ITAT deletes ₹1.66 crore addition on adat expenses after the commission agent demonstrated full TDS compliance. The department failed to rebut presumption of genuineness.
The Income Tax Appellate Tribunal (ITAT) has deleted an addition of ₹1.66 crore made on account of alleged fake adat (commission) expenses in the case of a commission agent, holding that the taxpayer had fully complied with TDS provisions under Section 194H of the Income Tax Act, 1961.
The department had disallowed the expenditure and raised the addition, alleging lack of genuineness. However, the ITAT observed that the assessee had duly deducted and deposited TDS on the commission payments.
"Where TDS is duly complied with and no specific evidence of forgery or collusion is produced, disallowance cannot be sustained,"the tribunal ruled.
The decision underscores the evidentiary weight of TDS compliance in validating business expenditures. Assessing officers must now adduce concrete material to rebut the presumption of genuineness arising from compliance, reinforcing procedural fairness in scrutiny assessments.
Citations
- Section 194H, Income Tax Act, 1961
