Princy Bhat Vs ITO (Delhi ITAT)
Commission Expense Cannot Be Disallowed Without Verification – ITAT Restores Matter Where PAN, ITR, Addresses & Confirmations of Agents Were Furnished but Not Properly Examined
Summary: The Delhi ITAT dealt with disallowance of commission expenditure where the assessee contended that substantial documentary details regarding the commission agents had been furnished, but the AO did not undertake verification from the concerned parties. The difficulty was compounded at the appellate stage when the CIT(A) refused to admit additional evidence subsequently collected by the assessee. Finding that neither stage had resulted in proper verification of the evidence, the Tribunal restored the matter to the AO for a de novo assessment after granting adequate opportunity to the assessee.
Facts & controversy
The assessee challenged the disallowance of commission expenses on the ground that the relevant expenditure had actually been incurred for business purposes & sufficient particulars regarding the recipients had been furnished.
According to the assessee, she had collected ITRs & confirmations from the commission agents to substantiate the expenditure. However, because sufficient time was allegedly not available during assessment, she could not obtain all confirmations within the stipulated period & the entire expenditure came to be disallowed.
