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TMI Blog2023 (2) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-2023 - SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER For the Assessee : Shri Yogesh Shah , A. R. Shri Darshin Haji , A. R. For the Revenue : Shri Urjit Shah , Sr. D. R ORDER The captioned appeals have been filed at the instance of the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-8, Ahmedabad on various dates arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as the Act ) relevant to the Assessment Years 1993-94 to 1996-97 respectively. 2. The following grounds of appeal are raised by the Revenue : 1. The Ld. CIT(A) has erred in law and on facts in not providing reasonable opportunity to the Assessing Officer despite categorical directions of the Hon ble ITAT to its effective vide its order ITA No. 846/Ahd/1998 for A.Y. 1993-94 dated 25.08.2006 (Para No. 6 of Page 4) 2. The Ld.CIT(A) has erred in law and in fact by simply relying on the decision in the appellant s own case for A.Y. 1992-93 whereas the Hon ble ITAT had pointed out in the aforesaid order that the principle of res judicata is not applicable and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies with CIT(A)-8 Ahmedabad. The only issue remaining adjudication by the CIT(A) is relatable to the disallowance of commission paid to the sole agent M/s L G Doctors Associates P Ltd. The assessing officer had disallowed the entire amount of the claim of such expense of Rs1,31,65,441/- based on the findings made in AY 1992-93 and specifically as that case was in Gujarat HC to keep the issue alive. With respect to the case of AY 1992-93, in the second round of appeal (cross) the issue was decided in favour of the appellant by the ITAT Ahmedabad vide order dated 16.12.2009 in ITA 797/Ahd/2007. Against this order the Department filed an appeal before the Gujarat High Court which in its order dated05.12.2011 in Tax Appeal No. 1277 of 2010,Tax Appeal No. 1278 of 2010 declined to interfere with order of the ITAT. The Hon'ble HC held: Revenue is in appeal against the judgment of the Tribunal dated 16.12.2009 By the said common judgment, the Tribunal disposed of two cross-appeals, one by the Revenue and another filed by the assesses. Before taking note of the questions framed by the Revenue in these appeals, brief facts may be recorded. Respondent-assessee is a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horized 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 the assessee. Out of the total claim of Rs. 1.27 crores towards commission paid, he disallowed only Rs. 7.50 lakhs and allowed the rest. Commission of Rs. 7.50 lakhs which the CIT (Appeals) disallowed represented the sales made to eight parties with respect to whom the Assessing Officer believed that such sales were made directly. In further appeal before the Tribunal, the Tribunal reversed the decision of the Commissioner to the extent that the same was adverse to the assessee and thereby allowed the appeal of the assessee and simultaneously the Revenue's appeal was dismissed. The Tribunal took note of seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, but it also does not undertake any other task except to promote the sales of the assessee company. Additionally, the assessee has larger number of customers and the LGDA supports such customers maintains its agents and branches across the country. In view of such complex set up, between the assessee and the LGDA, we are of the opinion that the Tribunal committed no error in accepting the entire commission paid to LGDA. In fact, as already recorded, CIT (Appeals) had restricted the disallowance made by the Assessing Officer from Rs. 1.25 crores as claimed by the assessee to Rs. 7.50 lakhs. Even with respect to some handful of customers, sales might have been made directly, but it cannot be stated that the LGDA was 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 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 noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnected to the A.Y. 1992-93 which has been settled in favour of the assessee, therefore, the judgment delivered by the Hon ble Gujarat High Court in the case of the assessee for A.Y. 1992-93 will squarely be applicable in the case on hand. The relevant extract of the judgment of Hon ble Gujarat High Court has already been reproduced in the finding of the Ld. CIT(A) somewhere in the preceding paragraph. Accordingly, respectfully following the judgment of Hon ble Gujarat High Court in the case of the assessee, we do not find any reason to interfere in the order of Ld. CIT(A). Hence, the ground of appeal of Revenue is hereby dismissed. 7. In the result, the appeal filed by the Revenue is dismissed. Coming to ITA Nos. 514, 492 493/Ahd/2020 A.Ys. 1994-95 to 1996-97 8. The identical issue involved in the case has already been dealt with by us in ITA No. 513/Ahd/2020 for A.Y. 1993-94 and in the absence of any changed circumstances, the same shall apply mutatis mutandis. Hence, the appeals preferred by the Revenue are dismissed. 9. In the combined result, all the appeals filed by the Revenue are dismissed. Order pronounced in the Court on 03/02/2023 at Ahmedabad. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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