Groz Engineering Tools Pvt. Ltd.,, New ... vs Assessee on 14 October, 2014
However, the only thing required is that
there should be an arrangement under which payments have to be made.
Section 37(1) of the Income-tax Act, 1961 provides for allowability of the
expenditure incurred wholly and exclusively for purposes of the business.
The assessee has actually incurred this expenditure for the business
purposes, therefore, the CIT (A) was not justified in sustaining the
disallowance. Ld. AR also placed reliance on the order of ITAT,
Mumbai in the case of M/s. India Fashions Ltd vs. ITO in ITA
9 ITA Nos.637, 638 & 4373/Del/2013
No.5262/Mum/2011 dated 08.08.2014 for the proposition that non-
existence of written agreement cannot be sole basis for disallowance of
commission payment if other evidences prove the fact of incurring for
such expenditure wholly and exclusively. Proof/existence of a written
agreement between the assessee and the commission agent is not a
requirement for allowing the expenditure of the commission payment
made by the assessee.