JAYESH PHOOLSHANKAR PANDYA,MUMBAI vs. INCOME TAX OFFICER 32(2)(1) NOW INCOME TAX OFFICER 42(1)(2), BANDRA KURLA COMPLEX, BANDRA EAST, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.1836/Mum/2026 (Assessment year: 2013-14)

Jayesh Phoolshankar Pandya vs ITO Ward-32(2)(1), Mumbai Now 305, B-Wing, Shanti Park CHS Ward 42(1)(2) Ltd. Shivaji Road, Opp. Kautilya Bhavan, C-41-43, Avenue Matruchaya, Dahishar (E), 3, Near Videsh Bhavan, G Block, Mumbai-400068 Gilban Area, Bandra Kurla PAN:ALNPP0543M Complex, Bandra (E), Mumbai- 400051 APPELLANT RESPONDENT Assessee by : Shri Maish Trivedi Revenue by : Shri Pasale Naganath Bhimrao (Sr.DR)

Date of hearing : 19/05/2026 Date of pronouncement : 25/05/2026 O R D E R Per:Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the Ld. Commissioner of Income Tax-(Appeals) ADDL/JCIT(A)-1, Visakhapatnam [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for Assessment Year 2013-14, date of order 08.12.2025. The impugned order emanated from the order of the Ld. Income Tax

2 ITA No.1836/Mum/2026 Jayesh Phoolshankar Pandya Officer-32(2)(1), Mumbai (for brevity the ‘Ld. AO’) order passed under section 143(3) of the Act date of order 29.02.2016.

3 ITA No.1836/Mum/2026 Jayesh Phoolshankar Pandya impugned assessment order and appeal of the assessee was rejected. Being aggrieved assessee filed an appeal before us. 3. The Ld. AR filed a paper book comprising pages 1 to 237 which has been placed on record. The Ld. AR contended that the Ld. AO had issued the notice only to the debtors no such intermediaries or agents had received the notice from the Ld. Ld. AO. In support of his claim the Ld. AR submitted the letter of appointment to act as agent for marketing and sale of the product, Confirmation letter, bank statement as proof of transactions, bills, PAN of the intermediaries which are annexed in APB page 75 to 145. The Ld. AR further, invited our attention in APB page 73 to 74 where the “e-proceedings response acknowledgement” is annexed related to submission of evidence before the Ld. CIT(A). So, the assessee had submitted all the relevant documents in support of his claim and the commission are paid through banking channel and the TDS was duly deducted from the agent. 4. The Ld. DR argued and stands in favor of the orders of the revenue authorities. The Ld. DR contended that the Ld. AO had made a verification and issued notice u/sec. 133(6) of the Act to the debtors. On sample verification the four debtors denied about the presence of any intermediaries related to their transactions. The Ld. DR has drawn our attention in impugned appellate order para no.6.1 which is reproduced as below: “6.1 Ground no 1 - Disallowance of commission income of Rs 23,69,900/- 6.1.1 The appellant raised a ground that the AO erred in disallowing commission expenses to the tune of Rs 23,69,900/- The Appellant therefore prays that the disallowance of commission expenses to the tune of Rs 23,69,900 be deleted. During the appellate proceedings, the appellant has submitted that the sales person appointed by Jayesh Pandya being the proprietary

4 ITA No.1836/Mum/2026 Jayesh Phoolshankar Pandya concern and the commission is paid through account payee cheque after deduction of TDS to all the sales person appointed by Jayesh Pandya. The appellant also submitted the copy of appointment letter of sales agent. The appellant argued that disallowance of commission by the AO is purely on suspicion and without evidence. The appellant also relied on case laws of Hon'ble Tribunals and Courts in its support. 6.1.2 I have gone through the assessment order, grounds and submissions made by the appellant. During the year assessee has debited Rs.23.69,900/- as commission expenses. During the scrutiny proceedings, the AO asked the assessee to file details of parties to whom commission was paid during the year. The assessee was also asked to produce sample sale bills against which commission was paid. The assessee submitted the list of parties to whom commission was paid and sample sale bills were also submitted. Thereafter, AO issued notice u/s 133(6) was issued to parties mentioned in the sample bills specifically asking them as to whether any intermediary was involved for facilitating the transaction between them and the assessee. The AO received the reply of the parties through post and none of the parties have admitted the involvement of any intermediary for facilitating the transaction between them and the assessee. In view of the above, the AO held that there was no intermediary involved for facilitating the transaction between assessee and parties, so the commission expenses were disallowed and added back to the total income. The contention of appellant that AO made this addition based suspicion, is not acceptable because the AO disallowed the commission after making enquiry with the third parties. Further, Mere payment by account payee cheque is not sacrosanct nor can it make a non-genuine transaction genuine. The Reliance placed on judgment of Hon'ble High court of Calcutta in the case CIT v. Precision Finance Pvt. Ltd. [1994] 208 ITR 465. In view of the above, the action of AO was justified in making addition of Rs.23,69,900/- by disallowing commission expenses. Accordingly, the grounds raised by the appellant on this issue are 'dismissed'.” 5. We heard the rival submissions and considered the documents available on record. We find that the assessee had furnished complete documentary evidences in support of commission payments including appointment letters of agents, confirmations, PAN details, bills, bank statements and proof of deduction of TDS. The commission payments were made through proper banking channels and the revenue authorities have not brought any material on record to establish that the payments were bogus or had flown back to the assessee. It is further

5 ITA No.1836/Mum/2026 Jayesh Phoolshankar Pandya observed that the Ld. AO merely relied upon replies obtained from certain debtors under section 133(6) of the Act, wherein they denied involvement of intermediaries. However, no independent enquiry was conducted with the commission agents to disprove the evidences furnished by the assessee. Mere denial by customers cannot be the sole basis for disallowance of entire commission expenditure, particularly when the assessee had discharged the primary onus cast upon him. Considering the totality of facts and circumstances, we find that the disallowance made by the Ld. AO and sustained by the Ld. CIT(A) is not justified. Accordingly, the addition of Rs.23,69,900/- is hereby deleted and the grounds raised by the assessee stand allowed. 6. In the result, the appeal of the assessee bearing ITA No.1836/Mum/2026 is allowed. Order pronounced in the open court on 25th day of May 2026. Sd/- Sd/- (ARUN KHODPIA) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 25/05/2026 SAUMYASr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file.

6 ITA No.1836/Mum/2026 Jayesh Phoolshankar Pandya BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI