COMMISSIONER OF INCOME TAX Vs. MODI STONE LTD

JUDGEMENT

(1.) For the assessment year 1995-96, the Respondent/Assessee claimed commission payment of Rs4,70,04,000/- as deduction under the head 'commission/discount'. No details of the alleged payments were furnished to the Assessing Officer, who therefore, disallowed the entire amount. It was noted by the Assessing Officer that in the Assessment Year 1993-94, the Assessing Officer had disallowed such payments to the extent of Rs. 1,61,35839/-. In an appeal filed by the Assessee, the Commissioner of Income Tax (Appeals) noted that details of the commission paid along with necessary evidence were not furnished during assessment proceedings in spite of specific opportunity given by the Assessing Officer. He was of the view that since it was the Assessee who had claimed this expenditure, the onus was on him to prove it and that he had failed to discharge that onus. He, therefore, maintained disallowance to the extent of commission payment of Rs. 23,22,250/- and Rs. 1,73,457/-, but, in view of the past record and nature of the commission, export commission of Rs. 19,20,478/- and the early retirement discount to the extent of Rs. 4,25,87,555/- was allowed, thereby restricting the disallowance to Rs. 24,95,707/-.

(2.) For the assessment year 1996-97, Assessee claimed an amount of Rs. 5,68,62,553/- under the head 'discount/commission' in its profit & loss account. In view of the failure of the Assessee to furnish any details, the aforesaid amount was disallowed by the Assessing Officer. Following the order passed in the assessment year 1995-96, the CIT(A) directed the Assessing Officer to disallow the amount of Rs. 69,34,824/- and allow the balance amount of Rs. 4,99,27,729/-. The appeal filed by the Revenue was dismissed by the Tribunal.

(3.) For the assessment year 1997-98, the Assessee/Respondent claimed a sum of Rs. 3,25,04557/- under the head 'commission/discount' out of which a sum of Rs. 5,71,429/- was later offered by it for tax on the ground that the same was reversed in assessment year 1998-99. The balance amount was disallowed by the Assessing Officer finding that the Assessee had not furnished any details regarding commission and discount payment. However, in the appeal filed by the Assessee, CIT (A) following his order for the assessment year 1995-96, reduced the addition to Rs. 38,10,251/-. In the appeal filed by the Revenue, the Tribunal noted that the expenditure claimed by the Plaintiff comprised export commission of Rs. 12,70,409/-, which was deleted for the assessment year 1995-96. Rs. 13,88,334/- towards District Officer Commission which was allowed for the assessment year 1995-96 and brokerage on TELCO bills amounting to Rs. 94,987/- and in view of these details and past history of the case, the appeal filed by the Revenue was dismissed.