BUHLER (INDIA) PRIVATE LIMITED,BANGALORE vs. DCIT, BANGALORE

ITA 434/BANG/2012Status: DisposedITAT Bangalore26 August 2015AY 2007-087 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the provision for commission of Rs. 1,14,00,000/- against the invoice from M/s. Platinum Corporation and the potential duplication of disallowance of Rs. 6,54,734/- require fresh verification by the AO. If the invoice is proven to be the basis for the provision, it should be considered an ascertained liability.

What were the facts?

The assessee claimed a provision for commission expenses, which was disallowed by the AO and confirmed by the CIT(A). The disallowance was primarily due to the bulk of the provision relating to one party, M/s. Platinum Corporation, and invoices pertaining to a subsequent assessment year.

What were the issues?

Whether the provision for commission is an ascertained liability based on the invoice, and whether there was a duplication of disallowance for prior period expenditure.

Which sections of the Income-tax Act were involved?

Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCH C, BANGALORE

Before: SHRI. N. V. VASUDEVAN & SHRI. ABRAHAM P. GEORGE

For Appellant: Shri. Chavali Narayan, CA

PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :

In this appeal filed by assessee it assails disallowance of commission expenditure of Rs.1,14,30,754/- made by the AO which was confirmed by the CIT (A).

02.

Facts apropos are that assessee engaged in manufacture and distribution of food processing machines had filed its return of income declaring income of Rs.15,31,55,764/-. During the course of assessment proceedings it was noted by ITA.434/Bang/2012 Page - 2

the AO that assessee had done a provisioning for commission of Rs.1,25,46,819/- payable to agents for procuring business. As per the AO assessee had actually in

The order continues below.

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