9911796707
TMI Blog2018 (12) TMI 1658X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to disallowance on account of commission expenses. 2. During hearing of this appeal, the ld. DR, Shri D. G. Pansari, defended the imposition of penalty by the ld. Assessing Officer by advancing arguments, which is identical to the ground raised. On the other hand, Shri Deepk P. Tikekar, ld. counsel for the assessee contended that the quantum addition was set-aside to the file of the Ld. Assessing Officer by the Tribunal vide order dated 25/11/2016 (ITA No.1264/Mum/2012). This factual matrix was consented to be correct the Ld. DR. 2.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion of the order of the Tribunal dated 25/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission to the agents interconnected with the National Thermal Power Corporation, Bharat Heavy Electricals, National Fertilizers, Powertech Corporation, Bharat Heavy Electricals, National Fertilizers, Powertech Corporation, National Dairy Development Corporation, Goa Shipyard, INS Gomati, Controller of Procurement, Gujarat State Energy Corporation and Vasantrao Dada Patil Sahakari. The Assessing Officer was of the view that no middle man was permitted for the transaction with Government organization and public sector, therefore, the said commission was not allowable hence added to the income of the assessee. Feeling aggrieved, the assessee filed the appeal before the CIT(A) who confirmed the said addition, therefore, the assesse has filed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, in view of the said circumstances we allowed the additional evidence and direct the Assessing Officer to consider the claim of the assessee accordingly by giving an opportunity of being heard to the assessee in accordance with law. Accordingly, the finding of the CIT(A) on this issue has been ordered to be set aside and issue is directed to be restored to the file of Assessing Officer to decide the matter a fresh in view of the above said observations and in accordance with law. 5. In the result, the appeal filed by the assessee is hereby Allowed for statistical purpose." We find that while deliberating upon the quantum addition, the Tribunal noted that certain documents were not produced before the Assessing Officer as well as be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable on record. The facts, in brief, are that the assessee is engaged in manufacturing of displacement pumps declared income of Rs. 14,33,84,700/-, which was processed under section 143(1) of the Act. The case of the assessee was selected for scrutiny under CASS, therefore, notice under section 143(2) and subsequently 142(1) of the Act were issued and served upon the assessee. The assessee attended the same and filed details. The assessee is supplying its goods to government agencies/PSUs for which the assessee claim to have paid commission to agents for getting sales contract from BHELs. The details of which are summarized hereunder:- Sr. No. Name of the agent/party Amount paid 1 Bhalla Associates 45,00,984 2. Denetto Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s nothing but kickback and violation of law, consequently, the claimed expenses were declined by the ld. Assessing Officer. On the other hand, before the Ld. Commissioner of Income Tax (Appeal), the assessee took the plea that the Ld. Assessing Officer has not pointed out as to which public policy was violated. It was observed by the Ld. Commissioner of Income Tax (Appeal) that in fact services were rendered by these agents and thus the commission paid to them was justified. The Ld. Commissioner of Income Tax (Appeal) has also mentioned the decision of the Tribunal in the case of M/s Arco Electro Technology Pvt. Ltd. (ITA No.7250/Mum/2010) and finally concluded that such commission payment cannot be disallowed. However, the Ld. Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /PSUs for which they have been paid commission. Section 37(1) contains the general provisions of allowance. The assessee is directed to produce the necessary evidence in support of its claim because as per section 37(1) explanation-1, any expenditure incurred by the assessee for any purposes, which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purposes of business or profession and shall not be allowable. Thus, the appeal of the Revenue is allowed for statistical purposes.
Finally, appeals of the Revenue are allowed for statistical purposes.
This Order was pronounced in the open court in the presence of Ld. representative from both sides at the conclusion of hearing on 30/10/2018. X X X X Extracts X X X X X X X X Extracts X X X X
|
