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TMI Blog2023 (2) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... law and in fact by simply relying on the decision in the appellant's own case for A.Y. 1992-93 whereas the Hon'ble ITAT had pointed out in the aforesaid order that the principle of res judicata is not applicable and the AO should calculate and determine the quantum of income & the reason of the disallowance of commission whereas no such opportunity was granted by Ld. CIT(A)? 3.The Ld. CIT(A) has erred in law and on facts in not providing reasonable opportunity to the Assessing Officer despite categorical directions of the Hon'ble ITAT to this effect vide its order ITA No. 846/Ahd/1998 for A.Y. 1993-94 dated 25.08.2006 (para no. 6 of page 4)? 4. The Ld. CIT(A) has erred in law and in fact by simply relying on the decision in the appellant's own case for A.Y. 1992-93 whereas the Hon'ble ITAT had pointed out in the aforesaid order that the principle of res judicata is not applicable and that the AO should calculate and determine the quantum of income & the reason of the disallowance of commission whereas no such opportunity was granted by Ld. CIT(A)?" 3. The only effective issue raised by the Revenue is that the Ld. CIT(A) erred in deleting the addition made by the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , one by the Revenue and another filed by the assesses. Before taking note of the questions framed by the Revenue in these appeals, brief facts may be recorded. Respondent-assessee is a company registered under the Companies Act and is engaged in the business of manufacturing maze products. For the year under consideration i.e previous year to the relevant assessment year 1992-93, the assessee had claimed deduction of an amount of Rs. 1.27 crores (rounded off) towards commission paid to the sole selling agent. The Assessing Officer disallowed the entire claim holding that the said sole selling agent had not rendered any service. The commission paid, therefore, could not be claimed deduction of. The assessee carried the order of the Assessing Officer in appeal. CIT(Appeals), allowed substantial portion of the claim of the assessee and restricted the disallowance to Rs. 7.50 lacs which was the commission paid towards sale to eight different parties with respect to whom CIT (Appeals) believed that the assessee had not rendered any service. The order of the CIT (Appeal) gave rise to two cross-appeals. Revenue as well as the assessee, both appealed to the Tribunal. The Tribunal by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adverse to the assessee and thereby allowed the appeal of the assessee and simultaneously the Revenue's appeal was dismissed. The Tribunal took note of several factors emerging from the record. The Tribunal noted that in the previous years, this very arrangement of sales through LGDA was examined by the Assessing Office on scrutiny. The commission paid was accepted. The Tribunal also noted that it was with respect to eight parties that sales were made directly. With respect to such parties also, the Tribunal observed that the assessee might have interacted with the parties for many reasons including the supply schedule and logistic support, etc. However, merely on this basis, commission payable to such sales cannot be disallowed. From the record, what emerges is that in the earlier years, the very arrangement of commission paid to the sole selling agent came up for consideration and such arrangement was accepted. Counsel for the assessee correctly points out that in the earlier years, the Tribunal had accepted such arrangement and in fact, the High Court had confirmed the view of the Tribunal. Additionally, we a/so notice that the assessee had large number of customers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irements the LGDA would be satisfying. In the result, we are of the opinion that the Tribunal's order requires no interference. We may notice that the Tribunal relied on number of decisions of this Court and other courts to examine the nature of allow/ability of the claim made by the assessee. However, even on facts, we find that the Tribunal is justified in accepting the claim of the assessee, we do not find it necessary to make a detailed reference to these judgments. In the result, both the Tax Appeals are dismissed." (emphasis supplied) 5.1 No SLP against this order before the Hon'ble Supreme court was reported by the AO to have been filed by the Department, Hence the issue of commission payment to LG Doctors & Associates by the appellant has reached finality and decided fully in favour of the appellant. 5.2 When in the main case for AY 1992-93 the addition by disallowing the commission to sole agent did not survive, in the succeeding AYs including AY 1993-94, where the addition was solely based on the findings during assessment in AY 1992-93, the raison-deetre for sustaining the addition in AY 1995-96 also does not survive. Therefore I direct the AO to d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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