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TMI Blog1997 (12) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... as right in holding that the disallowance should be reduced to Rs. 40,000 in respect of the commission paid by the assessee to its employees ? 2. Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in holding that rule 6D of the Income-tax Rules does not apply to directors and that no disallowance could be made under the said rule and consequently in sustaining the order of the Commissioner of Income-tax (Appeals) deleting the disallowance of Rs. 12,751 made by the Inspecting Assistant Commissioner ?" The assessee, K. P. V. Shaik Mohamed Rowther and Co. (P.) Ltd., Madras, is a non-industrial domestic trading company, in which public are not substantially interested. The assessment for the assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to as "the Rules"). The Appellate Assistant Commissioner, considering the Appellate Tribunal's order in respect of the assessee for the earlier assessment years, sustained the disallowance to an extent of Rs. 40,000 with regard to the commission/service charges, payable to its employees, apart from deleting the disallowance of Rs. 12,791 under rule 6D of the Rules. Aggrieved by the order of the Appellate Assistant Commissioner, the Revenue preferred an appeal before the Appellate Tribunal and the Appellate Tribunal upheld the order of the Appellate Assistant Commissioner on the ground that there is no warranting circumstance to interfere with the order of the said appellate authority. Aggrieved, the Revenue has sought for this refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the earlier assessment years are as follows : __________________________________________________________________________"Assessment Commission Disallowed by year paid ITO CIT (A) Tribunal _________________________________________________________________________ 1975-76 4,94,530 4,94,530 2,47,265 25,000 1976-77 5,11,741 4,94,530 25,000 25,000 1977-78 6,29,930 6,29,930 35,000 35,000 1978-79 6,49,386 1,30,000 35,000 35,000 1979-80 6,85,356 1,20,000 10,000 40,000." __________________________________________________________________________- For the assessment year in question also the dispute relating to the payment of commission/service charges went up to the Appellate Tribunal and the Appellate Tribunal sustained the disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rived at by the Tribunal, which was based upon the order passed by the Commissioner of Income-tax (Appeals), we do not want to interfere with the order of the Tribunal." In the present case also, the Revenue has not brought to the notice of this court any change in the circumstances to deviate from the conclusion arrived at by the Tribunal, in the light of the decision of this court referred to above. Therefore, we are of the opinion that the order of the Appellate Tribunal has to be sustained. Learned counsel for the Revenue would contend that the deduction of Rs. 12,791 cannot be allowed under rule 6D of the Rules on the ground that the abovesaid rule does apply to directors. But, learned counsel for the assessee would contend that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Modipon Ltd. (No. 1) [1995] 212 ITR 420 (Delhi), has no application to the facts and circumstances of this case as it deals, inter alia, with the question of law as to whether the provisions of rule 6D will apply to a foreign technician, who is not an employee of the assessee-company. In view of the discussion made above, question No. 1, is answered in the affirmative and against the Revenue. Question No. 2 is not correctly worded in the light of the facts set out by the Appellate Tribunal and, therefore, it is reframed as follows : "Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in holding that rule 6D of the Income-tax Rules applies to directors and that no disallowance could be made under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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