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TMI Blog2016 (2) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... Out of this bunch of three appeals, two appeals filed by the Revenue are against consolidated order of CIT(A)-I, Nashik, dated 25.02.2014 relating to assessment years 1989-90 1995-96 against respective orders passed under section 143(3) and 143(3) r.w.s. 250 of the Income Tax Act, 1961 (in short the Act ). The Revenue is also in appeal against the order of CIT(A)-I, Nashik, dated 03.03.2005, relating to assessment year 1997-98 against order passed under section 143(3) of the Income Tax Act, 1961 (in short the Act ). 2. This bunch of three appeals relating to the same assessee were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The Revenue is aggrieved against the consolidated order of CIT(A) relating to assessment year 1989-90 and 1995-96 in deleting the disallowance made on account of third party commission paid by the assessee, in turn relying on the decision of Tribunal in assessee s own case. The grievance of the Revenue was that there was no justification in the order of CIT(A) in allowing the third party commission paid to various business agents in respect of orders obtained from government agencies amounting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1988-89, 1991-92, 1992-93, 1993-94 and 1995-96 in ITA Nos.5141, 5142/Mum/1994 , ITA Nos.7280 to 7282/Mum/1995, 1978/Mum/1997, 3315/Mum/1999 152/Mum/2003 and ITA No.4335/Mum/2004 relating to assessment year 2000-01. Further, Pune Bench of Tribunal in ITA No.409/PN/2010 in cross appeals with lead order in ITA No.448/PN/2010 i.e. appeal filed by the assessee vide order dated 30.01.2012 considered the factual aspects and held as under:- 23. We have carefully considered the rival submissions. We have also perused the orders of the authorities below as well as the assessee s written submissions and other material placed on record, which has been referred to in the course of the hearing before us. Briefly put, as per the material on record, it emerges that the assessee company has customers spread all over India and in order to serve such customers at various locations, assessee appoints dealers for its various products, namely, compressors, construction and mining equipment, spares and accessories. It has been explained that the dealers also undertake direct sales and orders are also booked by the dealers 12 and products are invoiced/supplied to the customers. On the latter activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtments, etc. We do not find any material adverse to the aforesaid explanation of the assessee. Even otherwise, it has been pointed out that commission payment to dealers with respect to the orders from a Government agency was a subject matter of consideration by the Tribunal in the assessee s own case for assessment year 1985-86 vide ITA No 114/M/03 dated 25.7.2007. In this precedent, the Tribunal has allowed the deduction after being satisfied of the practice of commission payment. In this background of the matter, and with no adverse material on record, we do not find any merit in the objections raised by the Assessing Officer with regard to commission payment to dealers relating to the orders from the Government agencies. At this point, we may also observe that even with regard to the verification exercise carried out by the Assessing Officer, we find nothing adverse so as to infer that the impugned commission payments were ingenuine. The Assessing Officer issued summons to 17 randomly selected parties, out of which 12 replies were received and 4 summons came back unserved. In relation to one party, no response was received in-spite of service of summons. With regard to such so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excluding the profits allowed as deductions under section 80IA, so that the total deduction allowed under the head C' of Chapter VI-A does not exceed the profits of the business. 9. Following the above said parity of reasoning, where the assessee had claimed deduction under section 80IA of the Act, then the deduction under section 80HHC of the Act is to be restricted to the profits of business that remains after excluding the profits allowed as deduction under section 80IA of the Act. The Hon ble High Court had further vide para 26 had elaborated the provisions of section 80IA(9) of the Act to hold that the deduction allowable under Chapter VI-A is to be computed as under:- 26. To illustrate, if the profits and gains of the eligible undertaking is ₹ 100, the deduction allowable under section 80IB(10) of the Act-IA(1) is 30 per cent and the deduction allowable under section 80HHC is 80 per cent, then according to the Revenue, deduction to be allowed under section 80-IA would be ₹ 30 (30 per cent of ₹ 100) and in view of section 80IA(9), the deduction under section 80HHC has to be computed not on the profits of the business of ₹ 100 but on S ..... 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