KODIYIL MUHAMMED MADANI PARTNER, ABC SALES CORPORATION,TALIPARAMBA vs. ACIT, CENTRAL CIRCLE-1, KOZHIKODE
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?
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Cases cited in this judgment(12)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- National Thermal Power Co. Ltd. v. CIT5,834 citing229 ITR 383 · 1998 · SC
- Additionally, in CIT v. A. Raman & Co.321 citing67 ITR 11 · 1968 · SC
- DCIT v. Sunil Kumar Sharma269 citing159 Taxmann.com 179 · 2024 · HC
- CIT v. Calcutta Discount Co. Ltd.236 citing91 ITR 8 · 1973 · SC · Read judgment
- Shri Kailashben Manharlal Chokshi v. CIT225 citing174 Taxmann 466 · 2008 · HC
- CIT v. Indo Nippon Chemicals Co. Ltd.204 citing261 ITR 275 · 2003 · SC
- CIT v. O. Abdul Razzak121 citing20 Taxmann.com 48 · 2012 · HC
- Revenue in CIT v. Sunil Kumar Sharma118 citing165 Taxmann.com 846 · 2024 · SC
- Tata Chemicals Ltd. v. CIT86 citing256 ITR 395 · 2002 · HC
- PCIT v. Umesh Israni64 citing67 Taxmann.com 372 · 2016 · HC
- CIT v. Veerdip Rollers (P.) Ltd.63 citing323 ITR 341 · 2010 · HC
- PCIT v. APCO Motor (India) Pvt Ltd.57 citing65 Taxmann.com 12
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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