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2016 (9) TMI 847 - ITAT MUMBAIDisallowance of expenditure - payment of Agency Commission to sister concern - whether excessive or unreasonable - Held that:- As decided in assessee’s own case and in the case of the assessee’s sister concern there is no dispute about the fact that the assessee availed the services of the foreign agent in respect of exports effected by it, as was apparent from the GRs. This fact was also approved by the RBI. Despite the payment of commission at l0% to a person, who is unrelated to the assessee, the gross profit as well as the net profit of the assessee saw substantial increase in terms of amount as well as percentage. The fact that the assessee did pay commission to its foreign agent has been acknowledged by the AO as is apparent from his decision in restricting the deduction to 2.88% of the turnover. Once the commission is accepted to have been paid, there is no logic in disallowing such expenditure by holding that it was excessive. It is for the assessee to determine the way in which it has to carry on its business. The assessee has to decide the percentage of commission which is to be allowed by him considering all the attending circumstances and the business exigencies. In our considered opinion, the ld. CIT(A) was justified in deleting this addition - Decided in favour of assessee
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