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TMI Blog2013 (5) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... o not survive for adjudication. Now ground no.4 with respect to initiation of penalty u/s 271(I)(c) of the Act, is premature and therefore dismissed as such. The remaining two grounds are reproduced herein-below for our consideration:- Ground No.2 The learned CIT(A) XVI, Ahmedabad has erred in confirming the disallowance of interest of ₹ 11,03,207/- u/s 40A(2)(b) of the I.T. Act. Ground No.3 The learned CIT(A) XVI, Ahmedabad has erred in confirming the disallowance of Commission of ₹ 6,00,000/- u/s. 40A(2)(b) of the I.T. Act. 3. Brief facts:- The assessee is a firm/trust engaged in the business of trading in steel, tubes and pipe fittings filed its return of income for the assessment year 2007-08 on 29.10.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the Tribunal for the assessment year 2008-09 would prevailed and the therefore the same may be followed. The ld. D.R. could not controvert to the submission of ld. A.R. however relied upon the order of the revenue and argued in support of the same. 5. After hearing both sides and perusing the paper book and other materials produced before us and further scrutinizing the order of the Tribunal dated 19.10.2012 for the assessment year 2008-09 in ITA No.1108/Ahd/2012, we find that the issue with respect to payment of sales commission to related parties for the relevant assessment year 2007-08 is covered by the aforesaid decision. The extract of the relevant portion of the order is reproduced herein-below for the sake of convenien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indore), in the case of Aluminium Corporation of India Ltd. Vs. CIT 86 ITR 11(SC) and in the case of CIT vs. Indo Saudi Services (Travels) (P) Ltd. 310 ITR 306 (Bom.) Respectfully relying upon these decisions and considering the totality of the facts and circumstances of the case, we hereby hold that the Trust has availed the services of these persons; therefore the commission was legitimately paid on the business brought by them. Resultantly ground raised by the assessee is allowed. Following the decision of the Tribunal cited supra, we hold the issue with respect to disallowance of ₹ 6 lacs being sales commission paid to related parties u/s 40A(2)(b) of the Act in favour of the assessee and accordingly directed the ld. A.O. to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vate financiers unlike the bank and private financial institutions generally do not lay down stringent conditions for advancing loans. Further the processing of the loan and advanced by private financier s are less cumbersome and less time consuming. As a result the risks suffered by the private financier s are multifold. Therefore, the rates of interests charged by the private financier s are higher compared to banks and financial institutions. Considering these facts, we are of the view that the interest rate of 15.5 per cent paid by the assess to its related parties is quite reasonable and therefore we hereby direct the ld. A.O. to delete the addition of ₹ 11,03,207/- made on account of excess payment of interest u/s 40A(2)(b) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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