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2020 (2) TMI 1284 - HC - Income TaxCommission paid to Indian resident for booking orders for export - deduction of expenditure u/s 37 (1) - Conclusion of the Tribunal is that to justify the payment of commission the assessee had to prove in every case that the order had been obtained from the agent - Contention of the assessee was that as per the agreement, the assessee was to pay commission on whatever sale was generated within the territory of the agent. The crucial clause in this regard is Clause 4 (supra). The Tribunal held that this clause would not supersede Clauses 1 to 3 and 5. HELD THAT:- In our opinion, the interpretation of the Tribunal is incorrect. Those clauses nowhere stipulates that the assessee is not bound to report to the agent any enquiry which may have received directly or indirectly. From reading of the agreement it is clear that no order can be processed by assessee without services the agent and if that is so, the assessee was bound to pay commission on any sale which was taken place in the territory of an agent (subject to condition 7 supra). In these circumstances, we hold that Clause (4) of the said agreement has wrongly been interpreted by the Tribunal in the facts and circumstances of the case.
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