The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the commission expenditure claimed by the assessee cannot be disallowed for the mere reason that the assessee could not furnish the confirmation letters from the recipients.
During the course of assessment proceedings, the Assessing Officer dismissed a claim of commission expenditure by holding that the assessee could not furnish the confirmations from the parties to the extent of Rs.42,53,300/-. The assessee, in support of the claim, submitted that the similar disallowance was deleted by this Tribunal in assessee’s own case for A.Ys. 2002-03 to 2007-08 and similarly, the Hon’ble Bombay High Court also confirmed the order of the Tribunal deleting the addition on account of commission expenditure in assessee’s own case.
While holding in favor of the assessee, Judicial Member Mr. Partha Sarathi Chaudhury and Accountant Member Mr. Inturi Rama Rao observed that the issue in the present appeal relates to the allowance of commission expenditure of Rs.42,53,300/-.
“Admittedly, the appellant had filed the primary details such as name, address, invoice, payment made, etc. However, the assessee could not furnish the confirmations from payees and for want of the confirmations, Assessing Officer made disallowance. The ld.CIT(A) following the decision of his order in the assessee’s own case in earlier years has deleted the addition. From the material on record, it is clear that the respondent/assessee had discharged the onus cast upon it by filing the primary details. Mere inability to furnish the confirmation letters from the recipients cannot be the reason to disallow the commission expenditure without causing any further inquiries by the Assessing Officer as to the genuineness or otherwise of the expenditure,” the Tribunal held.
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