9911796707
TMI Blog2008 (7) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... commission by the assessee to a private limited company where its partners were directors is valid in law, when there is no evidence to show that the company had in fact rendered any service ?" 2. The brief facts are as follows: The assessee is a registered partnership firm consisting of two partners. It is engaged in the business of purchase and sale of paper and boards. The assessment year is 2001-02 and corresponding accounting year ended on March 31, 2001. The assessee has filed a return of income on October 31, 2001, admitting the total income of Rs. 25,25,883. The same was processed under section 143(1) of the Income-tax Act. Later on, notice under section 143(2) of the Act was issued and served on the assessee on October 30, 2002. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a sum of Rs. 19,51,465 to M/s. Rose Flower Co. Papers P. Ltd., Sivakasi, on account of commission. The assessee has also filed evidence to that effect that there was an agreement entered into between the assessee-firm and M/s. Rose flower Co. Papers P. Ltd. on April 1, 1999. It is seen from the records that the appellant-firm was managed by the partners, who do not have adequate expertise in the area of product quality, etc. Under these circumstances, the services of the said M/s. Rose Flower Co. Papers P. Ltd. was engaged for promoting sales of its products by making personal meetings with customers, mills, etc. Further, the assessee has filed a details regarding volume of business and profitability increased substantially between 1989-9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 and 1.50 per cent. for the period under appeal on a turnover of Rs. 9,93,51,290 and Rs. 13,00,97,698 respectively. 6. The Tribunal also after considering the materials on record, confirmed the order of the Commissioner of Income-tax (Appeals) had held as follows: "The learned Departmental representative (DR) strongly relied on the findings of the learned Commissioner of Income-tax (Appeals) supported by the decision of the hon'ble Supreme Court in the case of S.A. Builders Ltd. v. CIT [2007] 288 ITR 1 and contended that the commission payment is reasonable and it is necessary for the business and it is the fact that the assessee got the services of the marketing agents for marketing activities on commission basis with a view to promot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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