TMI Blog1996 (10) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... mission' paid to the shareholders and directors of the assessee-company. 3. The assessee-company claimed Kuri incentive commission. This was disallowed by the AO. On appeal, the CIT(A) allowed 50 per cent of the claim. Thus, the assessee was granted relief of Rs. 19,241 for the asst. yr. 1987-88, Rs. 26,738 for the asst. yr. 1988-89 and Rs. 68,440 for the asst. yr. 1990-91 respectively. For the asst. yr. 1991-92, he confirmed the disallowance of Rs. 73,095 under this head made by the AO. Hence these second appeals before the Tribunal. 4. We have heard the learned representative of the assessee, Sri M. Ramdas and the learned senior Departmental Representative, Sri Harilal K. Naick. Their arguments are taken into consideration as also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of existing Kuries no fresh efforts were made for collecting the instalments. Moreover, the incentive commission paid to the shareholders and directors was not for the purpose of business. Therefore, he disallowed this claim. 8. On appeal, the CIT(A) found that the assessee-company would have incurred some expenses by way of payment of incentive commission to persons who have contacted the subscribers for prompt payment of instalments. He held the view that the entire incentive commission need not be disallowed, but disallowance of a portion of the claim was justified to meet the ends of justice. He also gave a finding that in respect of the existing Kuries no fresh efforts are required on the part of the members of the assessee-co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs. 73,095 for the asst. yr. 1991-92. However, we do not want to interfere with the orders of the CIT(A) for the earlier three assessment years, but at the same time, we are not satisfied to allow the entire incentive commission as claimed by the assessee-company, when it has suffered losses continuously. In this view of the matter the assessee fails on the ground of Kuri incentive commission in respect of the asst. yrs. 1987-88, 1988-89 and 1990-91 and partly succeeds on this ground in respect of the asst. yr. 1991-92. 10. However, it would be necessary to mention one more fact here that the decision taken by the Board of Directors of the assessee-company does not appear to be just and proper in consonance with the facts and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33,300 which is about 25 per cent of the total claim. The CIT(A) did not grant any further relief on this count. 12. We have examined the facts in this respect. We have considered the arguments also. For the asst. yr. 1985-86 in ITA No. 819/(Coch)/1988 in the case of the assessee, it had claimed canvassing commission expenses of Rs. 4,52,960. The AO restricted the disallowance on this account to Rs. 2,21,310 and on appeal, the CIT(A) scaled down the disallowance to Rs. 2,00,000. The claim of canvassing expenses were shown under self-made vouchers by the directors and shareholders. The total canvassing commission for the asst. yr. 1985-86 was worked out to 0.44 per cent of the total sale in the case of 28th day monthly Kuri No. 1, 0.98 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s charged to the P L a/c. The CIT(A) has allowed such Kuri bonus in the case of M/s General Kuries and Loans (P) Ltd., Wadakkancherry, Trichur District. A copy of the said order is filed on record. However, Kuri bonus of Rs. 2,756 was only involved in that case and it was allowed as business expenditure under s. 37 of the IT Act, 1961. 15. If a subscriber remits the instalment before the due date, in that event, Kuri bonus appears to have been paid to the subscriber. It also appears to be a business expenditure allowable under s. 37 of the IT Act. We are satisfied to allow this expenditure and not to agree with the view held by the CIT(A) in this regard. The assessee succeeds on this ground for the asst. yr. 1991-92. 16. In the result ..... X X X X Extracts X X X X X X X X Extracts X X X X
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