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Issues:
1. Revision action by CIT despite earlier order by Commissioner(A) 2. Merits of the assessee's claim to deduction under s.35B for export sales commission Revision Action by CIT: The judgment dealt with two main issues. Firstly, it questioned whether the CIT had the authority to take revision action despite a prior order by Commissioner(A). The CIT, relying on a decision of the Madras High Court, directed the ITO to conduct a fresh assessment withdrawing the deduction claimed by the assessee under s.35B for export sales commission. The assessee argued that since the Commissioner(A) had already considered and decided on the claim in appeal, the revisional power did not extend to this matter. The Departmental Representative contended that only the part of the order subject to appeal merged, citing relevant case laws. The Tribunal analyzed the appellate order and concluded that the Commissioner(A) did not consider or decide on the claim for export sales commission, making the revisional order invalid for those years. Merits of Assessee's Claim: Secondly, the judgment delved into the merits of the assessee's claim for deduction under s.35B for export sales commission. The specific provision in question was s.35B(1)(b)(iv) concerning the maintenance of an agency for promoting sales outside India. The Tribunal interpreted whether appointing an agent constituted maintaining an agency, concluding that there was no distinction between the two. The Departmental Representative argued that an office or similar establishment must be maintained for an agency, which the Tribunal disagreed with, emphasizing that an agent creates an agency. The Tribunal distinguished the case relied upon by the CIT and held that paying commission to an agent is crucial for export promotion, making the benefit available to the assessee. Relying on the Madras High Court decision, the Tribunal found that the order in revision was not justified and allowed all the appeals in favor of the assessee.
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