Case Law Details
Chandresh P. Thakker Vs National Faceless Assessment Centre (ITAT Mumbai)
The assessee, engaged in arranging finance, received commission income and incurred commission expenditure, as well as franking charges. The AO disallowed the commission expenditure and franking charges, stating that the assessee failed to prove the services rendered by the commission agents or the purpose of the franking charges. The CIT(A) upheld the AO’s decision. However, the AR argued that the assessee provided details of the commission agents and their payments, demonstrating that the commissions were for customer referrals resulting in income. The ITAT found that the details provided were adequate and directed the AO to verify if the commission agents had declared the income and if services were rendered. The franking charges issue was upheld as the assessee failed to provide sufficient evidence. The ITAT restored the commission payment issue to the AO for verification, directing the assessee to provide relevant evidence.
Detailed Analysis:
1. Background: The assessee, engaged in arranging finance, claimed commission expenses and franking charges. The Assessing Officer (AO) disallowed these expenses, citing lack of evidence on services rendered.
2. Assessee’s Argument: The assessee contended that commission was paid to parties referring customers, constituting a legitimate business expense. The AO, however, found the evidence insufficient.
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