Alok Arya Vs. I.T.O., Ward - 37(4)

Parties Involved

Facts Summary

The assessee, Alok Arya, filed a return of income for the assessment year 2013-14, disclosing a total income of ₹12,24,580/-. The assessee is engaged in the business of trading medical goods and equipment under the name M/s Eastern Medical Services. The case was selected for scrutiny, and statutory notices were issued. The Assessing Officer (AO) observed a steep increase in commission expenses from ₹66,69,135/- in AY 2012-13 to ₹1,34,82,460/- in AY 2013-14, despite a marginal increase in turnover. The assessee explained that the increased commission was due to higher receipts from suppliers. However, the AO was not convinced and disallowed ₹67,98,098/- as bogus commission. In the appellate proceedings, the Commissioner of Income Tax (Appeals) (CIT(A)) not only affirmed the AO's order but also enhanced the income by ₹66,84,362/- on account of bogus commission expenses.…

Legal Issues

• 1. General issue raised in ground no.1
• 2. Addition on account of bogus commission expenses amounting to ₹67,98,098/-
• 3. Enhancement of income by ₹66,84,362/- on account of bogus commission expenses
• 4. Validity of commission expenses claimed by the assessee

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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