TMI Blog2014 (6) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses claimed by the assessee for the purpose of business cannot be treated as post sales expenses and observations and findings of the Assessing Officer are not correct and justified in this regard and we set aside the same to this extent only – relying upon GE India Technology Centre Private Ltd. Versus Commissioner of Income Tax & Anr. [2010 (9) TMI 7 - SUPREME COURT OF INDIA] followed – thus, Circular No. 715 dated 8.8.95 is not applicable. The AO concluded the assessment n contradictory finding because on the one hand, the AO has considered gross sales realized value in USA as sales of the assessee for the financial year under consideration and on the other hand the AO held that the export sale was completed when the consigned goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is aggrieved by the action of Ld. CIT(A) by which he had deleted the disallowance of Rs.4,78,76,044/- made by the Assessing Officer on account of USA expenses. The Assessing Officer had relied on the similar disallowance in assessee s own case in assessment year 2006-07 and 2007-08. 3. In the second ground, the grievance of Revenue is regarding deletion of a sum of Rs.2,70,959/- by Ld. CIT(A) which the Assessing Officer had made on account of late deposit of ESIC and PF. 4. At the outset, the Ld. A.R. submitted that the first grievance of the Revenue is covered in favour of the assessee by the order of the Tribunal in the case of the assessee itself for the assessment year 2005-06. In this respect, our attention was invited to paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and the remuneration of the consignment agent was fixed @9.05% of the sales made in USA by Global Reliance Inc. as per terms of the subsequent agreement dated 30.03.2004 (Paper Book page No. 7) to regulate and monitor the same remain within the budgeted cost allocation which is a prudent business decision of the assessee to control the expenses incurred by consignment agent. The AR also contended that the department should follow the rule of consistency as per decision of Hon ble Supreme Court in the case of Excel Industries (supra). 16. The AR also placed reliance on the decision of Hon ble Supreme Court of India in the case of GE India Technology Centre P. Ltd. vs Commissioner of Income Tax (2010) 327 ITR 456(SC) and decision of Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the assessee and Global Reliance Inc., we clearly observe that the expenses incurred on behalf of the assessee by its consignment agent M/s Global Reliance Inc, the entire expenses claimed by the assessee were related to marketing and sales expenses and as per clause 03 of the first agreement dated 19.9.2002, the assessee was responsible for all costs, taxes and other tax expenses relating to the import from India to USA and sale of products made by Global Reliance Inc. including custom duty, ocean freight and land freight of USA, warehousing expenses in USA and other general and administrative expenses including USA Salaries payments, Telephone Expenses, Travelling Expenses, Staff Education and Medical Expenses, Courier Expenses, Web Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee that out of the gross sales realized in USA was declared as turnover by the assessee in the final account and US expenses were also claimed separately therein. 20. In view of our above observation made in earlier para, we hold that the Assessing Officer concluded the assessment n contradictory finding because on the one hand, the Assessing Officer has considered gross sales realized value in USA as sales of the assessee for the financial year under consideration and on the other hand the AO held that the export sale was completed when the consigned goods left the Indian Customs Border and all expenses incurred thereafter were post sale expenses. Accordingly, we are inclined to hold that first part of findings of the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and circumstances of the case, Circular No. 715 dated 8.8.95 is not applicable to the present case. 23. Coming to the issue of consistency, we clearly observe that the Commissioner of Income Tax(A) has granted relief to the assessee in the AY 2003-04 pertaining to the same claim of the assessee and we are unable to see any valid reason to interfere with the same in the impugned order. Under these circumstances, we are inclined to hold that the department does not have any valid reason to take a different stand on this issue which the Commissioner of Income Tax(A) has taken in favour of the assessee for AY 2003-04. 24. In the result, we hold that the Commissioner of Income Tax(A) has granted relief for the assessee on reasonable, jus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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