DCIT 10(2), MUMBAI vs. LAXMI BOARD & PAPER MILLS LTD, MUMBAI

PER MAHAVIR SINGH, JM:

“1. On the facts and in the circumstances of the case as well as in law, the Ld. CIT (A)erred in deleting addition of Rs.54,90,364/- representing commission paid admitting additional evidenced without confronting the same with the AO in violation of Rule 46A of the Income Tax Rules, 1962.” 3. We have heard the learned Sr. DR and gone through the facts and circumstances of the case. Briefly stated facts are that the assessee is engaged in M. G. / M. F. Kraft Paper, Kraft Liner White & Kraft Board. During the assessment proceedings, on verification of profit & loss account, the AO noticed that the assessee has paid commission of Rs.2,07,14,282/- on sale of on sale of 108,94,79,533/- paid to 28 agents. The assessee filed a list of agents. The AO required the assessee to prove the payment of commission and services rendered by these commission agents. The assessee claimed that in earlier year i.e. assessment year 2009-10, the company has paid commission and the same was deleted by the CIT (A). But the AO, in the absence of substantive documentary evidences of rendering of services noted that it is not proved that services have been rendered wholly and exclusively for the business purpose. Accordingly, he deleted the part of the commission paid to the agents amounting to Rs.54,90,360/-. Aggrieved, the assessee preferred an appeal before the CIT (A). The assessee before the CIT (A) filed fresh evidences in the shape of confirmation from these agents including their Permanent Account Number, Income Tax details, amount shown in the profit & loss account, ledger account, bank statement, Form No.16A and commission payment .The CIT (A) without referring these evidences to the AO, deleted the disallowance of commission payment. Aggrieved, now the Revenue is in second appeal before the Tribunal.