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MIL CONTROLS LTD Versus THE ADDL. COMMISSIONER OF INCOME TAX, RANGE 1, KOCHI.

2015 (12) TMI 829 - KERALA HIGH COURT

Method of accounting of commission expenses on accrual basis - Held that:- As per clause 4 of the agreement, the commission payable to KSB Singapore (Asia Pacific) at the rate not exceeding 12.5% on FOB value of the order in the currency in India in which the order is placed. These charges will fall due for payment on receipt of payment from the clients. Being so, it is clear that the payment of commission accrued only on realization of sale value. The assessee's claim is that it is booking expe .....

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sale value and it is to be allowed when the realization of sale value which is in compliance with the agreement cited supra and disallowance is based on the above agreement brought on record by the authorities and hence, we do not find any infirmity in the orders of the authorities below, which is confirmed.

No reasons warranting interference with the order passed by the learned Appellate Tribunal by invoking the powers conferred on us under Sec.260A of the Income Tax Act, 1961 and n .....

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al of the appeal are only narrated. The assessment concerned is of the year 2009-2010. The assessee had filed return of income on 30.09.2009 for the year 2009-2010 declaring taxable income of ₹ 18,36,08,783/-. The said return was processed under Sec.143(1) and thereafter the said case was selected for scrutiny and notice under Sec.143(2) was issued on 31.08.2010. Further, a notice under Sec.142(1) was also issued on 31.01.2011 calling for information and the case was heard on various dates .....

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tual debit and not ₹ 77,32,218/-. In answer to the query, the assessee stated that as per accrual system of accounting, the commission had become due and hence the debit of ₹ 77,32,218/- and further that the commission is based on sales and becomes due only as and when the proceedings are completed. 2. According to the assessee, the actual remittance alone should be debited in the Profit & Loss Account, since that is the amount accrued and due on account of commission, and that t .....

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dated 21.11.2014, the 1st appellate authority confirmed the addition made by the assessing officer amounting to ₹ 31,06,189/-. Aggrieved by the same, appellant preferred an appeal before the concerned Tribunal, which also affirmed the order in appeal in favour of the revenue. 4. Heard the learned counsel for the appellant and the Senior Standing Counsel appearing for the respondent. We also perused the records and evaluated the facts and circumstances of the case and appreciated the legal .....

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ting followed by appellant in the past years? . 6. The learned Tribunal after evaluating the entire facts and circumstances of the case has confirmed the order of the lower authority, holding that there is no infirmity in the order passed by the authorities below and held as follows in the last paragraph of the order: We have heard the parties and perused the relevant material on record. We have also gone carefully gone through the order of the authorities below and also the agreement entered be .....

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