IN THE HIGH COURT OF DELHI AT NEW DELHI 
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  16.04.2009 
 Present:       Ms P.L.Bansal, Sr.Standing Counsel with Mr Sanjeev Rajpal and Ms 
 Anshul Sharma, Standing Counsel for the Revenue. 
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 + ITA No.227/2009 
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 The question that has been agitated before us pertains to a sum of 
 Rs 32 lacs approximately paid  as commission by the Assessee to several parties. 
 The impugned Order details 18 such persons and also expresses satisfaction that 
 the payments were genuine.  Ms Bansal, learned counsel appearing for the 
 Revenue, contends that the payments of commission is not in issue.  The argument 
 is that there was no consideration or cause for payment of commission to those 
 parties, since, no services had been rendered by the recipients of commission. 
 This is completely belied by the detailed findings recorded by the Tribunal in 
 paragraphs 7 to 7.13 of the impugned judgment. We note that the Tribunal has 
 also recorded that there is no evidence that commission flowed back to the 
 Assessee or that the entries with respect to commission payments were just paper 
 transaction. The following observations being relevant are extracted 
 hereinafter: 
 There is no evidence on record to show that the commission was paid to any 
 near relative, family member or sister concern. There is no iota of evidence to 
 show  that  the  payment of  commission represented 
 ITA No.227/2009                                                 Page 1 of 3 
 only accommodation entry or was only a paper transaction. There is also no 
 evidence to show that the amount of commission came back to the Assessee in any 
 form. Since the Assessee has given full details including the addresses of 
 buyers and addresses of the agents, as well as details of payment etc. the 
 transactions of payment of commission as well as the aspect of rendering 
 services by the commission agents were fully verifiable. However, neither the AO 
 nor the learned CIT(Appeals) made any attempt at their end to make probe into 
 the matter for coming to the conclusion that the transactions were bogus, unfair 
 and fraudulent. In our opinion, in absence of any such material on record and in 
 absence of any inquiry conducted to prove the non-genuineness of the 
 transactions the departmental authorities were not justified in disallowing the 
 claim of the assessee which was fully supported by the documentary evidence on 
 record. 
 Apart from expressing its satisfaction as to the genuineness of the 
 transaction the ITAT has taken into consideration the fact that commission has 
 been paid and allowed in the past and that the commission percentage is 
 negligible.  Ms Bansal contests this position. The total turnover of the 
 Assessee was Rs 68 crores before tax, inter alia of which included Rs 25.68 
 crores of export turnover. The turnover we are concerned with is stated to be Rs 
 3.74 crores on which the commission has been paid.  It has been pointed out by 
 Ms Bansal that rather than the stated 0.05% the commission, the commission 
 works  out  to  1.5%  in relation  to local sales and 
 ITA No.227/2009                                                 Page 2 of 3 
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 7%    as  far   as   export   turnover  is  concerned.     Even then according 
 to us there remains no reason to doubt these payments.  It has been laid down in 
 several decisions of the Supreme Court that the ITAT is a final forum for 
 findings of fact.  The High Court  would intervene only if a finding appears to 
 be perverse, which we are unable to conclude in the case in hand. 
 So far as the second question is concerned it relates to disallowance of 
 Rs 2 lacs under Section 14A of the Income Tax Act, 1961.   The ITAT has noted, 
 and correctly so in our view, that the expenditure cannot be disallowed on the 
 basis of a mere estimate as to what possibly could have been incurred to earn 
 income exempted from tax. The Tribunal records no evidence has been brought on 
 record to show that the  impugned expenditure was incurred to earn exempted 
 income,  thus meriting disallowance. 
 No substantial questions of law arise for our consideration. 
 Dismissed. 
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 VIKRAMAJIT SEN, J. 
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 RAJIV SHAKDHER, J. 
 APRIL 16 2009/nt 
 ITA No.227/2009                                                 Page 3 of 3 
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