9911796707
|
Home
Issues:
1. Deletion of addition of commission payment to parties. 2. Deletion of addition of freight and cartage expenses. 3. Disallowance of conveyance, car maintenance, car depreciation, and telephone expenses. 4. Disallowance of cost of briefcases given to employees. 5. Disallowance of miscellaneous expenses, staff welfare expenses, and subscription paid by the assessee. Issue 1: Deletion of addition of commission payment to parties: The case involved appeals by the department and the assessee regarding the deletion of an addition of commission payment to three parties. The Assessing Officer noted that the assessee paid excessive commission to these parties, leading to a dispute. The CIT(A) examined the details and confirmed that services were indeed rendered by the commission agents. The payments were made through banking channels against bills, and the agents performed various activities related to business operations. The CIT(A) allowed the commission deduction but restricted it to 5% against the claimed 6% for one party. The Tribunal, after considering all facts and precedents, held that the entire commission was allowable, reversing the restriction imposed by the CIT(A. Issue 2: Deletion of addition of freight and cartage expenses: Another issue involved the deletion of an addition of Rs. 85,000 on account of freight and cartage expenses. The Assessing Officer made an ad hoc disallowance, which was then reduced by the CIT(A). However, the Tribunal found that the disallowance was not justified as the expenses were properly accounted for, payments were made against bills, and the increase in expenses was due to export sales. The Tribunal dismissed the department's appeal and allowed the entire claim of the assessee. Issue 3: Disallowance of conveyance, car maintenance, car depreciation, and telephone expenses: The Tribunal addressed disallowances made by the Assessing Officer and confirmed by the CIT(A) regarding conveyance, car maintenance, car depreciation, and telephone expenses. The Tribunal, considering precedents and consistent views of other benches, allowed the assessee's grounds, stating that no personal use was involved in these expenses. Issue 4: Disallowance of cost of briefcases given to employees: The Tribunal also reviewed the disallowance of expenses on account of briefcases given to employees. The lower authorities did not accept the plea of commercial expediency for these expenses. However, the Tribunal found that the expenses were incurred for better commercial expediency and harmonious relations with staff members. The matter was restored to the Assessing Officer for further examination. Issue 5: Disallowance of miscellaneous expenses, staff welfare expenses, and subscription paid by the assessee: Regarding disallowances on account of miscellaneous expenses, staff welfare expenses, and subscription paid by the assessee, the Tribunal upheld some disallowances made by the Assessing Officer and CIT(A. However, the Tribunal found that the subscription expenses were incurred for business purposes and not due to personal obligations. Therefore, the disallowance of subscription expenses was deleted. In conclusion, the Tribunal dismissed the department's appeal and allowed the assessee's appeal in part, addressing various issues related to commission payments, expenses, and disallowances made during the assessment year 1990-91.
|
