TMI Blog2022 (9) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal, which, in our opinion, is a very vital factor to decide the sustainability of the claim of the assessee. Tribunal was of the view that most of the companies with which the assessee had business transactions were all Government of India concerns. However, the Tribunal has failed to note that the AO has noted the names of all the 13 customers with whom the assessee had transactions and many of them are private limited companies and are not government entities. When the payments made by the assessee were for the purpose of procuring the business and to get the supplied items to be ensured that they have delivered to the customers and arrangement for speedy payment, the payment is in the nature of commission. That apart, for the ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder about the due discharge of onus by the Assessee before the Assessing Officer in the matter of furnishing all necessary particulars in support of claim of deduction of commission payment for which the onus shifted, thereafter, to the Assessing Officer which the Assessing Officer failed to discharge ? 3. Whether, on the facts and in the circumstances of the case, the order of the Tribunal was correct in the ignoring non-rejection of the books of account by the Assessing Officer and the fact that the persons, to whom Commissions were paid, were Income Tax Assessees for which the claim of payments were verifiable and the payment were assessed in their hands ? 4. Whether in view of the fact that the agreement entered into by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question involved in the instant case is whether the commission paid by the assessee to various agents was allowable as deduction under Section 37 of the Act. The assessee during the course of assessment proceedings supplied the relevant details about the payment of commission, explained the nature of services rendered by the commission agents, relevant bills and vouchers were also produced, the payments which were made through account payee cheques were also furnished and the assessing officer did not find any defect in the books of accounts nor rejected the same. On the contrary, to examine the genuineness of the claim of the assessee summons were issued under Section 131 of the Act and statements were recorded from the Karta of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer. Aggrieved by the same, the revenue preferred the appeal before the learned Tribunal. On perusal of the order of the learned Tribunal we find that the argument made by the revenue as well as the assessee has been elaborately set out and the documents which were made available before Tribunal were also examined. However, the Tribunal took up for consideration only one transaction with M/s Hi-Tec Coir Foam and in our view has made a hair splitting exercise and disbelieved the payment of commission on the ground that the assessee has failed to prove or establish that M/s. Hi Tec Coir Foam had actually rendered services to the assessee. In respect of other commission agents the Tribunal has not discussed the facts which are already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ERS V. COMMISSIONER OF INCOME-TAX, [1969] 72 ITR 612 (SC). In COMMISSIONER OF INCOME TAX V. HEWITT ROBINS (NEW YORK), [1982], 9 Taxman 250(CAL) the Division Bench of this Court confirmed the order passed by the Tribunal which held that the commission paid to those two companies was but reward for the assistance rendered by them in securing the contracts and since the payment of such commission was incidental to the assessee s business which consisted in taking up contracts and executing them as no-profit making machinery was set up or any advantage or asset by an enduring nature came into existence as a sale of those payments and those payments were not a condition precedent to the assessee executing the contracts and earning profits the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had transactions and many of them are private limited companies and are not government entities. Thus, when the payments made by the assessee were for the purpose of procuring the business and to get the supplied items to be ensured that they have delivered to the customers and arrangement for speedy payment, the payment is in the nature of commission. That apart, for the earlier and subsequent assessment years the payments were never disallowed by the Assessing Officer. Thus, we find the learned Tribunal committed an error in reversing the order passed by the CIT(A). For the above reasons, the appeal filed by the assessee is allowed. The order passed by the learned Tribunal is set aside and the order passed by the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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