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TMI Blog2016 (3) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... n such break-up of total turnover of ₹ 24.78 crore along with the amount of commission on such sales, which matches with the amount credited to the Trading account. Once these 13 items totalling sale of ₹ 6.15 crore stand included in the figure of total turnover as per the Trading account, there can be no question of making any further addition on the same score. We, therefore, uphold the impugned order in deleting this disallowance. - Decided in favour of assessee Disallowance on account of unexplained commission payment where corresponding sales had not been credited by the assessee to the Trading and Profit & Loss Account - Held that:- It is seen from break-up of total turnover and total commission, as discussed supra, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the applicability of section 40(a)(ia) is concerned, we find that the same is not correct inasmuch as the assessee did deduct tax at source from payments made to its parent company. This issue is, therefore, sent back to the file of AO for a fresh decision as discussed hereinabove. - Decided in favour of assessee for statistical purposes. Disallowance on account of royalty payment made by the assessee - disallowance by applying section 40(a)(ia) - Applicability of section 2(22)(e)Held that:- We find that the assessee entered into an Agreement with its sister concern for the use of patent/brand in lieu of which it started making payment of royalty at the stipulated rate. Under similar circumstances, such royalty payment made by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oneet Dalal, and Shri Yishu Goel, Advocates For The Respondent : Shri Rajiv Ranka, Sr. DR ORDER PER R.S. SYAL, AM: This appeal by the Revenue arises out of the order passed by the CIT(A) on 28.2.2011 in relation to the assessment year 2007-08. 2. The first ground is against the deletion of addition of ₹ 6,15,68,134/- made by the AO on account of unexplained difference in the value of sales. 3. Briefly stated, the facts of the case are that the assessee declared sales of ₹ 24,78,70,238/- inclusive of ₹ 3,90,17,944/- on account of Service charges in its Trading account. During the course of assessment proceedings, the AO called for details of sales on which commission was paid and on which commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, a copy of which is available on pages 37-46 of the paper book. The thirteen items as noticed by the AO are, in fact, appearing in such break-up of total turnover of ₹ 24.78 crore along with the amount of commission on such sales, which matches with the amount credited to the Trading account. Once these 13 items totalling sale of ₹ 6.15 crore stand included in the figure of total turnover as per the Trading account, there can be no question of making any further addition on the same score. We, therefore, uphold the impugned order in deleting this disallowance. This ground is not allowed. 5. Ground no. 2 is against the deletion of disallowance of ₹ 60,19,438/- made by the AO on account of unexplained commission paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same related only to Royalty and not technical expenses. He, therefore, made disallowance of ₹ 67.67 lac. Without prejudice to his main reason for addition, he sustained disallowance u/s 40(a)(ia) of the Act as well, since in his opinion no deduction of tax at source was made on such payment. The ld. CIT(A) deleted the disallowance. 7. We have heard the rival parties and perused the relevant material on record. The ld. AR invited our attention towards page 90 of the paper book which is an Agreement between ONGC and the assessee. It was claimed that pursuant to this Agreement, the assessee got technical assistance from its parent company for which the said payment was made. However, on a specific query, no Agreement, between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, he also relied on section 2(22)(e) of the Act for making this disallowance in addition to applying the provisions of section 40(a)(i) of the Act. The ld. CIT(A) deleted the disallowance. 9. We have heard the parties and perused the relevant material on record. We find that the assessee entered into an Agreement with its sister concern for the use of patent/brand in lieu of which it started making payment of royalty at the stipulated rate. Under similar circumstances, such royalty payment made by the assessee to its sister concern came to be accepted and allowed as deduction by the Revenue in earlier years. Even the Transfer Pricing Officer found such payment to be at arm s length. The viewpoint of the AO in lifting the corporate v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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