2014 (2) TMI 188

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..... e respondent assessee. The substantial questions of law that arise for consideration in the appeal are as under: "Whether, on the facts and in the circumstances of the case is not the order of the assessing officer diminishing the export turnover by reducing the foreign commission and thereby reducing the claim under section 80HHC of the Income Tax Act in accordance with law? 2. Whether, on the .....

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..... on is an instance of charge attached to the export order, therefore, it becomes a pre-charge created on the export orders canvassed by the agent, hence, what the assessee receives in reality is export proceeds and therefore commission amount cannot be included in the export turnover of the assessee. This came to be challenged before the first appellate authority and the first appellate authority f .....

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..... d confirmed the order of the Commissioner of Income Tax (Appeals). Aggrieved by the same, the present appeal is filed. 3. The entire controversy arose as the assessing officer disallowed the commission paid to foreign agent on the ground, it is hit by the provisions of Section 40(a) of the Act. He took support from Toshoku Ltd's case (Supra). In order to calculate the actual tax payable and to gi .....

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..... by the total turnover. The question is whether the commission paid by the foreign agent has anything to do with the export turnover declared by the assessee. Though such commission paid to the foreign agent could be claimed as expenditure, it cannot go out of the export turnover as indicated by the assessing officer, because the nature of income paid as commission to the foreign agent cannot deci .....

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..... for the assessing officer to place reliance on the terms of contract between the assessee and the agent in order to deduct the commission amount from the export turnover. Therefore, Commissioner of Income Tax (Appeals) and the Tribunal were justified in rejecting the method of calculation adopted by the assessing officer and allowing the exporter assessee to include commission paid to the agent in .....

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