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TMI Blog2016 (12) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case, briefly, are as under: - 2.1 The assessee is a company engaged mainly in the business of trading in export of electrical goods and appliances. For A.Y. 2003-04, the assessee filed its return of income on 27.11.2003 declaring total income of Rs. 90,14,086/-. The return was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was taken up for scrutiny. The assessment was completed under section 143(3) of the Act vide order dated 28.02.2006 wherein the total income was determined at Rs. 97,42,780/-. Proceedings for reassessment were initiated under section 147 of the Act and after recording reasons for belief in respect of the assessee's income which had escaped assessment on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the action of the Deputy Commissioner of Income-tax in re-opening the assessment under section 148. 2. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the action of the Deputy Commissioner of Income-tax in disallowing an amount of Rs. 2,33,389/- out of commission paid in respect of exports made to Iraq." 3.2 Assessment Year - 2005-06 1. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the action of the Deputy Commissioner of Income-tax in disallowing an amount of Rs. 37,44,597/- out of commission paid in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003-04 and 2005-06, the assessee company exported goods to Iraq under the UNO 'Oil for Food Scheme' and in this connection had paid commission to its agent M/s. Winter International Ltd., Jordan for providing services to them and realization of export proceeds such as: - (a) Informing the assessee company about new tenders which are issued in Iraq; (b) Arranging documents required for submission of tender application; (c) Application made for tenders; (d) Tender participation in Iraq; (e) Procurement of orders; (f) Obtaining LC on behalf of the assessee company; (g) Obtaining payment through Bank against LC 4.3.2 The authorities below, citing the Volcker Committee Report which reported that illicit kickbacks and surcharges were pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act cannot be invoked merely on the basis of an unestablished doubt that expenditure incurred could be for infraction of law. 4.3.3 On similar facts as in the case on hand, the Coordinate Bench of the Tribunal in the case of Metro Exports P. Ltd. in ITA No. 2026/Mum/2008 dated 08.06.2016, following the decisions of the Hon'ble Calcutta High Court in the case of CIT vs. Rajrani Exports (AIT 2013-75-High Court) and other Coordinate Benches in the case of NSIL Exports Ltd. (2014) 44 taxmann.com 246 and Air Pac Exports Ltd. (152 ITD 634) has decided this issue in favour of the assessee holding as under at paras 7 and 8 thereof, as under: - "7. Ground No.5 raised in the present appeal is in respect of commission of export to Iraq. AR o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the recipient of the commission in parting some of the fund so received as commission with the Government of Iraq and such parting of commission with the Government of Iraq was objected to by the Volker Commission report which was a pact between the Iraq Government and the UN wherein, as it appears, neither the appellant company is involved nor Government of India is involved." Further, the Co-ordinate Bench of ITAT in NSIL Export Ltd. Vs. DCIT [2014] 44.taxmann.com 246- Mum while dealing with similar Ground of appeal held as under: "Therefore, until and unless it is otherwise proved that the payment was an illicit payment to the Saddam Hussain regime and not to the parties it cannot be concluded that the said payments are not made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bench of this Tribunal in NSIL Exports Ltd. (supra) holding that, Cipla was involved in illicit payment made to Iraq Government as per Volker Committee Report holding as under: "35. It is seen that the revenue authorities as well as the DR placed heavy reliance on the decision of Cipla Ltd. vs. ACIT, ITA No. 7284 to 7286/Mum/2007, wherein the coordinate Bench at Mumbai, came to the conclusion that, Cipla was involved in illicit payment made to Iraq Government, as per Volcker Report. It has been held by the coordinate Bench in Para 7.1 that the assessee has not denied payment of ASSF. In para 3 of the order, the order mentions about the payments towards ASSF and on which basis, the cases were reopened. 36. However, in the instant cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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