Commission expenditure upheld where record showed genuine sole selling agent services and supporting evidence of actual work

Where a sole selling agent arrangement is genuine, commission payment is undisputed, and the record shows the agent performed real services such as procuring orders, preparing bills, and indemnifying the assessee, the Tribunal may rely on that material to uphold the commission expenditure. The key principle is that a finding of actual service rendered will stand where supporting evidence exists, and it cannot be disturbed as unsupported by evidence merely because the Revenue disputes the claim.

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Issues: Whether there was material before the Tribunal to hold that services were actually rendered by the sole selling agent, so as to justify the commission claimed to have been paid by the assessee-company.

Analysis: The agreement appointing the sole selling agent was genuine and the actual payment of commission was not disputed. The Tribunal relied on clauses imposing onerous obligations on the agent, including indemnity obligations, and on instances showing that the agent had indemnified the assessee for amounts not collected. The record also showed that the agent prepared bills and procured orders for the assessee's products. On these facts, it could not be said that there was no material to support the Tribunal's finding that services had in fact been rendered.

Conclusion: The question was answered in the affirmative, in favour of the assessee and against the Revenue.

Ratio Decidendi: Where the record contains material showing actual services rendered by a selling agent and the genuineness of the arrangement and payment are not in dispute, the Tribunal's finding allowing commission expenditure cannot be disturbed as unsupported by evidence.

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