2005 (3) TMI 43

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..... een referred by the Income-tax Appellate Tribunal, Ahmedabad Bench "A", at the instance of the assessee: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal, while deciding the assessee's appeals against the order passed by the learned Commissioner of Income-tax under section 263 of the Income-tax Act, 1961, had jurisdiction to direct the Assessing Officer to make proper investigation and then decide the question of allowability of additional commission in accordance with law? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal should have cancelled the order of the Commissioner of Income-tax directing the Assessing Officer to disallow the additional commission? (3) Whether, on .....

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..... including the amount relating to excess of recovery on account of advertisement over expenditure in computation for deduction under section 80-I of the Act?" The assessment years are 1984-85 and 1985-86. There is no dispute that the facts in relation to both the years are identical. The assessee is carrying on manufacturing activity under a royalty agreement with M/s Nirma Chemical Works Ltd. The assessee is manufacturing detergent powder. It appears from the facts recorded by the Tribunal that the sales of finished products are effected through a chain of consignee distributors located at various stations in the country, and as per the agreement with such consignee distributors, it is the consignee distributors who are primarily liable to .....

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..... ce of advertisements on behalf of a number of consignee distributors could not be termed to be a part of the regular business of the assessee, namely, it was not part and parcel of the manufacturing activity. In fact, according to Mr. Bhatt, it was almost a parallel business, like that of an advertising agent, which was undertaken by the assessee and, hence, the income generated from such activity could not be termed to be derived from the business of manufacturing activity entitling the assessee to claim deduction under section 80-I of the Act. Mr. S.N. Soparkar, learned senior advocate appearing on behalf of respondent-assessee, apart from relying on the impugned order of the Tribunal, invited attention to the order of this court rendere .....

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