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Trademark Registration Flow Chart

By CA Satbir Singh | June 13, 2016

Trademark Registration Flow Chart

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Category: Notifications Tags: Trademark

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IMPORTANT INCOME TAX CASE LAWS 28.10.25
Penalty for Misreporting Deleted as Leave Encashment Claim Was Bona Fide.
Existing 12AA Registration is a Valid Basis for Granting 80G Approval.
Clerical Error in 80G Form Cannot Deny Trust’s Entitlement to Full Registration.
Denial of Requested Video Conference Hearing Vitiates Assessment Order.
Section 43B Disallowance Invalid if Tax Was Never Claimed as an Expense.
Disallowance of Commission is Unjustified When Linked to Substantial Growth in Sales and Profits.
Dhinal Shah, AR for the Appellant. Veerabadram Vislavath, Sr. DR for the Respondent. ORDER Sanjay Garg, Judicial Member.- The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 02/12/2024 for Assessment Year (AY) 2021-22. 2. The assessee has taken following grounds of appeal: “1. The Learned Commissioner of Income-tax (Appeals) [CIT(A)’] has erred in confirming disallowance of Commission expense of INR 25,41,797 on the ground that the same is not genuine in as much as the entire commission expense is incurred wholly and exclusively for the purpose of business and the same is genuine and all the details relating to payment of commission have been duly submitted which has not been appreciated by the Learned CIT(A). 2. The Learned CIT(A) has erred in confirming the disallowance of 8,60,923 under section 40(a)(ia) of the Act on the ground that the TDS is not deducted on Job work expenses of INR 28,64,747 (75,96,250 – 47,31,507) in as much as the company has duly deducted the TDS under applicable provisions on the amounts which are required to be deductible and therefore the disallowance is bad in law. The Appellant craves leave to add, alter, amend or withdraw any of the above grounds at or before the hearing of the appeal. All the grounds of appeal stated above are without prejudice to each other.” 3. Ground No.1: Vide Ground No.1, the assessee has agitated against the confirmation of addition of Rs. 25,41,797/- on account of disallowance of commission paid. The Assessing Officer (AO), during the assessment proceedings, noticed that the assessee during the year had paid commission to four parties amounting to Rs.37,49,260/- on which TDS amounting to Rs.1,40,597/- was deducted. On being asked to explain as to why the commission was paid and to establish the genuineness of the transaction, the assessee furnished the necessary details and submitted that the commission was paid to the aforesaid parties on the sales made through the aforesaid parties. To verify the commission paid, the AO called for the confirmations by issuing notices u/ s.133(6) of the Income Tax Act, 1961 (in short “the Act”) to the parties out of which one party, namely, M/ s.Varun Radiators Pvt.Ltd. did not reply. The AO taking into consideration the explanation furnished by the assessee observed that in this case the commission payments were verbally decided on total quantitative sales during the year and, hence, single bill was raised on commission. He observed that the brokers usually take their brokerage on every sales/transaction and that the payment of the commission for whole of the year on lump sum basis was not natural. He further observed that one party, namely, M/ s.Varun Radiators Pvt.Ltd. did not confirm the receipt of the commission. He further observed that even the said M/ s.Varun Radiators Pvt.Ltd. and another party M/ s.Basant Industries did not file their ITRs for the relevant assessment year. He also observed that the practice of payment of commission by the assessee was not there in earlier assessment years. That the sales commission was introduced by the assessee for the first time. He further observed that even the commission income was not reflected in the ITRs of the Commission Agents. He also observed that even the confirmations, ledger extracts, bank entries or copy of ITR as supporting documents of the commission agents have not been provided by the assessee or commission agents. The AO, therefore, disallowed the commission expenses of Rs.25,41,797/- observing that the commission expenses claimed to that extent remained unverifiable and further that the assessee had failed to prove that the same were incidental to the business and genuine expenditure. 3.1. The Ld.CIT(A) confirmed the addition so made by the AO. 4. We have heard the rival contentions of the Ld.Representatives of the parties and gone through the record. The Ld. Counsel for the assessee has submitted that the assessee had made genuine commission payments, whereupon, the TDS was deducted. That the commission payment was made through banking channel. He has further submitted that the aforesaid commission payment has resulted into increase of business/ sales turnover of the assessee. He has submitted that the sales turnover of the assessee for the preceding assessment year was at Rs. 30.09crores, which during the year has increased to Rs. 71.91crores. Further, that the last year profits of the assessee were at Rs.18.95crores, which during the year had increased to Rs.45.47crores. He, further bringing our attention to page No.4 of the assessment order, has submitted that the observation of the AO that M/ s.Varun Radiators Pvt.Ltd. had not responded to the notice issued u/ s.133(6) of the Act was factually incorrect. That the said M/ s.Varun Radiators Pvt.Ltd. had duly replied and confirmed the receipt of the commission from the assessee, which fact has been found mentioned in Para-4 of the Assessment Order. The Ld.Counsel has further submitted that it was duly explained to the lower authorities that as per the commission terms, the commission was paid on yearly sales made through the Commission Agent and that merely because the commission was not paid on each of the transaction, but on total sales made throughout the year cannot be a ground to disbelieve the commission payment. He has further submitted that the assessee has duly provided the bank statement highlighting the payments made to the commission agents. He has submitted that all the necessary supporting documents including bank statements of payment, invoices of the commission, ledger of all parties to whom the commission has been paid was duly provided. That the observation of the AO that the assessee has not provided the supporting documents was factually incorrect. He has further submitted that even M/s.Varun Radiators Pvt.Ltd. had filed its return of income later on, the copy of which was also supplied during the appellate proceedings. The Ld.DR could not rebut the aforesaid evidences furnished by the assessee. In view of this, we do not find justification on the part of the AO in making the disallowance of commission payment especially when the assessee has duly demonstrated that the sale of the assessee has increased to more than double as compared to the last year sales and even the profits of the assessee have also increased @100% as compared to the last year. Further, the assessee has duly furnished the details and evidences to prove the payment of commission which has also been confirmed by the recipients. In view of the above discussion, the impugned addition made by the AO is not sustainable and the same is hereby ordered to be deleted. 5. Ground No.2: Vide Ground No2, the assessee has agitated against the confirmation of disallowance of Rs.8,60,923/- u/s.40(1)(ia) of the Act on account of non-deduction of TDS on job-work expenses of Rs.28,64,747/ – out of the total expenses paid of Rs.75,96,250/ – during the year. 5.1. The Ld. Counsel for the assessee, in this respect, has demonstrated that the aforesaid observation of the AO that the assessee has not deducted TDS on the payment of Rs.28,64,747/- was factually incorrect. In fact, the AO failed to take note of the quarterly TDS returns filed by the assessee. That the Ld. AO has failed to take into consideration the job-work expenses related to the months of October to December-2020 and TDS deducted thereupon, therefore, erroneously made disallowance of Rs.8,60,923/- @10% of the jobwork expenses paid during the said period of Rs.28,64,743/-. The Ld.Counsel has submitted that the Form 26AS of the party to whom the job-work expenses were paid, showed a total credit of Rs.76,25,108/- and TDS of Rs.1,14,519/- was deducted on the same which included the job-work expenses of Rs.75,96,250/-. The assessee also furnished the Form 16A and Form 26AS of the vendor showing of total amount on which TDS deduction was made during the year. The Ld.Counsel, therefore, has submitted that there was no mismatch regarding the deduction of TDS as alleged by the AO. The Ld.DR could not rebut the aforesaid factual aspect. In view of this, the impugned addition on account of non deduction of TDS is not sustainable and the same is hereby ordered to be deleted. 6. In the result, the appeal of the assessee stands allowed.Dhinal Shah, AR for the Appellant. Veerabadram Vislavath, Sr. DR for the Respondent. ORDER Sanjay Garg, Judicial Member.- The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 02/12/2024 for Assessment Year (AY) 2021-22. 2. The assessee has taken following grounds of appeal: “1. The Learned Commissioner of Income-tax (Appeals) [CIT(A)’] has erred in confirming disallowance of Commission expense of INR 25,41,797 on the ground that the same is not genuine in as much as the entire commission expense is incurred wholly and exclusively for the purpose of business and the same is genuine and all the details relating to payment of commission have been duly submitted which has not been appreciated by the Learned CIT(A). 2. The Learned CIT(A) has erred in confirming the disallowance of 8,60,923 under section 40(a)(ia) of the Act on the ground that the TDS is not deducted on Job work expenses of INR 28,64,747 (75,96,250 – 47,31,507) in as much as the company has duly deducted the TDS under applicable provisions on the amounts which are required to be deductible and therefore the disallowance is bad in law. The Appellant craves leave to add, alter, amend or withdraw any of the above grounds at or before the hearing of the appeal. All the grounds of appeal stated above are without prejudice to each other.” 3. Ground No.1: Vide Ground No.1, the assessee has agitated against the confirmation of addition of Rs. 25,41,797/- on account of disallowance of commission paid. The Assessing Officer (AO), during the assessment proceedings, noticed that the assessee during the year had paid commission to four parties amounting to Rs.37,49,260/- on which TDS amounting to Rs.1,40,597/- was deducted. On being asked to explain as to why the commission was paid and to establish the genuineness of the transaction, the assessee furnished the necessary details and submitted that the commission was paid to the aforesaid parties on the sales made through the aforesaid parties. To verify the commission paid, the AO called for the confirmations by issuing notices u/ s.133(6) of the Income Tax Act, 1961 (in short “the Act”) to the parties out of which one party, namely, M/ s.Varun Radiators Pvt.Ltd. did not reply. The AO taking into consideration the explanation furnished by the assessee observed that in this case the commission payments were verbally decided on total quantitative sales during the year and, hence, single bill was raised on commission. He observed that the brokers usually take their brokerage on every sales/transaction and that the payment of the commission for whole of the year on lump sum basis was not natural. He further observed that one party, namely, M/ s.Varun Radiators Pvt.Ltd. did not confirm the receipt of the commission. He further observed that even the said M/ s.Varun Radiators Pvt.Ltd. and another party M/ s.Basant Industries did not file their ITRs for the relevant assessment year. He also observed that the practice of payment of commission by the assessee was not there in earlier assessment years. That the sales commission was introduced by the assessee for the first time. He further observed that even the commission income was not reflected in the ITRs of the Commission Agents. He also observed that even the confirmations, ledger extracts, bank entries or copy of ITR as supporting documents of the commission agents have not been provided by the assessee or commission agents. The AO, therefore, disallowed the commission expenses of Rs.25,41,797/- observing that the commission expenses claimed to that extent remained unverifiable and further that the assessee had failed to prove that the same were incidental to the business and genuine expenditure. 3.1. The Ld.CIT(A) confirmed the addition so made by the AO. 4. We have heard the rival contentions of the Ld.Representatives of the parties and gone through the record. The Ld. Counsel for the assessee has submitted that the assessee had made genuine commission payments, whereupon, the TDS was deducted. That the commission payment was made through banking channel. He has further submitted that the aforesaid commission payment has resulted into increase of business/ sales turnover of the assessee. He has submitted that the sales turnover of the assessee for the preceding assessment year was at Rs. 30.09crores, which during the year has increased to Rs. 71.91crores. Further, that the last year profits of the assessee were at Rs.18.95crores, which during the year had increased to Rs.45.47crores. He, further bringing our attention to page No.4 of the assessment order, has submitted that the observation of the AO that M/ s.Varun Radiators Pvt.Ltd. had not responded to the notice issued u/ s.133(6) of the Act was factually incorrect. That the said M/ s.Varun Radiators Pvt.Ltd. had duly replied and confirmed the receipt of the commission from the assessee, which fact has been found mentioned in Para-4 of the Assessment Order. The Ld.Counsel has further submitted that it was duly explained to the lower authorities that as per the commission terms, the commission was paid on yearly sales made through the Commission Agent and that merely because the commission was not paid on each of the transaction, but on total sales made throughout the year cannot be a ground to disbelieve the commission payment. He has further submitted that the assessee has duly provided the bank statement highlighting the payments made to the commission agents. He has submitted that all the necessary supporting documents including bank statements of payment, invoices of the commission, ledger of all parties to whom the commission has been paid was duly provided. That the observation of the AO that the assessee has not provided the supporting documents was factually incorrect. He has further submitted that even M/s.Varun Radiators Pvt.Ltd. had filed its return of income later on, the copy of which was also supplied during the appellate proceedings. The Ld.DR could not rebut the aforesaid evidences furnished by the assessee. In view of this, we do not find justification on the part of the AO in making the disallowance of commission payment especially when the assessee has duly demonstrated that the sale of the assessee has increased to more than double as compared to the last year sales and even the profits of the assessee have also increased @100% as compared to the last year. Further, the assessee has duly furnished the details and evidences to prove the payment of commission which has also been confirmed by the recipients. In view of the above discussion, the impugned addition made by the AO is not sustainable and the same is hereby ordered to be deleted. 5. Ground No.2: Vide Ground No2, the assessee has agitated against the confirmation of disallowance of Rs.8,60,923/- u/s.40(1)(ia) of the Act on account of non-deduction of TDS on job-work expenses of Rs.28,64,747/ – out of the total expenses paid of Rs.75,96,250/ – during the year. 5.1. The Ld. Counsel for the assessee, in this respect, has demonstrated that the aforesaid observation of the AO that the assessee has not deducted TDS on the payment of Rs.28,64,747/- was factually incorrect. In fact, the AO failed to take note of the quarterly TDS returns filed by the assessee. That the Ld. AO has failed to take into consideration the job-work expenses related to the months of October to December-2020 and TDS deducted thereupon, therefore, erroneously made disallowance of Rs.8,60,923/- @10% of the jobwork expenses paid during the said period of Rs.28,64,743/-. The Ld.Counsel has submitted that the Form 26AS of the party to whom the job-work expenses were paid, showed a total credit of Rs.76,25,108/- and TDS of Rs.1,14,519/- was deducted on the same which included the job-work expenses of Rs.75,96,250/-. The assessee also furnished the Form 16A and Form 26AS of the vendor showing of total amount on which TDS deduction was made during the year. The Ld.Counsel, therefore, has submitted that there was no mismatch regarding the deduction of TDS as alleged by the AO. The Ld.DR could not rebut the aforesaid factual aspect. In view of this, the impugned addition on account of non deduction of TDS is not sustainable and the same is hereby ordered to be deleted. 6. In the result, the appeal of the assessee stands allowed.
Reopening Notice Quashed for Lack of Prima Facie Belief of Escaped Income.
IMPORTANT GST CASE LAWS 28.10.2025

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