Friday, 16 January 2015

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Commission)

IT: In absence of any supporting evidence, regarding rendering of services by agent for import of bullion by assessee, payment of commission could not be allowed
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[2015] 53 taxmann.com 29 (Bombay)
HIGH COURT OF BOMBAY
Sureshkumar G. Hundia
v.
Assistant Commissioner of Income-tax, Central Circle-14*
S. C. DHARMADHIKARI AND A.K. MENON, JJ.
IT APPEAL NO. 832 OF 2012
SEPTEMBER  12, 2014
Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of (Commission) - Assessment year 2004-2005 - Assessee, who was in a business of import and export of bullion, claimed deduction of commission paid to HBL on ground that services of director of HBL were utilised for purchasing bullion - However, on enquiries made by Tribunal, assessee stated that no such commission was paid in earlier or later year to HBL and assessee could have procured bullion without assistance of any agent - In order to satisfy itself about services rendered by HBL, Tribunal required presence of director of HBL but assessee could not produce him - There being no supporting evidence concerning services rendered by HBL, Tribunal disallowed commission - Whether finding of fact recorded by Tribunal could not be held to be perverse or vitiated by any error of law apparent on face of record and, therefore, could not be interfered with - Held, yes [Paras 5 & 6][In favour of revenue]

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