2004 (8) TMI 15

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..... assessee-company? (2) Whether, on the facts and in the circumstances of the case, the appointment of M/s. Bharat Vyapar Mandal as sole selling agents of the assessee-company was in order in law? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was in law justified in deleting the additions of Rs. 1,08,139 and Rs. 1,40,024 on account of commission to the sole selling agents in the assessment years 1969-70 and 1970-71, respectively? (4) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in deleting the disallowance of Rs. 3,401 and Rs. 3,460 being interest paid to the trust in respect of contribution to the provident fund in the assessment years 1969-70 and 1970-71, res .....

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..... nt was also held to be in contravention of the provisions of sections 192 and 314(b) of the Companies Act, 1956. The claim of deduction towards interest paid on delayed payment of provident fund to the trust amounting to Rs. 3,401 and 3,460, respectively, was also disallowed. In the appeal filed by the assessee, the Appellate Assistant Commissioner confirmed the assessment order. However, in the second appeal filed before the Tribunal, the Tribunal accepted the claim of the assessee-opposite party and allowed the payment of commission and interest. So far as the question as to whether the commission paid by the assessee to the firm should have been allowed or not, the Tribunal has held as follows: "We have carefully considered the respect .....

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..... ffered considerable loss, while this year it earned substantial profit. The appointment of sole selling agents, was therefore, quite justified. As regards the rendition of services, there is abundant material on record to show that the selling agents did render services to the assessee and hence, the payment of commission was fully justified and we hold accordingly." From the reading of the aforesaid order, it is absolutely clear that the Tribunal has found that the firm had been assessed in the status of a registered firm. Thus, it is a genuine firm. It has further found that the firm had rendered service on account of which the assessee had earned huge profits. The agreement entered into by the assessee with the firm as also the payment .....

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