Tribunal directs reevaluation of deduction claim for transformer company's commission payment

The Tribunal allowed the appeal, directing the Commissioner (A) to reevaluate the deduction claim for a private limited company manufacturing transformers. The company claimed a commission payment of Rs. 30,000 for procuring orders from Punjab State Electricity Board. Despite initial denial due to lack of evidence, new evidence including an appointment letter and receipt supported the commission payment's necessity for securing contracts. The Tribunal emphasized the importance of considering all relevant evidence and ordered a reassessment, ultimately allowing the appeal for statistical purposes.

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Issues involved: Whether payment of commission for procurement of business is deductible in computing income for assessment year 1982-83.

Summary:
The case involved a private limited company manufacturing transformers facing a steep fall in turnover, claiming a commission payment of Rs. 30,000 to procure orders from Punjab State Electricity Board. The Inspecting Asstt. Commissioner doubted the commission's purpose and verifiability, denying the deduction due to lack of evidence. The Commissioner (A) upheld this decision, emphasizing the need to prove expenditure was for business purposes. The Tribunal heard the appeal, where the assessee argued that commission payments were common in the industry and crucial for securing contracts based on quality, capacity, and adherence to schedules. New evidence presented included an appointment letter and receipt from the liaison officer, supporting the commission payment. The Departmental Representative objected to this new evidence, claiming the assessee failed to prove the necessity of the commission. However, the Tribunal allowed the evidence, stressing the importance of seeking the truth and considering all relevant evidence. The Tribunal directed the Commissioner (A) to reevaluate the deduction claim in light of the new evidence and the significant increase in orders from Punjab State Electricity Board. Ultimately, the appeal was allowed for statistical purposes.

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