KODIYIL MUHAMMED MADANI(PARTNER ABC SALES CORPORATION).,TALIPARAMBA vs. ACIT, CENTRAL CIRCLE-1, CALICUT

ITA 529/COCH/2024Status: DisposedITAT Cochin20 December 2024AY 2019-20Bench: SHRI WASEEM AHMED (Accountant Member), SHRI SOUNDARARAJAN K (Judicial Member)165 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the disallowance of commission expenses. It found that the routing of funds through employees to directors, despite TDS and reporting, indicated a potential arrangement to conceal the true nature of payments and was not a genuine business expenditure.

What were the facts?

The assessee claimed commission expenses paid to employees, which were routed through them to directors. The Revenue disallowed these expenses, viewing it as a tax-saving arrangement. The assessee argued the commissions were for services rendered, TDS was deducted, and recipients reported income.

What were the issues?

Whether commission expenses routed through employees to directors are genuine business expenditures. Whether the use of Section 44AD by employees impacts the genuineness of the commission payments.

Which sections of the Income-tax Act were involved?

Section 44AD,Section 147

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Cases cited in this judgment(12)Show list

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IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH : BY VIRTUAL HEARING BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K, JUDICIAL MEMBER

SN Assessee Revenue ITA No. Asst. Year 1 ABC Sales Corporation ITO, Circle-1, 404/COCH/2024 2017-18 Kannur (Payyannur) ACIT, Central 2 ABC Sales Corporation 440/COCH/2024 2017-18 Circle, (Taliparamba) Kozhikode 3 ABC Sales Corporation -do- 441/COCH/2024 2017-18 (Payyannur) 4 ABC Sales Corporation -do- 2018-19 (Payyannur) 449/COCH/2024 5 ABC Sales Corporation -do- 2017-18 (Kanhangad) 439/COCH/2024 6 ABC Sales Corporation -do- 2018-19 (Taliparamba) 450/COCH/2024 7 ABC Sales Corporation -do- 2018-19 (Kanhangad) 451/COCH/2024 8 ABC Sales Corporation -do- 2019-20 (Payyannur) 457/COCH/2024 9 ABC Sales Corporation -do- 2019-20 (Taliparamba) 458/COCH/2024 10 ABC Sales Corporation -do- 2019-20 (Kanhangad) 459/COCH/2024 11 ABC Sales Corporation -do- 2020-21 (Payyannur) 534/COCH/2024 12 ABC Sales Corporation -do- 2020-21 (Taliparamba) 535/COCH/2024 13 ABC Sales Corporation -do- 2020-21 (Kanhangad) 536/COCH/2024 14 ABC Sales Corporation -do- 2017-18 (Kanhangad) 578/COCH/2024 15 ABC Buildwares India (P) Ltd -do- 2015-16 53

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