Question And Answer
Subject: Allowability of expenditure
Querist: Manali
Answered by:
Tags: , ,
Date: November 19, 2022
Query asked by Manali

Assesee is LLp and engaged in the business of call center. For procuring  business, assessee has paid Re. 5 lakh as commission after deduction TDs and claimed it as deduction as business  expenditure. Assessee has given confirmation from the party along with PAN n paid the amount by account payee cheques.

Ao issued summons U/sec 131 to the Act, to the party, mail ID is block.

Ao has issued show cause to the assessee asking as to why this expenditure should not be disallow as party has not filed copy of IT return of the recipient .

Whether action of AO is correct .

File Uploaded: Not Available

Answer given by

The burden is on the assessee to establish that the payment was made for services rendered. Mere deduction of TDS and giving PAN is not sufficient . Mere confirmation is not sufficient , the recipient of the commission has to respond to the summons .

Disclaimer: This article is only for general information and is not intended to provide legal advice. Readers desiring legal advice should consult with an experienced professional to understand the current law and how it may apply to the facts of their case. Neither the author nor and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information in this article nor for any actions taken in reliance thereon. No part of this document should be distributed or copied (except for personal, non-commercial use) without express written permission of

Leave a Reply

Your email address will not be published. Required fields are marked *