Insurance agent commission deduction under a circular upheld as 50 per cent where gross commission was below the threshold.

A Board circular dated 6-6-1984 was interpreted to permit an insurance agent whose gross commission was below Rs. 60,000 to claim expenditure deduction at 50 per cent of the year's commission. The Tribunal's construction of the circular was upheld as correct, with no infirmity found in its conclusion. On that basis, the assessee remained entitled to the 50 per cent deduction, and the revenue's reference application under section 256(2) of the Income-tax Act, 1961 failed.

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Issues: Whether, on a proper interpretation of the Board circular dated 6-6-1984, an insurance agent receiving gross commission of less than Rs. 60,000 was entitled to deduction of expenditure at the rate of 50 per cent of the year's commission, and whether the Tribunal's view warranted reference under section 256(2) of the Income-tax Act, 1961.

Analysis: The circular was read as permitting expenditure to be allowed at 50 per cent of the year's commission where the gross commission was below Rs. 60,000. The Tribunal's interpretation of the circular was found to be correct, and no infirmity was found in its conclusion.

Conclusion: The assessee was entitled to the 50 per cent deduction contemplated by the circular, and the revenue's application under section 256(2) failed.

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