9911796707
TMI Blog2011 (12) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... s, brief facts may be recorded. Respondent-assessee is a company registered under the Companies Act and is engaged in the business of manufacturing maze products. For the year under consideration i.e. previous year to the relevant assessment year 1992-93, the assessee had claimed deduction of an amount of Rs.1.27 crores (rounded off) towards commission paid to the sole selling agent. The Assessing Officer disallowed the entire claim holding that the said sole selling agent had not rendered any service. The commission paid, therefore, could not be claimed deduction of. The assessee carried the order of the Assessing Officer in appeal. CIT(Appeals), allowed substantial portion of the claim of the assessee and restricted the disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the parties directly from the assessee. For the delay in making the payments, no penalty was levied from LGDA though the agreement provided so. He also noted that LGDA was not authorized to negotiate the price with the purchasers. However, one Shri Vinodbhai Soni who was an employee of LGDA had done so. With respect to eight individual companies, he recorded the statement of representatives of such purchasers, who stated that LGDA had not contributed to the sale made by such purchasers from the assessee. According to the Assessing Officer, the cumulative effect of such factors would be that entire commission paid to LGDA was required to be disallowed. In appeal, the CIT(Appeals), however, allowed substantial portion of the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrangement and in fact, the High Court had confirmed the view of the Tribunal. Additionally, we also notice that the assessee had large number of customers. In fact, it was pointed out before the Revenue authorities as well as the Tribunal that the assessee had more than 2000 customers. The Assessing Officer had examined only eight of them and found that direct purchases were made. It was on this basis that the Tribunal upheld the arrangement even with respect to such eight parties believing that the assessee might have interacted directly with a handful of customers for very many reasons. Additionally we also find that the assessee had brought to the notice of the Revenue authorities that it does not have any sales agent other than th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not entitled to commission qua the sales made to such agents. LGDA was the sole selling agent and was responsible for the promotion of sales. In the process, services rendered could not have been bifurcated as rightly done by the Tribunal vis-a-vis a handful of customers as against more than 2000 customers whose requirements the LGDA would be satisfying. In the result, we are of the opinion that the Tribunal's order requires no interference. We may notice that the Tribunal relied on number of decisions of this Court and other courts to examine the nature of allowability of the claim made by the assessee. However, even on facts, we find that the Tribunal is justified in accepting the claim of the assessee, we do not find it necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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