TMI Blog2012 (4) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... ion agent was not genuine – against revenue. - ITA 1281/2011, ITA 1282/2011 - - - Dated:- 18-4-2012 - MR. JUSTICE BADAR DURREZ AHMED, MR. JUSTICE V.K.JAIN, JJ. For the Petitioner : Mr. Sanjeev Rajpal For the Respondent: Mr. Abhishek Arora JUDGMENT BADAR DURREZ AHMED, J. (ORAL) 1. These appeals pertain to the assessment years 2005-06 and 2006-07. The Revenue is aggrieved by the common order dated 29.4.2011 passed by the Income Tax Appellate Tribunal, Delhi Bench, New Delhi. These appeals arise out of the Revenue s appeals before the Tribunal being ITA Nos. 3227 and 3228/Del/09 in respect of assessment years 2005-06 and 2006-07. 2. The common ground raised by the Revenue in both the appeals before the tribunal pertained to the deletion of the addition of Rs.1,75,04,863/- out of the total addition of Rs.1,84,26,108/- made by the Assessing Officer on account of commission claimed to have been paid to various agents in respect of sale of machinery produced by the assessee company. There was a similar deletion made by the Commissioner of Income Tax (Appeals) in the assessment year 2006-07 to the extent of Rs.1,54,21,119/-. 3. Both the deletions made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant year as revenue expenditure u/s 37(1) of the Income Tax Act, 1961 though the same was found to be neither genuine nor required for its business exigencies? 8. The facts of the case in brief are that the assessee has been selling its products which are in the nature of web offset printing machines. These machines are being sold both in India as well as abroad. According to the assessee, these machines are being sold, inter alia, through commission agents. It is also an admitted position that the practice of selling these machines through commission agents has been going on for several years. In so far as the assessment year 2004-05 is concerned, a similar question had arisen as to whether the commission paid to such commission agents would be in the nature of business expenditure, and therefore, would be allowable expenditure in so far as the assessee is concerned, and the same came up for consideration before the Tribunal which held in favour of the assessee. The matter came up before this Court, which confirmed the view taken by the Tribunal and the Special Leave Petition preferred by the Revenue was also dismissed by the Supreme Court. Thus, in so far as the genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There was no commission agent/broker involved in the transactions. 4. Kanak Printers Pvt. Ltd. M/s Printer House Pvt. Ltd. is an established and reputed company in the area of manufacturing printing press in India. Therefore, we shortlist the company for procuring quality product. There was no commission agent/broker involved in the transactions. 5. The Indian National Press (Bombay) Ltd. We short-listed M/s The Printer House Pvt. Ltd. as a reputed manufacturer in the printing machine industry. Earlier we contacted M/s Manugraph Industries Ltd. their rate was higher compared to others, delivery schedule did not suit us according to our time schedule, ultimately we found The Printers House Pvt. Ltd. matched with our all requirement. No commission agent or broker involved in the in deal. 6. Himanshu Printers Publishers As we are very new in this line of activity and going to purchase machinery we discussed with various old printers and publishers of Assam as to which machinery we should purchase for smooth running. Then we came to know from market report that The Printers House Pvt. Ltd., New Delhi is one among the good quality printing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2004-05 were slightly different from the current assessment year i.e., 2005-06 in as much as in this year there was clear evidence produced by the Department to the effect that in respect of some of the sales for which the assessee was claiming that it had paid commission to the commission agents, the buyers had categorically and in writing informed the Assessing Officer that no commission agents were involved. The onus had shifted on the assessee to explain as to how it had claimed business expenditure in respect of such sales to the said seven buyers. Unfortunately, for the assessee, it has not been able to discharge that burden as no explanation whatsoever was tendered by the assessee in this regard. Consequently, the only conclusion that can be arrived at in so far as the said seven buyers are concerned is that there was no commission agent involved in the transactions with them. As a result, any amount paid by way of commission to persons in respect of these seven buyers cannot be regarded as business expenditure, and therefore, the same would not be allowable as Revenue expenditure under Section 37(1) of the Income Tax Act, 1961. 12. In so far as the other payments b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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