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TMI Blog2021 (8) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... est otherwise. AO has neither doubted the payments nor has doubted the parties to whom the payments were made. AO has also agreed on the services rendered by these liaison representatives for the assessee company. AO has not given any cogent reasoning or finding for the ad-hoc disallowance at the rate of 7.5 % in respect of the commission paid to these liaison representatives. These ad-hoc disallowances are not only unsustainable in the case of limited company but also in the case of any assessee for that matter. Since Quasi-Judicial Authorities are required to substantiate every addition made with proper reasoning and that reason should come out from the orders of the authorities itself. The thinking process must clearly get reflected in the order based on examination of facts and evidences. In this case, such exercise is missing by the Assessing Officer which was rightly observed by the Ld. CIT(Appeals). There cannot be any additions sustained which are primarily founded on platform of doubt only. - Decided against revenue. - ITA No. 104/PUN/2015 - - - Dated:- 18-8-2021 - Shri Inturi Rama Rao, Accountant Member And Shri Partha Sarathi Chaudhury, Judicial Member For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nish the details of expenses incurred/ claimed on account of sales commission paid to various sales representatives/liaison representatives. The background of calling for these details by the Assessing Officer was that the survey action was conducted u/s.133A of the Income Tax Act, 1961 (hereinafter referred to as the Act‟) in the case of assessee-company on 11.03.2011. That during the course of survey action, certain documents were impounded u/s.133A(3)(ia) of the Act and statement of the Director of the company was also recorded. Thereafter, assessments of four years i.e. AY 2004-05 to AY 2007-08 were reopened by issuing notice u/s.148 of the Act and during the course of these assessments, this issue has been investigated in the light of the statement recorded during survey proceedings. Accordingly, similar details have been called for from the assessee in respect of the commission payments made to liaison representatives who were dealing with various units of Indian Railways on behalf of the assessee-company. The requisite details were submitted by the Ld. AR of the assessee-company before the Assessing Officer. 6.1 In the detailed submissions filed by the assessee bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce between liaison representatives and the assessee company also shows that the said representatives are actively involved in coordinating with the railways for technical inspection and microstructure analyses with the RDSO attending to customer complaints, liaisoning between the customers workshop/depot and purchase/accounts departments located at different stations arranging visits of customers to assessee‟s factory for capacity assessment, audit and requalification etc. The marketing role extends to giving presentation regarding products and capability, submission of tenders, attending tender opening, rate negotiation, order procurement etc. 7.2 The Ld. CIT(Appeals) further observed that so far as the logistical and commercial support services are concerned, the liaison representatives ascertained the requirement of the customer vis- -vis the availability of products, payment follow up including submissions of invoices, bank guarantee etc., the coordination of unloading of materials, GR and inspections of goods, attending to reconditioning of goods as may be required etc. The Ld. CIT(Appeals) also observed that the correspondences which have been furnished on sample ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is dealing with the Government. The transactions and the dealings with the Government obviously cannot be done through an agent but the agent can assist an assessee in obtaining supply and facilitating of information which are required for the assessee. The explanation of the assessee that the agents assisted the assessee in the pre-tender and the post-tender activities is clearly borne out of the evidences which are part of the seized material. This being so, it cannot be said that no services have been rendered by the agents to the assessee. In the circumstances, we are of the view that the learned CIT(A) was right in deleting the disallowance of the commission as made by the AO. His impugned orders on this issue for all the seven years under consideration are, therefore, upheld and these appeals of the Revenue are dismissed. 6. The Tribunal has also discussed the proofs furnished by the assessee in the form of documentary evidence in respect of services rendered etc. for arriving at the aforesaid finding. All these are findings of fact and no question of law arises for determination in these appeals. These appeals are accordingly dismissed. 7.4 Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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