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TMI Blog2012 (4) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... 06-07. 2. The common ground raised by the Revenue in both the appeals before the tribunal pertained to the deletion of the addition of Rs.1,75,04,863/- out of the total addition of Rs.1,84,26,108/- made by the Assessing Officer on account of commission claimed to have been paid to various agents in respect of sale of machinery produced by the assessee company. There was a similar deletion made by the Commissioner of Income Tax (Appeals) in the assessment year 2006-07 to the extent of Rs.1,54,21,119/-. 3. Both the deletions made by the Commissioner of Income Tax (Appeals) have been confirmed by the Tribunal by virtue of the impugned order dated 29.4.2011. Being aggrieved thereby, the Revenue is in appeal before us in the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion for effecting sales of its product during the relevant year in comparison to the previous year? III. Whether the order of the ITAT in the present case impugned before this Hon'ble Court is not perverse?" 6. We have heard counsel for the parties at length and with their consent, we propose to dispose of these appeals at this stage itself. Assessment Year 2005-06: 7. We shall first take the assessment year 2005-06. In so far as this year is concerned, we feel that the substantial question of law which does arise for our consideration is the following: "Whether the assessing officer was not right in disallowing the payment of Rs.1,84,26,168/- by the respondent as commission on sales for the relevant year as revenue expenditure u/s 37(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year in question i.e., 2005-06 there was a difference on facts which has not been noticed by the Tribunal and it is for this reason that the finding of the Tribunal is based on no evidence. It was contended by the learned counsel for the Revenue that there were seven buyers who had stated categorically before the Assessing Officer in their written responses that in the transactions of purchase made by them of the web offset printing machines from the assessee, no commission agent was involved. 9. This fact is stated in the assessment order in paragraph 5.2 thereof. The said paragraph reads as under: "5.2 In order to ascertain fact of services from buyers, summons u/s 131 of Income Tax Act were issued to the Buyers with a request to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procuring quality product. There was no commission agent/broker involved in the transactions. 5. The Indian National Press (Bombay) Ltd. We short-listed M/s The Printer House Pvt. Ltd. as a reputed manufacturer in the printing machine industry. Earlier we contacted M/s Manugraph Industries Ltd. their rate was higher compared to others, delivery schedule did not suit us according to our time schedule, ultimately we found The Printers House Pvt. Ltd. matched with our all requirement. No commission agent or broker involved in the in deal. 6. Himanshu Printers & Publishers As we are very new in this line of activity and going to purchase machinery we discussed with various old printers and publishers of Assam as to which machinery we shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this account are not for the purposes of business and are to be disallowed. The commission paid by the assessee on above sales is thus disallowed and added to taxable income." 10. As indicated in the said extract from the assessment order, the assessee had been confronted with this fact by a letter dated 20.12.2007 but no explanation has been tendered by the assessee in this regard. It is on the basis of this that the Assessing Officer came to the conclusion that the expenses booked by the assessee on this account were not for the purposes of business and were to be disallowed in as much as in point of fact there was no agent involved in the sale transactions. 11. In so far as this aspect of the matter is concerned, we find that the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n are concerned, there is no evidence which has been produced by the Revenue to indicate that they were not actually paid by way of commission in connection with their respective sales of machinery. Therefore, the conclusion on facts arrived at by the Commissioner of Income Tax (Appeals) as well as the Income Tax Appellate Tribunal to this extent cannot be faulted. However, in so far as the amounts paid by way of commission in respect of the said seven buyers are concerned, the same would have to be disallowed as business expenditure and would have to be added to the income of the assessee for the assessment year 2005-06. This exercise has to be done by the Assessing Officer. Therefore, to this extent, the question is answered in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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