TMI Blog2012 (3) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent by : Shri C.G.K.Nair O R D E R PER D.K.AGARWAL (JM) This appeal preferred by the assessee is directed against the order dated 4.2.2011 passed by the ld. CIT(A) for the Assessment Year 2007-08. 2. Briefly stated facts of the case are that the assessee firm is engaged in the business of manufacturing of al l types of stone cutting tools, filed return declaring total income of Rs.76,25,059/-. However, the assessment was completed at an income of Rs,.1,07,31,740/- including part disallowance of deduction u/s 80IB on interest and sales tax incentive and disallowance of commission u/s 40A(2) of Rs.14,00,520/-, vide order dated 29.12.2009 passed u/s 143(3) of the Income Tax Act, 1961 (in short the Act). On appeal, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Tribunal . 7. On the other hand, the ld. DR supports the order of the AO and the ld. CIT(A) 8. We have carefully considered the submissions of the rival parties and perused the material available on record. We find merit in the plea of the ld. Counsel for the assessee that the issue is squarely covered in favour of the assessee by the order of the Tribunal in assessee s own case in M/s Diamond Tool Industries V/s J.C.I.T. Circle 24(3), in ITA No. 136/Mum/2009 (Asst Year 2005-06) dated 14.12.2011, wherein the Tribunal on the similar facts and circumstances of the case has held vide para 6 of its order as under : 6. We have considered the rival arguments made by both the sides, pursued the orders of the Assessing Officer and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue, we respectfully following the order of the Tribunal (supra) direct the AO not to exclude sales tax incentives from the profit of the units while calculating the deduction u/s 80IB of the Act. We hold and order accordingly. 10. As regards, the denial of deduction u/s 80IB on interest of Rs.43,653/-, we find that in the immediately preceding assessment year i.e. assessment year 2005-06, the assessee did not press the ground related to the denial of deduction u/s 80IB on interest received and hence the Tribunal has rejected the said ground raised by the assessee. Respectfully following the same view and keeping in view the rule of consistency, we reject the claim of the assessee with regard to the denial of deduction u/s 80IB of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company are more than those provided by the other agents further submitted that the said company is separately assessed to tax and also relied on the decision in CIT V/s Indo Saudi Services (Travels) P. Ltd. 310 ITR 306(Bom), wherein it has been held that no such disallowance is to be made u/s 40A(2)(b) in respect of payment made in the relatives and sister concern where there is no attempt to evade tax. However, the AO did not accept the assessee s submissions. The AO after comparing with the commission paid on sales to other partiesdisal lowed the payment of commission in excess of 2.5% i.e. Rs.14,00,520/- and added the same to the income of the assessee. On appeal, the ld. CIT(A) while holding that simply because the services render ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO is reasonable and accordingly partly allowed the claim of the assessee vide finding recorded in paragraph 10 of its order which is reproduced as under : 10. We have considered the rival arguments made by both the sides, pursued the orders of the Assessing Officer and the CIT(A) and the paper book fi led on behalf of the assessee. The only dispute in the impugned ground is regarding the allowability of the commission paid to M/s Shatul Commercial Co. Pvt. Ltd. at 3.75% of the turnover as against 2.5% in the preceding year. There is no dispute to the fact that M/s Shatul Commercial Co. Pvt. Ltd. is a related party. It is the case of the Revenue that when the rate of commission ranges from 1.5% to 3% in case of un-related parties, higher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sales effected was Rs. 869 lacs has been paid commission @ 3.75% commission. From the analysis made by the A.O. in the body of the assessment order, we find the commission paid to unrelated parties ranges from 1.5% to 3% whereas commission in the case of related party is 3.75%. Even assuming that the related party has rendered some extra services such as giving market information feedback regarding changing trends as well as commercial information etc. and giving services on al l India basis still such huge increase in the rate of commission appears to be in higher side. Considering the total ity of the facts of the case and considering the fact that the commission to un-related parties varies from 1.5 to 3%, therefore, payment of commis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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