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TMI Blog1983 (11) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals), however, on the other hand, following a decision of the Chandigarh Bench in IT Appeal No. 807 (Asr.) of 1979 in the case of ITO v. Nagesh Hosiery Mills, held that rule 6D(2) will not apply in the case of persons not in the category of employees. This is the first grievance of the revenue. 3. Rule 6D(2) reads as follows : "The allowance in respect of expenditure incurred by an assessee in connection with travelling by an employee or any other person within India outside the headquarters of such employee or other person for the purposes of the business or profession of the assessee shall not exceed the aggregate of the amounts computed as hereunder :-- (a) in respect of travel by rail, road, waterway or air, the expenditure act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis that the expenditure was incurred by the assessee himself as after all a partnership is nothing but a compendious name for the partners together constituting the same. Therefore, the decision of the Chandigarh Bench that partners would not come under the category of employees is quite justified and that has no application to a case where we are dealing with a matter relating to a limited company which is a juridical entity. Shri Mohan Lal, however, stressed that the same principle of interpretation, namely, ejusdem generis principle should be applied in construing the words 'any other person' but we are afraid the principle, first of all, cannot be extended to each and every case. Secondly, even if that principle is applied, directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. 23,520. The facts are not very much in dispute. The assessee entered into agreements with its agents for sale of its drugs. The essential terms as brought out in the specimen copy of the agreement, so far as the duties of the commission agents are concerned, are as follows : "(i) Handing over the community health visitor ayurvedic composite drug kits after taking delivery from 1st part to respective Chief Medical Officers in good condition. (ii) Obtaining of the acknowledgements and receipts from the respective Chief Medical Officers for the community health visitor ayurvedic composite drugs kits delivered to them. (iii) Submission of bills to the Joint Director (Small Pox), Medical and Health Services (NSEP), Uttar Pradesh, Luc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. (v) which they did not perform and No. (vi) which was not obligatory on their part in view of an agreement with the Government." It is further clear from the order of the ITO that he disallowed one-third of the commission since he agrees that other services were performed by the agents. The Commissioner (Appeals) held as follows : "When the question of rendering commercial services by the various commission agents to the appellant is not disputed by the ITO and when the commission payment is verifiable, having been paid to the various agents by the cheques, there is no justification to uphold the action of the ITO." 5. The learned departmental representative placed before us the relevant agreement and also the order of the ITO in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey rendered the services agreed to as per the agreement. They are paid commission for such services. In fact they are bound to perform all the services mentioned in the agreement. They must be ready to render such services. It is for rendering all the services or any other services to be rendered at any time when so demanded, that the commission has been stipulated to be paid. Therefore, there can be no justification for disallowing any part of the commission having regard to the terms of the agreement and the fact that services were in fact, rendered by the agents. It may be also mentioned that in the past commission was allowed in full with no objection and we are not able to appreciate as to why on the same set of facts a portion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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