Case Law Details
Shri Kapil Jhalani Vs Jt.CIT (ITAT Delhi)
The observations of the ld. CIT (Appeals) that there was no onus upon the Assessing Officer to issue notice to the concerned parties is also de void of any legal backing. When the address of the parties is before the Assessing Officer and it is not the case that the parties are bogus, the Assessing Officer cannot insist that assessee should produce these parties and otherwise Assessing Officer shall take adverse inference. The emphasis of the Revenue authorities in providing e-mail and correspondence is also un-called for. As per the rate of commission noted it is very small amount and by no stretch of imagination can be said to be exorbitant. In our considered opinion when the commission paid is of a normal amount, the names and address of the parties have been duly mentioned, the persons who have appeared have also acknowledged the receipt of commission, then the disallowance is solely based upon surmises and conjectures.
No law provides that commission expense will be allowed only if there is written agreement.
The insistence of the Assessing Officer for the assessee to produce the party is also un-called for. No case has been made that the percentage of expenditure does not compare well with earlier years which the Revenue has accepted. Hence, in our considered opinion, this disallowance is based on surmise and conjecture and hence not sustainable in law. We have no hesitation in setting aside the order of ld. CIT (Appeals), which holds that acceptance by Revenue of similar commission in previous years has no relevance and that there is no onus of Assessing Officer to issue summons to the parties, if he is not satisfied or that there has to be a written agreement. This is coupled with the fact that the rate of commission is normal and there is no case of lack of deduction of TDS. Hence we set aside the order of Revenue authorities to decide the issue in favour of assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
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