TMI Blog2005 (6) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... ons Private Limited." 2. Briefly stated the facts relating to the issue involved in this ground of appeal of the assessee are that the assessee has claimed payment of commission of Rs. 2,51,725 to M/s. Multiple Web Solutions Pvt. Ltd. @ 3 per cent on the sales amounting to Rs. 83,90,835. The Assessing Officer on persistent queries to the assessee and on examination of details found that this payment was not in fact a payment for commission, but was a payment for advertisement of the product of the assessee on the website of this company. He also noticed that through this so-called advertisement on the website not a single sale was affected by the assessee. He further noticed that even a single query through E-mail or otherwise regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... After considering these submissions, the learned CIT (Appeals) by passing a detailed order upheld the impugned disallowance made by the Assessing Officer, but mainly on the reasoning that the assessee has failed to establish any nexus between the payment of commission with the sales of the product of the assessee. 4. Before me, the learned authorised representative for the assessee, reiterated the same submissions as were made before the CIT (Appeals) and in addition thereto he relied on his written submissions filed before the Tribunal. 5. On the other hand, the learned Departmental Representative for the Revenue, placing reliance on the reasoning given in the orders of the tax authorities below and further placing reliance on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holly or exclusively for the purpose of business or profession. In this very decision in order to see whether such conditions are fulfilled one of the tests laid down by their Lordships was that the expenditure should have been incurred with a view to bring profits or monetary advantage either today or tomorrow and the other test laid down by their Lordships was where the expenditure was such as a wise, prudent, pragmatic an ethical man of the world of business would conscientiously incur with an eye on promoting his business prospects subject to the expenditure being genuine and within reasonable limits. Another test laid down by their Lordships was that the expenditure must not be unreasonable and out of proportion and lastly, it must not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case, no written agreement pertaining to the terms of payment between the assessee and the website company has been filed on record nor there is any such agreement executed between the parties. The assessee had paid the commission or the advertisement charges to the website company @ 3 per cent of the total sales when not even a single query or sale was affected through the website company on account of the advertisement on the website. The assessee has not been able to explain before us any of the reasons to justify the payment @ 3 per cent of the total sales made to the website in these facts and circumstances. The assessee has also not been able to disclose before me as to what is the intimate connection between the expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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