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TMI Blog2013 (6) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant : T. Sankar, SR-DR For the Respondent : M. K. Patel, AR ORDER Kul Bharat (Judicial Member) This appeal by Revenue is directed against the order of Commissioner of Income-tax (Appeals)-Gandhinagar, Ahmedabad ( CIT(A) for short) dated 28-12-2012 for the assessment year (AY) 2009-10. The Revenue has raised following effective ground, which reads as under:- 1. The learned CIT(Appeals) has erred in law and on facts in deleting the disallowance made by the AO u/s. 40A(3A) of the Act amounting to R.35,13,352/-. 2. Briefly stated facts are that assessee is an authorized distributor of IDEA Cellular products viz., sim card, recharge coupon etc., for taluka Dabhoda under jurisdiction of Gandhinagar. The case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. However, Ld. CIT(A) accepted the contention of the assessee and observed that assessee is a distributor does not, in fact, make any purchase either of goods or services on the acceptance of delivery of the SIM cards or other service products and resultantly does not incur any expenditure in its respect. Once the payments are not of the nature of expenditure, there is no question of there was no question of disallowance of any expenditure by invoking provisions of Section 40A(3) of the Act. Ld. CIT(A) followed the order of Hon ble Co-ordinate Bench rendered in the case of S. Rahumathulla (supra) and Koottummal Groups (supra). We find that the facts of the present case are similar to that facts of the decision relied by the Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho only activates the same (on a satisfactory compliance of the terms of the service relationship), leading to an access to its network, without or apart from which these are of no use or value. The payments made by the franchisee-distributor to the principal are only on his (the latter s behalf); it being only entitled to a commission for the services rendered. The question of no separate payment being made by the payee-principal to the payer-agent, i.e,, toward the remuneration or commission, stands also discussed therein. Reference thereto, being reported, and particularly to para 4.4 thereof, would be relevant in the matter. The provision of s. 40A(3) was found as not applicable in the facts and circumstances of the case its conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee succeeds on grounds (a) to (g) of its appeal. The said decision would be squarely cover the facts and circumstances of the present case, and following which we direct for the deletion of the impugned disallowance u/s. 40A(3). We decide accordingly. As we have disposed of the appeal, the assessee s Stay Petition becomes unfructuous. Respectfully following the decision of the Hon ble Co-ordinate Bench rendered in the case of Koottummal Groups (supra) we do not find any infirmity into the order passed by Ld. CIT(A) and same is hereby upheld. This ground of Revenue s appeal is dismissed. 7. In the result, Revenue s appeal stands dismissed. Order pronounced in Open Court on the date mentioned hereinabove at cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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