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TMI Blog2022 (3) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of Ld. CIT(A). - Decided in favour of assessee. - ITA Nos. 547 , 548/Ind/2018 - - - Dated:- 21-2-2022 - MS. SUCHITRA R. KAMBLE , JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI , ACCOUNTANT MEMBER For the Appellant : Puneet Kumar , CIT - DR For the Respondents : S. C. Padliya , AR ORDER Per Bhagirath Mal Biyani , AM These two captioned appeals have been filed by the Revenue against the appeal-orders dated 20.03.2018 and 27.03.2018 passed by Ld. CIT(A)-1, Indore for the Assessment Year 2009-10 and Assessment Year 2010-11 respectively, arising out of the respective assessment-orders passed by Ld. AO u/s. 147 read with section 143(3) of Income-tax Act, 1961. 2. Originally these appeals were dismissed by our consolidated order dated 21.08.2019 in terms of CBDT Circular No. 3/2018 dated 11.07.2018 read with Circular No. 17/2019 dated 08.08.2019 due to low tax effect with a liberty to the revenue to point out, upon necessary further verification, and to seek recall of the dismissal and restoration of appeal if it is found the dismissal is not warranted due to any of the reason. Subsequently, the revenue filed Misc. Application No. 15/Ind/20 and 16/In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in letter dated 11.08.2010 filed during original assessment proceedings and disallowed the commission expenditure in a summary manner as under: 4.5 It is pertinent to note that during the course of regular assessment proceedings u/s. 143(3) the assessee vide submission dated 11.08.2010 had made the submission with respect to details of commission paid and explanation for the same asked by the concerned AO. The submission furnished on 11.08.2010 is reproduced below:- Your honour has required the assessee to submit the details of commission paid and the explanation for the same. As desired by your honour the assessee is submitting the details of the same for your kind perusal and consideration Marked as page no. 305-308. Further, the assessee offers his explanation for the same that the assessee has appointed various consignment Agents to whom commission on their sales is required to be paid by the assessee, similarly the assessee use to make the supply to the various Government Department of Southern and Northern India for which the assessee has engaged the service of various persons for liasioning to be done with these Government Department to whom the commission on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited to job of calling tenders for every purchase order and finalisation of tender process by placing order in name of one of the parties. The commission agents are involved in pre-tender and post tender work. Considering the description given Government Departments and commission agents are working towards same goal of' placing Government work orders, but they have separate and independent areas of work which are not overlapping. The A.O's view that in Government contracts there is no space for commission agents, is not a correct view and facts narrated above disprove such view. 4.3.3 There is no bar on commission agents in getting pre-tender and post tender work done in Government contracts. Their use of persuasive skills in garnering government orders, their involvement in getting all the conditions of contract properly complied and their help in getting the work order of such work signed are all parts of commercial expediency. 4.3.4 Payment to commission agents in Government contract is consistently held as an allowable expense by various courts namely Bharat Medical Stores (2009) 308 ITR. 373(P H). Laxmi Engineering Industries (2008) 298 ITR 203 (Raj.). Nesto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in connection with the custom clearance at the Port and shipment of the goods to the designated Country. After receiving the payment form the foreign buyer the appellant use to compensate the Agents by paying commission for their liasioning in connection with Export. (3) The appellant participates in Tenders of the various customers spread over the Country. For participating in Tenders various information of the appellant is required by the Customers before permitting the assessee to participate in tender. For which a local authorized person is required to be deputed to represent the appellant with such Customers before obtaining the authorization letter to participate in tender in order to qualify the appellant for participation in various tenders as per the norms fixed by the respective customers for the prospective supplies. (4) To follow up with the customers after submitted the tenders by the appellant either online or physically as per the requirements of the respective customer. Then before scrutinizing the terms of tender as submitted by the appellant any further clarification or information is required are being submitted by the Agents on the basis of the Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices rendered by them and not for procuring the supply-orders from Government Departments as perceived by Ld. AO. The Ld. A/R also made a categorical submission that the assessee has not incurred any kind of illegal expenditure or expenditure for ulterior objective. Finally, the Ld. A/R also drew our attention to the following decision given by this Bench of ITAT itself in ACIT 4(1), Indore Vs. M/s. Agro Equipment Co. Pvt. Ltd., Indore, ITA No. 49/Ind/2013 order dated 05.01.2017 wherein the assessee made supply to Govt. departments and paid commission to agents, which the Ld. AO disallowed on the same reasoning as in the present appeal. On appeal, this Bench has allowed deduction of commission expenditure by holding as under: 7. We have considered the submissions of both the sides. Looking to the facts and circumstances of the case, we find that in this case the Assessing Officer has disallowed the commission expenses including commission paid to MPLUN of ₹ 14,15,925/-, a Corporation of M.P. State Government enjoying the sole right to convert the intend of purchases. The assessee has shown the commission ranging from 7% to 9% above the commission to MPLUN. The expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and drafts, wherein the identity of each of the agents was also established. It has also been found that the commission was paid exclusively for business purposes only. 4. All these are findings of fact and no substantial question of law, as is required to be formulated for deciding the appeal, arises in the same. The Tribunal has also placed reliance on a judgment of the Delhi High Court reported in CIT vs. Electric Construction Equipment Co. Ltd., [1990] 182 ITR 510, wherein the Delhi High ACIT vs. Agro Equipment ITA Nos. 49/Ind/2013 803/Ind/2014 18 Court dealing with identical question has already decided the matter against the present appellant-Revenue. 8. Therefore, considering the totality of the facts and respectfully following the decision of Jurisdictional High Court, we are not inclined to interfere with the findings of the ld. CIT(A). Accordingly, the appeal of the Revenue is dismissed. The Ld. A/R further submitted that the above decision of ITAT has already been confirmed by the Hon'ble Jurisdictional High Court of M.P., Bench at Indore, in ITA No. 94/2017 Judgement dated 13.04.2018. A copy of the judgement is also placed at Page No. 55 of the Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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