Can commission payments be allowed without obtaining no-deduction certificate u/s 197 of the IT. Act?

INCOME TAX APPELLATE TRIBUNAL
[ DELHI BENCH “E”: NEW DELHI ]

BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER
AND
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
(Through Video Conferencing)

ITA No. 133/Del/2016
(Assessment Year: 2009-10)

ACIT, Shri Gurcharan Singh,
PAN: ATBPS9241F
(Appellant) 

Vs. 

646, 1st Floor,
Circle-47(1), Gali Ganteshwar,
Katra Neel, Chandni Chowk,
New Delhi. Delhi - 110 006.
(Respondent)

Department by : Shri S. S. Negi, Sr. DR
Assessee by : Shri Mayank Patwari, CA

Date of Hearing 08/04/2021
Date of pronouncement IP/06/2021

ORDER

PER PRASHANT MAHARISHI. A. M.

1. This appeal is filed by the Assistant Commissioner of Income Tax, Circle 47 (1), New Delhi, for assessment year 2009-10 against the order passed by the CIT (Appeals)-16, New Delhi, dated 30.10.2015.

2. The revenue has raised the following grounds of appeal:-

“1. Whether the commission payment of Rs. 3,41,57,558/- can be allowed even when these payments were made without obtaining no-deduction certificate u/s 197 of the IT. Act?

2. Whether the commission payments of Rs.3,41,57,558/- made without TDS being deducted can be allowed to the agents who have business connection in India and are subject to tax deduction at source u/s 195 of the Act.?

3. Whether the commission payment of Rs. 1,31,995/- on which TDS is deducted can be allowed when the assessee has failed to prove genuineness of the transaction? Reliance is placed on the decision of Hon’ble Supreme Court in the case of CIT vs. Durga Dass More 82 ITR 540 and in the case of Sumati Dayal vs. CIT 214 ITR 801 (SC).

4. Whether the Ld.C!T(A) was correct in deleting the addition of Rs.3,47,232/-made on a/c of interest on investment made, when the assessee had not sufficient interest free funds available?

5. Whether the Ld.CIT(A) was correct in facts and circumstances of the case and in law in deleting the addition on above accounts. ? ” Brief facts of the case show that assesse is an Individual carrying on business as proprietor of M/s. Guru Nanak Exports , filed its return of income on 31.03.2011 declaring income of Rs.17,54,510/-. The return was processed under Section 143(3) of the Income Tax Act, 1961 (the Act). Subsequently it was found that assessee has paid commission of Rs.3,42,89,553/- to foreign agents on which no tax is deducted at source and, therefore, commission expenses claimed were not allowable as deduction under Section 40(a)(ia) of the Act. Therefore, after recording the above reason notice under Section 148 of the Act was issued on 21.05.2012. Subsequently assessment proceedings took place. The assessee was asked that as no TDS has been deducted at source on the commission paid to foreign agents of Rs.3,41,57,558/-to Mr. Atequallah and Mr. Amanullah Khan, same is disallowable. 

To know more in details find the attachment file