Jorawar Singh v. Commissioner Of Income Tax, Karnal ...... Responden

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No.145 of 2014Date of decision:10.03.2015 Jorawar Singh....AppellantVersusCommissioner of Income Tax, Karnal...... Responden CORAM:HON'BLE MR.JUSTICE S.J.VAZIFDAR, ACTING CHIEF JUSTICEHON'BLE MR.JUSTICE G.S.SANDHAWALIAHON'BLE MR.JUSTICE G.S.SANDHAWALIA Present:Mr.S.K.Mukhi, Advocate, for the appellant. Mr. Yogesh Putney, Advocate, for the respondent ---- S.J.Vazifdar, Acting Chief Justice(Oral): This is an appeal against the order of the Income Tax AppellateTribunal (for short, the ‘ITAT") dated 13.09.2013, dismissing the appeal againstthe order of the Commissioner of Income Tax (Appeals) (for short, the 'CIT),which in turn, confirmed the order of the Assessing Officer (for short, the 'AO'),disallowing the deduction claimed by the appellant/assessee in a sum of46,42,870/-, under Section 37 of the Income Tax Act, 1961 (for short, the 'Act’). The proceedings pertain to the assessment year 2008-09. Theappellant is a LIC agent, working and procuring the business under the insurancepolicies. The appellant received a commission from LIC of.=24,80,612/-. Theappellant has claimed to have paid the said commission and claimed thededuction of46,42,870/-, contending that the same was paid in cash by him to theconsumers. Initially, it was contended that the commission had been paid to thenew policy holders. The names of 40 such persons was mentioned. Theaggregate amount of the amount paid had come only to =1,42,045. The details inrespect of the balance payment were not produced. It appears that the payment ofSAILESH RANJAN2015.03.13 16:56I attest to the accuracy andsuitdrancentives to new customers was contrary to Section 41 of the Insurancintegrity of this document Act, 1938. That is a different matter altogether. The appellant, thereafter,contended that the commission was, thus, only a business promotion incentive.In further variance, however, made by the appellant, it was submitted that theamount of commission was paid not to the new customers directly but throughthe agents who introduced the appellant to the new customers. The AO, CIT and the ITAT went into the question as to whether thepayment of commission has been made at all or not. This was essentially only aquestion of fact. After appreciating the evidence on record, they came to theconclusion that the appellant was unable to establish that the commission hadbeen paid to the agents/sub-agents, as alleged subsequently. The affidavits of theSaid persons purporting to have received the alleged payments were dated24.02.2012, 1.e., after the assessment year, The finding is one purely of fact. No question of law, thus, arises inrespect thereon. Faced with this, it was contended that the findings are perverse. We are unable to agree. It is not as if there was no material to cometo that finding. The effect of the change in stand is also a question ofappreciation of the facts and the findings. The ITAT has, after noticing all thesefacts, come to the conclusion that the payment of commission had not beenproved. We are unable to term this finding as perverse. The expenses for telephone, conveyance, depreciation of cars andentertainment was disallowed only to the extent of 20% by the AO. It has beenfurther reduced by the ITAT to 10%. The same does not warrant any interference. The appeal is, therefore, dismissed, (S.J.Vazifdar)Acting Chief Justice(G.S.Sandhawalia)Judge