9911796707
TMI Blog2013 (12) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... wise adjudication is given in the succeeding paragraphs. Firstly, we shall take up assessee's appeal and the grounds raised by the assessee read as under: "Ld CIT (A) of has erred in confirming disallowance of Rs. 15,80,832/- out of Rs. 52,69,440/- paid to M/s. Media World Enterprises for purchase of "Kaldarshika" calendars on the ground that payment made by the assessee is excessive and unreasonable. On the basis of facts and circumstances of the case, the said disallowance made ought to be deleted. 2. Ld CIT (A) has erred in confirming disallowance of professional charges of Rs. 3,60,000/- paid to Mrs. Ashoo Darda on the ground that no documentary evidence is furnished in support of services rendered. On the basis of facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel requires many inputs, material and specialized knowledge which can be done only by certain persons having the expertise. The calendar gives much information for use of Hindu public. It is not the case of the Revenue that all these information and material of the calendar were furnished by the assessee. Paying Rs. 2 in excess per calendar, for getting advertisement in about more than 10,00,000 pieces is justifiable. In any event, when both, Media World Enterprises and the assessee company are paying tax at the very same marginal rate, the question of the assessee's diverting the profits does not arise. There is no loss to Revenue. Hence, for all these reasons, ground no.1 raised by the assessee for the assessment year 2005- 2006 is allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in para 32 to 37 for the assessment year 2006-2007 in the above referred order of the Tribunal dated 16.3.2012 where ground of the assessee was allowed on the basis of 'principle of consistency'. Para 37 is relevant in this regard and the same is perused which reads as under:- "37. After hearing rival contentions, we find that both Mrs. Ashoo Darda and Mrs. Sheetal Darda, are well educated and experienced in the field of services that they are to render. Both of them are paying tax at a maximum marginal rate, though the income from the group is only Rs. 85,000/- and Rs. 3.30 lakhs respectively. Evidence in the form of photographs of events conducted have been produced before the Commissioner (appeals), copies of which are placed at pages ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of Rs. 2,37,70,518/-. Assessee claimed same as recovery commission paid to (MEPL) M/s. Media Experts Private Limited (associate concern). AO disallowed the same for want of evidences. 10. At the outset, Ld Counsel brought to our notice and mentioned that an identical issue was adjudicated by the Tribunal in the above referred order for the assessment year 2005-2006. In this regard, para 18 and 19 are relevant and the same are reproduced here under: "18. After hearing rival contentions, we are of the opinion that the allegation that the transactions is a colourable devise, is unfounded. From the figures given , it can be seen that the rate of tax is same for both the MEPL and the assessee company. Thus, there is no advantage that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veyance, rent, telephone, office, etc stood incurred by MEPL. Considering all the relevant facts, it cannot be disputed that MEPL had actually rendered services relating to recovery, marketing, billing, collection of advertisement. There was no cogent basis for the AO's remark that MEPL had not rendered services to the appellant company. (The reasons as given by the AO for the disallowance that the nature of the work was not clearly spelt out or infrastructure was provided by the appellant or MEPL was lacking independence or was not experienced in the line were of trivial nature and on the basis of such insignificant reasons, even if they had some substance, it cannot be held that the claim of payment of commission to the associated concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction, the fact that the payment of commission to MEPL under identical facts stood allowed in earlier assessment years also had considerable weight in favour of the appellant. The AO had failed to make out a case that the payment made by the appellant company was either excessive or unreasonable. Therefore, this could not be a case fit for disallowance u/s 40A(2)(a) of IT Act. Accordingly, in view of the above discussion and case law, I hold that the AO was not justified to disallow the payment of recovery commission at Rs. 157.82 lacs. Thus the disallowance made by the AO is hereby deleted. This ground of appeal is allowed. 19. In view of the above discussion, the grounds raised by the Revenue are dismissed." 11. Ld Counsel read out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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