TMI Blog2018 (10) TMI 1888X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to demand immediate payment if the conditions given are violated. First Schedule to the Agreement provides that the effective date of MAP Agreement is 01.06.2010 and the maturity date is 31.05.2011. Similarly, there is next Agreement for ₹ 21.25 lac, whose effective date is 1 st July, 2010 and maturity date is 30th June, 2011. Similar is the position in so far as the effective and maturity dates of other two Agreements are concerned. Total amount under these four Agreements comes to ₹ 1,91,65,000/-, which pertains to part of the year under consideration and the remaining part to the subsequent year. The assessee, in turn, is passing over the amount of incentive given under the MAP Agreement to the sub-distributors at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence about the genuineness of transactions of payment to these two ladies. The ld. AR explained the nature of such payments by explaining that some sub-distributors insisted on making payment to these two ladies as a part of their incentive under the MAP Agreement. It, therefore, becomes manifest that such commission is simply a part of the payment made to the distributors which was received by the assessee under the MAP Agreements from Exxonmobil Lubricants Pvt. Ltd. for onward payment to customers. Since the assessee is neither offering the receipt of incentive from Exxonmobil Lubricants Pvt. Ltd., as income, nor payments made to sub-distributors as expense, a part of such payment, termed as commission, to these two ladies cannot, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in creditors list because the amount received was a contractual receipt under Marketing Assistance Programme (MAP) as per Agreement executed between it and Exxonmobil Lubricants Pvt. Ltd. The assessee submitted that this amount was to be passed on to the customers (sub-distributors) as incentive. It was further explained with reference to the MAP Agreement that the assessee was receiving financial assistance as upfront payment on the condition that the same was to be passed on to the customers and no part was to remain with it as income. The assessee still further explained that out of ₹ 1.91 crore and odd, it paid a sum of ₹ 1,29,61,330/- under the MAP Agreement to its sub-distributors after due deduction of tax at source. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on demand immediate payment of an amount equal to the Unamortized Balance multiplied by the Amortization Rate, upon the happening of one or more of the following events: (a) If Distributor ceases to trade; (b) EMLPL terminates the Distributor Agreement for any reason; (c) If EMLPL decides in its sole and unfettered discretion not to renew the Distributor Agreement for any reason; (d) If Distributor breaches this Agreement or the Distributor Agreement, and in respect of a breach capable of being remedied, fails to remedy such breach within 7 days of written notice from EMLPL; (e) If Distributor becomes bankrupt or insolvent, or is unable to pay its debts as they fall due, or enters into any arrangement or composi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith certain conditionalities, such as, the assessee has to provide bank guarantee and there is an obligation to lift the stocks. In case the assessee does not succeed in lifting the stock etc., the proportionate part would not be available to it for onward payment to sub-contractors. The assessee has been consistently following this practice of accounting the amounts under MAP Agreement and the same has been accepted in the assessments completed u/s 143(3) for the two immediately preceding assessment years, namely, 2009-10 and 2010-11. The ld. CIT(A) has recorded a categorical finding to this effect in para 1.6 of the impugned order, which has not been controverted by the ld. DR. In the absence of any factual difference in the manner of rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. for onward payment to customers. Since the assessee is neither offering the receipt of incentive from Exxonmobil Lubricants Pvt. Ltd., as income, nor payments made to sub-distributors as expense, a part of such payment, termed as commission, to these two ladies cannot, therefore, cannot have a different shade from the angle of deductibility. It is further observed that the assessee failed to adduce any evidence of rendering of services by these two ladies, which necessitated it to make such payments. We, therefore, uphold the impugned order on this score. 8. The other two grounds were not pressed by the ld. AR which, therefore, stand dismissed. 9. In the result, the appeals of the assessee as well as the Revenue are dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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