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TMI Blog2018 (2) TMI 1637X X X X Extracts X X X X X X X X Extracts X X X X ..... e analysis of export turnover in the past two assessment years show that after appointment of commission agent, the export turnover of the assessee in terms of volume and Revenue has substantially increased. Thus, the benefit of appointment of commission agent to the assessee is apparent from the records itself. It is prerogative of the assessee to decide, whether to appoint a commission agent or not and the manner in which business is to be conducted. It is a well settled law that the Assessing Officer cannot step into the shoes of assessee and decide business expediency of expenditure. - Decided in favour of assessee - ITA No.1830/PUN/2014 - - - Dated:- 21-2-2018 - SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM For The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the firm in Canada to whom assessee was exporting its products. The Assessing Officer after examining the agreement between the assessee and commission agent concluded that the agreement is a sham and colourable device to minimize assessee s tax liability. It is not a genuine business arrangement and thus, disallowed assessee s claim of export commission ₹ 1,10,43,495/-. Aggrieved by assessment order dated 15-03-2013, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The First Appellate Authority allowed the appeal of assessee. Now, the Revenue is in appeal before the Tribunal. 3. The Revenue has raised following grounds of appeal assailing the order of Commissioner of Income Tax (Appeals). 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment between the assessee and commission agent would show that the agreement has been drafted in very casual manner with contradictory clauses. The bills raised for commission are in fact on account of extra rate charged towards cost of packing. The agreement is nothing but make believe arrangement entered into with an overseas party to minimize assessee s tax liability. The ld. DR submitted that where such make believe arrangement are induced in the transactions, the veil has to be pierced to see the true colour of transactions. The ld. DR pointed that commission agent is wife of one of the partners of M/s. Korhani Distributors, Canada to whom assessee is exporting its products. The assessee has used sales commission agreement as a colourb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t years. The ld. Counsel placed on record a copy of assessment order passed u/s. 143(3) for assessment year 2009-10 at pages 88-89 of the paper book and the copy of assessment order for assessment year 2011-12 passed u/s. 143(3) at pages 84-85 of the paper book. The ld. Counsel contended that it is only in the assessment year under appeal that the Assessing Officer has raised objection on payment of commission on export sales. The commission paid by the assessee in preceding assessment year, subsequent assessment years and the assessment year under appeal is the same agreement. The ld. Counsel prayed that the rule of consistency demands that the addition made in the intervening assessment year should be deleted. The ld. Counsel further cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars 2007-08 to 2009-10 is as under : Sr. No. Description 2007-08 2008-09 2009-10 1 Sale Value 13,34,800 6,28,86,056 5,23,63,798 2 Commission 0 88,32,757 1,10,43,495 3 No. of Mats in 3ft.X6ft. 42,600 3,95,811 2,89,383 7. A perusal of the assessment order shows that the Assessing Officer has questioned business expediency of payment of commission paid by assessee on export sales. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be conducted. It is a well settled law that the Assessing Officer cannot step into the shoes of assessee and decide business expediency of expenditure. 8. The ld. DR in support of his submissions has placed reliance on the decision rendered in the case of Lachminarayan Madan Lal Vs. Commissioner of Income Tax (supra). In the said case, Hon ble Apex Court upheld disallowance of payment of commission as the assessee failed to show existence of selling agency. The finding of fact given by the Tribunal in the said case was that selling agency is nothing but another manifestation of assessee s firm. We find that the facts of the aforesaid case are entirely at variance from the facts of the case in hand. In the instant case, existence of ov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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