Commission Expenses cannot be treated as Bogus

This ruling is a strong reaffirmation of the principle that commercial expediency and evidentiary sufficiency must outweigh suspicion-based disallowances. The Tribunal rejected the Revenue’s attempt to characterise commission payments as a “concerted scheme” without concrete evidence.

The judgment clarifies that once core elements, identity, payment trail, and business nexus, are established, the burden shifts to the Revenue. It also cautions against over-reliance on procedural gaps such as non-response to notices or similarity in confirmations.

Importantly, the Tribunal disapproves ad hoc and estimation-based disallowances where transaction-level examination has already been undertaken.