Assessing Officer cannot interfere with the Business Decisions of Assessee: ITAT [Read Order]

Assessing Officer - Business Decisions - Assessee - ITAT - Taxscan

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has held that the Assessing Officer cannot interfere with the business decisions of the assessee.

The assessee is a private limited company and engaged in the business of manufacturing Glazed Ceramics Tiles. The assessee in the year under consideration has claimed commission expenses amounting to Rs. 6,61,569/- only. The assessee in support of such commission expenses has filed copy of accounts of the parties along with the copies of the income-tax return. However, the AO found that the assessee failed to furnish the details of the services rendered by such commission agents. Therefore, the AO disallowed the same and added to the total income of the assessee.

The Tribunal bench comprising Shri Waseem Ahmed, Accountant Member and Ms. Suchitra Kamble, Judicial Member observed that there is no ambiguity in the fact that the AO is not expected to interfere in the decision making process of the assessee.

“In the business environment, there are certain decision which are taken by the assessee depending upon the market forces. However, the primary onus lies upon the assessee at least to justify based on the documentary evidence that the business decision were taken in the course of the business as mandated under the provision of section 37 of the Act. But in the given case we note that the Ld. AR has just tried to justify the genuineness of the expenses which has been not doubted by the authorities below. What has been doubted, were the services which were rendered by the consultantsas discussed above. To this effect no satisfactory explanation was furnished by the Ld. AR for the assessee before us. Therefore, we do not find any ambiguity in the order of the authorities below,” the Tribunal observed.

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Akik Tiles Pvt. Ltd vs J.C.I.T

Counsel for Appellant:   Shri Parimalsinh B. Parmar

Counsel for Respondent:   Shri S.S. Shukla


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