TMI Blog2006 (3) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... ring of service is concerned, there may not be a written agreement but the circumstances of the present matter strongly establish that without the services of the commission agent the assessee could not achieve such business result as has been achieved by him. The business development expenses are, therefore, fully justified as the rendering of service is proved from the circumstances of the present matter. On going through the entire documentary evidence, filed on record and in particular on appreciating the circumstances of this matter we find force in the submissions of the learned counsel for the assessee and hold that the payment of commission by the assessee was for business purposes and the same was fully justified. We, therefore, set aside the finding of the learned CIT(A) and delete the disallowance of Rs. 12,54,388. Ground is allowed. In the result, assessee's appeal is allowed for statistical purposes only. - HON'BLE P.N. PARASHAR, J.M. AND G.S. PANNU, A.M. For the Appellant : Ved Jain and Rama Jain. Advs. For the Respondent : Shantanu Dhamija, Adv. ORDER P.N. Parashar. J.M.: 1. This appeal, filed by the assessee, arises out of CIT(A)'s order dt. 28th March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the learned CIT(A) it was submitted that the amount of Rs. 12,54,388 was paid to Mr. Vakil, proprietor of M/s Associated Projects Marketing for helping the assessee in securing J K Government tender for supply of school uniform cloth and ensuring timely supplies thereof and also for securing timely payment. It was contended that as per the understanding with the payee it was agreed that the assessee will pay business development fee @ 2.5 per cent of the value of supplies made against all Government tenders which matured through M/s Associated Projects Marketing. It was pointed out that the assessee made supplies worth Rs. 5,01,75,520 in a period of less than 2 months and various activities including approval of quality, quantity and quick realization of payments were all looked after by M/s Associated Projects Marketing in whose favour the assessee had also executed authority to represent it. Regarding lack of written agreement between the assessee and Mr. Vakil, it was submitted that the assessee was looking for some business opportunities for its survival and therefore it could not press Mr. Vakil for any written agreement. The assessee also highlighted certain additional fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrespondence to the Financial Advisor and CAO, Education Department, Civil Secretariat, Govt. of J K, Jammu was made under due intimation to Shri Vakil to whom letters were faxed for looking after the interest of the assessee. According to the learned counsel, a certificate has been given by Union Bank of India for showing that the demand draft No. 1035695, dt. 30th March, 1998 for a sum of Rs. 6 lakhs favouring M/s Associated Projects Marketing, payable at J K was given by the assessee which was duly debited in the account of the assessee. In this regard also our attention was invited to the certificate dt. 3rd Feb., 2001 available at p. 42 of the paper book. The learned counsel also drew our attention to various documents which related to the supply of the material, transportation of the material and receipt of the amount. He also argued that if the agent was not assessed to tax then the assessee should not be made to suffer on that basis. It was also pointed out by him that assessee went right to produce Mr. Vakil but it was not possible and if the learned CIT(A) wanted to examine him, she could have directly summoned him. He also pointed out that the payment was made through b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government through banking channel. The agent also received the payment through banking channel; (3) The agent was duly authorized by the assessee in writing to act on his behalf; (4) The letter was also obtained and the same was tiled by the assessee before the AO; (5) The agent received a sum of Rs. 6 lakhs during this year through bank draft from the assessee; (6) The amount was duly debited in the account of the assessee; 9.1. In the light of the above facts and circumstances, which have been pointed out by the learned counsel for the assessee, a strong presumption and inference can be drawn that the assessee could not have been able to procure business from Government offices of J K without the help, assistance and guidance from the agent who was locally stationed at Srinagar. Although the confirmation was received through fax but the genuineness of the document cannot be doubted. If the AO or the learned CIT(A) had any doubt regarding the authorship of the letter or contents thereof, etc., then the Department could have directly summoned Mr. Vakil whose address was also given by the assessee. 9.2. In view of the above circumstances, the supply of the goods by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for securing the tenders, in making negotiations with the concerned officers in ensuring timely supplies and in getting the release of payment. The assessee has filed confirmation of Shri Vakil through which not only receipt of the payment is confirmed but it is specifically written that the amount has been received as introduction fee/business development for the supply of school uniforms cloth. It is also mentioned in this letter that the fee was charged and received by him for guiding the assessee in the matter of participating in the business, making timely supplies in securing full payments. From this certificate also it is clear that the agent had rendered services to the assessee. The assessee had also endorsed copies of the correspondence made by it to various authorities in J K, which is evident from the reference on the photocopies filed before us. The assessee had also executed authority letter in favour of Shri Vakil which is available at page No. 32 of the paper book, filed before us. The assessee has written letters dt. 9th Jan., 2002 and 4th Feb., 2002 to Shri Vakil requesting him to appear before the learned CIT(A). On these letters, the address is also the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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