SMT VANDANA SAMEER MAJALI,BELGAVI vs. INCOME TAX OFFICER, WARD - 2(1), BELGAVI

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ITA 17/PAN/2022Status: DisposedITAT Panaji09 December 2022AY 2015-165 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while agreements are not mandatory for every expenditure, the genuineness and business purpose must be examined. Since the revenue did not controvert the fact that TDS was deducted on commission payments, the matter was remitted back to the Assessing Officer.

What were the facts?

The assessee, engaged in stock-in-trade and sub-brokerage, claimed commission expenditure. The Assessing Officer disallowed this expenditure doubting its genuineness due to lack of details and agreements, which was upheld by the CIT(A).

What were the issues?

The primary issue was the allowability of commission expenditure without specific agreements, and whether the genuineness of the expenditure was adequately established by the assessee.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI – VIRTUAL COURT

Before: SHRI INTURI RAMA RAO

For Appellant: Shri Akash Kumar
For Respondent: Shri N. Shrikanth
Hearing: 24.11.2022Pronounced: 09.12.2022

ORDER PER INTURI RAMA RAO, AM: These are the appeals filed by the assessee directed against the separate orders of ld. Commissioner of Income Tax (Appeals), Belgaum [‘the CIT(A)’] dated 26.06.2019 and 27.06.2019 for the assessment years 2013-14 to 2015-16 respectively. 2. Since the identical facts and common issues are involved in all the above captioned three appeals, we proceed to dispose of the same by this common order.

1.

2 to 17/PAN/2022 3. For the sake of convenience and clarity, the facts relevant to the appeal in ITA No.15/PAN/2022 for the assessment year 2013-14 are stated herein. ITA No.15/PAN/2022, A.Y. 2013-14 : 4. Briefly, the facts of the case are that the appellant is an individual engaged in the business of dealing in stock-in-trade and sub-brokerage. The Return of Income for the assessment year 2013-14 was filed on 29.09.2013 declaring total income of Rs.8,10,940/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-1(2), Belagavi (‘the Assessing Officer’) vide order dated 07.12.2018 passed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (‘the Act’) at total income of Rs.27,58,620/-. While doing so, the Assessing Officer made addition by disallowing the commission expenditure of Rs.1,68,275/- and Rs.17,33,286/- doubting the genuineness of expenditure as the assessee had failed to file the details such as nature of services provided to them and in the absence of any agreement.

5.

Being aggrieved by the above assessment order, an appeal was filed before the ld. CIT(A), who vide impugned order confirmed the 3 ITA Nos.15 to 17/PAN/2022 addition in the absence of any evidence in support of the services rendered by the commission agent.

6.

Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.

7.

It is contended before us that the commission was paid to various persons in connection with advice or opinion rendered for their clients and derivative trading. No expenditure can be disallowed on mere surmises, conjectures and presumptions and the tax was deducted at source on all such commission payments and expenditure should not have been disallowed.

8.

On the other hand, ld. Sr. DR submitted that in absence of any evidence on record indicating that the services are rendered by commission agent, therefore, no commission expenditure can be allowed as deduction.

9.

We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the allowability of commission expenditure. The Assessing Officer doubted the genuineness of the expenditure merely on the ground that the appellant had failed to prove the services rendered by the said commission recipients. Even on appeal

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