9911796707
TMI Blog1981 (7) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... s the general rate of sales incentive was 6 per cent for matured business of about Rs.50,000, the assessee had paid such incentive at 8 per cent to M/s. Nirankari Auto Engg. Works which was found to be a sister concern. The payment was, therefore, considered by the IAC (Asst.) to be excessive and it was held that the normal incentive being 6 per cent, only that much should have been allowed to the above party and the balance of 2 per cent was held to be excessive. 3. Before the assessing officer, it was explained by the assessee that the assessee had been allowing cash discount of 4 per cent to other customers but this had not been allowed to the sister concern. The assessing officer wanted to know the terms and conditions under which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. It was submitted that if cash discount was the basis for allowing a higher sales incentive there was no reason incentive has not been allowed to M/s. Punjab Tractors Ltd. It was further pointed out that the terms for allowance of cash discount or for incentive to the assessee was not made available to the assessing officer. It was, therefore, contended that the higher payment was for reasons other than business and it was hit by the provisions of s. 40A(2). 6. On behalf of the assessee, it was submitted that a cash incentive of 8 per cent had been claimed and allowed in the past and never it was found to be excessive. It was also submitted that the incentive has not been allowed on all sales but only on a part of sale which was appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of tenders. Having regard to the totality of the circumstances, we do not find that the payment of 8 per cent incentive to M/s. Nirankari Engg. Works was excessive considering the services rendered by them and the relationship between the two concerns. 8. The next ground in the departmental appeal is against the allowance of weighted deduction under s. 35B in respect of expenses aggregating to Rs. 36,583. The assessee was manufacturing axles and the total export in the year was 9 per cent of its sales. The CIT(Appeals) found that Rs. 2,411 had been paid as subscription to Engg. Export Promotion Council and to Export Market and Management. These expenses were incurred for obtaining information regarding the foreign market and is covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(Appeals) has not tried to find the nature of other expenses and allowed weighted deduction merely on ad hoc basis. Objection was also raised to the allowance of weighted deduction on agents' commission. 9. On behalf of the assessee objection has been taken to the percentage of 9/400 fixed by the CIT (Appeals) regarding the total expenses of Rs. 15,16,523. According to the ld. Counsel, the percentage should have been much higher and it was submitted that the CIT (Appeals) should have allowed deduction on 9/200 of the above expenses even following his calculations. 10. We have considered the facts of the case. We consider that CIT(Appeals) was right in allowing weighted deduction in respect of expenses by way of subscription to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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