2005 (10) TMI 40

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..... of the opinion that there is no substantial question of law raised within the ambit of section 260A of the Income-tax Act. We are therefore of the considered opinion that the appeal fails and the same is dismissed
Judge(s) : P. D. DINAKARAN., N. KANNADASAN. JUDGMENT The judgment of the court was delivered by N. Kannadasan J.-The above appeal is filed as against the order dated October 26, 2004, of the Income-tax Appellate Tribunal "D" Bench, Chennai. The assessment of the assessee for the assessment year 1994-95 was completed under section 143(3) of the Income-tax Act on March 27, 1997. The company manufactures a wide range of products like automotive and industrial chains, several auto ancillary products, etc. The Assessing Office .....

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..... d that the agency's services were utilised and, therefore, allowed the deduction for the assessment year under consideration. Aggrieved against the order of the Tribunal, the Revenue filed the appeal wherein the following substantial question of law is raised: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the commission paid to non-resident sole selling agents could not be disallowed in the absence of any evidence for their having rendered by services and by relying on irrelevant material?" Learned standing counsel for the appellant contended that the appellate authority as well as the Tribunal erred in deleting the disallowance of the commission paid to a foreign .....

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..... e Assessing Officer made any enquiry with regard to the availability of the infrastructure facilities. It is not mandatory in all cases that a commission agent should have necessary infrastructure facilities to augment the business of the assessee. In fact, in the present case, there was a steep rise in the foreign exchange relating to the relevant assessment year than compared to the previous assessment year. That would substantiate that the assessee has rightly utilised the services of the commission agent who was the former employee in promoting the market in foreign countries. In this connection, it is useful to refer to the decision in Modi Industries Ltd. v. CIT [1993] 200 ITR 329 (Delhi) wherein the decision of the Appellate Tribunal .....

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