Appeals partially allowed: Commission expenses upheld, travelling expenses remanded for lack of substantiation.

The Tribunal partially allowed both appeals for statistical purposes. It upheld the deletion of disallowance of commission expenses paid to M/s. Toshbro Controls Pvt. Ltd., emphasizing lack of evidence supporting Revenue's doubts. However, it remanded the disallowance of travelling expenses back to the Assessing Officer for further examination due to inadequate opportunity for substantiation during assessment proceedings.

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Issues:
1. Disallowance of commission expenses paid to M/s. Toshbro Controls Pvt. Ltd.
2. Disallowance of travelling expenses at 25% and subsequent reduction to 12.5%.

Issue 1: Disallowance of Commission Expenses:
The case involved an appeal by the assessee and the Revenue against the order of the Ld. Commissioner of Income-tax (Appeals). The primary issue was the deletion of disallowance of commission expenses paid to M/s. Toshbro Controls Pvt. Ltd. The Assessing Officer disallowed a significant amount of commission expenses incurred by the assessee, suspecting the genuineness of the services rendered by M/s. Toshbro Controls Pvt. Ltd. The Revenue contended that the commission was not allowable as a deduction due to doubts regarding the benefit derived by the assessee. However, the Ld.CIT(A) deleted the disallowance, emphasizing that the recipient company being a loss-making entity was not a valid ground for disallowance. The Ld.CIT(A) also considered that customers might not be aware of the subsidiary company, leading to potential misunderstandings in transactions. The Tribunal upheld the Ld.CIT(A)'s decision, noting that similar commissions had been paid in previous years without issue, and there was no concrete evidence to support the Revenue's apprehensions of profit-shifting.

Issue 2: Disallowance of Travelling Expenses:
The second issue pertained to the disallowance of travelling expenses at 25% by the Assessing Officer, which was subsequently reduced to 12.5% by the Ld.CIT(A). The assessee and the Revenue both raised concerns regarding this disallowance. The Learned Counsel for the assessee argued that the Assessing Officer did not provide a proper opportunity to substantiate the claim with relevant details during the assessment proceedings. Consequently, the Tribunal decided to restore the matter to the Assessing Officer for a fresh examination of the travelling expenses claim with proper evidences. Both parties agreed to this course of action, leading to the issue being allowed for statistical purposes.

In conclusion, the Tribunal partially allowed both appeals for statistical purposes, sustaining the decision on the disallowance of commission expenses while remanding the issue of travelling expenses back to the Assessing Officer for further examination.

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