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2014 (7) TMI 1247 - AT - Income TaxDisallowance of payment of commission - Held that:- The assessee is manufacturing of current and potential transformers & electrical control equipments. The appellant had been assisted by M/s Sadem India Ltd., Bhiwadi to execute the tender of various electricity boards. The genuineness of the payments in form of commission has not been doubted by the Revenue. The TDS has been deducted and paid to the government exchequer. The documents filed by the appellant before the lower authority supported that M/s Sadem India Ltd. has rendered service to the appellant by providing information of tender, attending the tender on behalf of the appellant, liaisoning with the various electricity boards, helping in recovering the payments, providing number of tenders, providing experience with the government department etc. The appellant had submitted all the details before the Assessing Officer to prove the services rendered by M/s Sadem India Ltd., which has not been controverted by the Revenue. The agents have rendered the services like procurement of orders, ascertaining the quality, timely payment etc. The recipient has declared the commission in his return of income and has confirmed to have rendered the services to the assessee. In the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. and has rightly directed to enhance the allowance of deduction u/s 80IB of the Act. Deduction u/s 80IB on interest on Bank FDRs - Held that:- The FDRs were made for providing bank guarantee to the Electricity Board. Apparently, the interest on FDRs directly connected with the industrial undertaking. Even the assessee’s argument of netting of interest income is accepted. It automatically increased the profit of the assessee undertaking and the deduction U/s 80IB of the Act is also increases. We find that FDRs were made for business purposes and for getting the tender from the Electricity Board and income from interest income is directly connected with the industrial undertaking. Therefore, we confirm the order of the learned CIT(A). Accordingly, we dismiss the Revenue’s appeal on this ground.
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