement copy and ledger. The AO accordingly disallowed the claim u/s 37(1) for want of proof of identity, genuineness and creditworthiness of the transaction, recomputing total loss at Rs. 2,01,53,194/-.

4.

Before the ld.CIT(A), the assessee contested the said addition claiming that it had been providing catering services at Club

P a g e | 3 A.Y. 2021-22 Grand Cuisines Banquets Private Limited Millennium, owned by M/s Aakash Lavlesh Leisure Pvt. Ltd., since 2007, pursuant to a long-standing agreement stipulating commission at a fixed percentage of revenue and that similar claims had been allowed from AY 2008-09 onwards. It submitted that copies of the agreement, ledger account, TDS compliance u/s 194H, and details of prior years‟ allowances were furnished during assessment proceedings, while explaining that the amount was credited to the recipient‟s ledger due to mutual adjustments rather than cash payment, given strained business relations that led to their non-cooperation despite repeated requests. The assessee further maintained that the Assessing Officer accepted the business nexus and quantum of commission but erroneously disallowed the claim solely based on the recipient‟s non-response to notice u/s 133(6), thereby ignoring the primary evidences provided and the consistency with past assessments, particularly since the proposed addition of Rs. 38,83,248/- pertaining to the prior period was deleted in the final order itself.

4.

1 The ld.CIT(A) observed that section 37(1) of the Act permits deduction of expenditure laid out or expended wholly and exclusively for purposes of business. The assessee bears the primary onus to prove through cogent evidence: (i) identity of the payee; (ii) genuineness of the transaction; and (iii) its business expediency, particularly where

P a g e | 4 A.Y. 2021-22 Grand Cuisines Banquets Private Limited statutory verification opportunities are provided under sections 142(1) and 133(6). Under section 37(1), mere book entries, agreements or TDS certificates do not constitute conclusive proof of genuineness. The assessee must furnish primary evidence including bank payment corroboration, recipient confirmation, and invoices/bills when demanded. Non-production despite repeated opportunities and recipient non-response to statutory notice u/s 133(6) renders the claim vulnerable to disallowance.For allowability under section 37(1), the assessee must demonstrate: (i) actual payment through banking channels or verifiable mode; (ii) recipient‟s independent confirmation of transaction; (iii) supporting documents like invoices/bills beyond ledger entries; and (iv) complete discharge of evidentiary burden despite adequate opportunities. Failure on material particulars justifies rejection of the claim. The assessee claimed Rs. 15,17,611/- as commission payable to ALLVPL for use of Club Millennium premises pursuant to 2007 agreement. Despite extensive opportunities relevant details were submitted to the AO.The assessee failed to establish the genuineness of Rs. 15,17,611/- commission expenditure under section 37(1) of the Act which was held to be justified.

5.

Before us, the ld.AR filed certain documents in pursuance to the directions of the Bench by way of Paper book dated 17.06.2026

P a g e | 5 A.Y. 2021-22 Grand Cuisines Banquets Private Limited i.e.consolidated ledger summary of Aakash from 2021-22 to 22-23, copy of agreement,copy of letter informing termination of agreement, legal notice,copies of Balance sheets , profit and loss account as also copies of acknowledgments with computation of income for AYs 2023 to 2025.It appears that the disallowance was made by the AO and confirmed by the ld.CIT(A) only on the ground that the said party did not comply with the notice u/s 133(6) of the Act and thus did not confirm the claim of the assessee regarding commission payment.However,on perusal of the records as also the details submitted before the Bench,the AO was not justified in disallowing the said expenses in toto.In our considered view, the entire matter needs a revisit by the AO to examine the issue afresh and pass de novo assessment order. Needless to state he would allow necessary hearing to the assessee to substantiate its contentions. Therefore,we set aside the orders of the authorities below and all the grounds for statistical purposes.

6.

In the result,the appeal is allowed for statistical purposes. Order pronounced in the open court on 19/08/2026. [Justice (Retd.) C. V. BHADANG] [PRABHASH SHANKAR] PRESIDENT ACCOUNTANT MEMBER

P a g e | 6 A.Y. 2021-22 Grand Cuisines Banquets Private Limited Place: म ुंबई/Mumbai ददनाुंक /Date 19.08.2026 Lubhna Shaikh / Steno

आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //// आदेशानुसार/ BY ORDER,

उि/सहायक िंजीकार (Dy./Asstt.

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