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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 ..... ed 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 to Rs. 23,44,400/-, which in turn, was included in the total payment of Rs. 35,26,887/-. The Revenue in ITA No.894/PN/2014 has raised the said issue by way of grounds of appeal No.1 and 2. Similarly, in ITA No.895/PN/2014, the Revenue has also aggrieved by the order of CIT(A) in deleting the disallowance of Rs. 32,79,650/- being third party commission paid by the assessee, in turn, relying on the order of Tribunal in assessee's own case. Further, the appeal has been filed by the Revenue against separate order of CIT(A) relating to assessment year 1997-98 on identical issue of allowance of third party commission paid by the assessee amounting to Rs. 39,34,928/-. An additional ground of appeal by way of ground of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord, 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 activities of the dealer, assessee pays commission. It has also been explained that the dealers are mainly responsible for follow up for the quotations and to help the company in procuring the orders and also for effecting recoveries and collection of 'C' Form etc. Even with regard to the Government customers, assessee's personnel at the Regional offices are supported by the network of dealers who are based at a closer location to the customers' site. In such cases, the responsibility of the dealer is to provide necessary logistic and communication support to the assessee's staff. The warranty services of the product, which include regular service visits to ensure smooth operation of the equipment at the customer's site is also arranged thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 solitary party, learned counsel for the assessee referred to page 215 of the Paper book wherein necessary confirmation has been placed, though the party had not responded to the summons issued by the Assessing Officer. In fact the factual scenario of the verification exercise would reveal that overwhelming number of parties randomly chosen by the Assessing Officer has acknowledged the commission payments and in any case, there is no denial of the payment in any of the case. Considering the entirety of the facts and circumstances of the 14 instant year as also the precedent in the assessee's own case wherein the practice of paying commission to dealers/agents, stand established, we find no reasons to interfere with the ultimate conclusion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaking is Rs. 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 Rs. 30 (30 per cent of Rs. 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 Rs. 100 but on Rs. 70 being the profits of the business reduced by the amount of profits allowed under section 80IA(1). According to the assessee, deduction under section 80HHC has to be computed on the profits of the business of Rs. 100 and not on Rs. 70 as contended by the Revenue, because, according to the assessee, section 80IA(9) does not affect the computation of deduction under section 80HHC but affects the allowance of deduction computed under section 80HHC, so that the aggregate deduction does not exceed the profits of the business." 10. The Hon'ble High Court vide para 39 observed as under:- "39. In the result, we hold that section 80-IA(9) does not affect the computability of deduction under various provisions under heading 'C' of Chapter VI-A, but it affects the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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