Home Case Index All Cases Income Tax Income Tax + SC Income Tax - 2017 (7) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (7) TMI 1014 - SC - Income TaxEntitled to weighted deduction in terms of the provision of Section 35B(1)(b)(iv) - appointment of agent - High Court [2005 (8) TMI 107 - ALLAHABAD High Court] rejecting the claim of the assessee, observed that at no stage, the assessee had put up a case that it had maintained branch or agency outside the country - Held that:- No doubt, the assessee was not maintaining any branch office. However, the case of the assessee was that Mr. Jack Barouk was appointed as his agent. It was the specific case made out by the assessee right from the stage of the assessment proceedings and was specifically argued before the ITAT, as mentioned above, which was accepted by the ITAT. Referring to agreement entered into between the assessee and Mr. Jack Barouk it is in the form of communication dated 24th October, 1977 addressed by Mr. Jack Barouk to the assessee stating therein the terms and conditions on which two parties agreed to work together. In this communication, Mr. Jack Barouk agreed to keep the goods of the assessee in his godown, show the said products to the visiting customers personally and secure orders from the territories mentioned therein namely, Benelux and France. This communication further states that he will be given 5% commission on all goods shipped by the assessee to the aforesaid territories on the orders procured by the said Mr. Jack Barouk. The assesseee had accepted and agreed on the aforesaid terms contained in the said communication and there is a specific endorsement to this effect by the assessee that the said communication, on acceptance by the assessee, became a valid and enforceable agreement between the parties. The aforesaid terms clearly state that Mr. Jack Barouk had agreed to work as an agent of the assessee and on the orders procured he was to get 5% commission. This aspect that the agreement was in fact an agency agreement stands conclusively established by the registration given by the Reserve Bank of India vide its letter dated 29th October, 1977. Captioned communication of the Reserve Bank of India reads as “Registration of Selling Agency Arrangement”. Thus, while giving its accord to the arrangement established between the parties it was termed as an agency arrangement. Thus, no hesitation in coming to the conclusion that Mr. Jack Barouk was an agent of the assessee and, therefore, all the conditions stipulated in Section 35B(1)(b)(iv) for giving weighted deduction of expenditure incurred by the assessee stands established. We, thus, allow this appeal and set aside the impugned order of the High Court and restored of that ITAT. - Decided in favour of assessee.
|