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TMI Blog2020 (5) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... his order. That even after having power co-terminus with that of the Assessing Officer, the Ld. CIT(Appeals) has not conducted any verification or enquiry as to the modus of operation of the assessee company and whether the finding brought on record by the Assessing Officer is correct or not, nothing has been specifically dealt with in his order. CIT(Appeals) has also mentioned in his order that Since each assessment year is separate in itself, facts needs to be verified. Set aside the order of the Ld. CIT(Appeals) and remand the matter back to his file for passing a speaking order - Appeal of the assessee is allowed for statistical purposes. - ITA No. 1173/PUN/2017 - - - Dated:- 12-3-2020 - Shri D. Karunakara Rao, AM And Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re educating the villagers/farmers regarding having use of the products manufactured by the assessee company and because of which, there is a boost to the sales of the assessee company and therefore, the commission payment is justified. 3. On the other hand, the contention of the Revenue is that this commission is nothing but bogus commission just to inflate the expenses of the assessee company and reduce the profit in order to avoid paying taxes. Therefore, this is a colorable device to defraud the government from the revenue which it is entitled to receive from the assessee. 4. The facts as demonstrated in the order of the Assessing Officer, the relevant paras are as follows: 15.13 As per the return, Dr. S.S. Ranadey and Dr. V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Maharashtra and Gujarat Region has been allotted for the marketing activities. It is seen that from the submission of the assessee company that none of the staff of the IMT Technologies Pvt Ltd sits in any of the Maharashtra office nor it has any of the infrastructural facility in Maharashtra except R D laboratory. The purpose of laboratory is R D and' not marketing. The commission is given not for R D but for marketing or liasoning services, R D and marketing are completely different activities and services. The personnel for both these services can't be interchangeable. The assessee. kept on justifying that it has offices in Bangalore and Punjab and laboratory at Pune, which has no relevance to the specified and special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable to the present case. The Department do not have any say as to how the company should make the expenditure. But when the genuineness and for the purpose of the business is checked, the assessee company should be table to produce the evidences to prove the same. Further, the assessee could not produce the evidences based on which it could be accepted that the commission work was actually carried out by the three related companies. 19. In conclusion, the shifting of the commission expenses to group companies which are not having infrastructure, skilled manpower, vehicles office in the areas in which they are allotted marketing work, and specifically having common working personnel and controlling directors, it is a colourable dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work was actually carried out by the three related companies. I find that the expenses are shifted to the related concerns which have either loss or very less total income and the tax payable is either nil or less. This way tax is not paid instead refund has been taken away out of the TDS made by the appellant. Reliance has been placed in the case law Sasson J. David and Co. Pvt. Ltd. Vs. CIT(SC) wherein it has been stated that The fact that somebody other than the assessee is also benefited by the expenditure should not come in the way of deduction, if it satisfies otherwise the test laid down by law. However, the case law is related to the business expenditure related to retrenchment compensation and therefore, the issues and facts on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) also did not deal with each and every factual aspect as brought out by the Assessing Officer in his order. That even after having power co-terminus with that of the Assessing Officer, the Ld. CIT(Appeals) has not conducted any verification or enquiry as to the modus of operation of the assessee company and whether the finding brought on record by the Assessing Officer is correct or not, nothing has been specifically dealt with in his order. 6.1 That further, the Ld. CIT(Appeals) has also mentioned in his order that Since each assessment year is separate in itself, facts needs to be verified. That therefore without any verification on facts, the Ld. CIT(Appeals) has given his decision. In the interest of justice, we set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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