Case Law Details
Dhandhia Gems Vs ITO (ITAT Kolkata)
The issue under consideration is whether the addition made by AO by considering the transaction entered by the assessee as bogus transactions are justified in law?
ITAT states that in the present case there is a binding contract between the parities by which the recipients of the commission had the right to enforce realization of commission stipulated between the parties. Also they find from the communication between the parties that the payment was duly received by the parties and paid by the assessee by account payee cheques. The revenue has not alleged that the parties to the transactions are related to each other or that the payments are not genuine or that the payments having been made by the assessee to the recipients have found their way back to the assessee some way or the other. Such being the case, ITAT find that the authorities below were not justified in rejecting the claim of the assessee for payment of commission. Since all the ingredients necessary for genuine business transaction exist in this case ITAT do not find any merit in the addition made by the AO. In reversing their orders, and respectfully following the decision of the Hon ‘ble Calcutta High Court in the case of Masther& Plant [India) Ltd., (supra) ITAT allow the appeal of the assessee.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal preferred by the assessee against the order of Ld. CIT(A), 11, Kolkata dated 18-04-2019 for the assessment year 2015-16.
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