TaxTMI 
TaxTMI 
2012 (12) TMI 56
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....the circumstances of the case the Income Tax Appellate Tribunal is right in law in deleting the disallowance of Rs.42,98,215/- made by the Assessing Officer against the payment made to the Foreign Agent ? (II) Whether the order passed by the Income Tax Appellate Tribunal is suffering from non-application of mind and hence is perverse or not? 2. Heard learned senior counsel Mr. Manish Bhatt appearing for the Revenue was candidly submitted that identical question was examined by this Court in case of Commissioner of Income Tax - II Vs. Atma Prakash Batra in Tax Appeal No. 838 of 2009 and the same has been followed in case of Commissioner of Income Tax V/s. M/s. Rachana Exports in Tax Appeal No. 1958 of 2010. 3. On having examined the mater....
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.... head "Commission" of 11.5% or 12% and after deducting the said amount, net figure of sale was worked out. The total amount of net sales was Rs.28,74,85,387/, but as per accounting standards, the amount of export commission should have been reflected on the credit side by showing gross sale minus commission and the net sales would be in as outer column on the credit side of the manufacturing account. The assessee also did not furnish any agreement for paying such commission nor did it file any proof of such remittance routed through the Reserve Bank of India (RBI). The foreign agents' commission was allowable upto 12% under the Central Excise & Customs Rules, while giving DEPB benefit, but the same was required to be proved beyond doubt as ....
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....aper book. It was submitted that the assessee is an Export Oriented Unit and as such, there cannot be any disallowance with reference to commission payment since that would amount to disallowance of claim under section 80HHC of the Act. After pointing out various details from the paper book as well as a CBDT circular, it was submitted on behalf of the assessee that such types of transactions had already been accepted by the Board and that, this was not a new concept of deducting commission from invoice value. It was submitted that whatever amount was received by the assessee as net consideration of export had been offered as export turnover and the department had failed to bring on record any evidence to the effect that the assessee had rec....
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....RBI and its authorized dealer, was what had been earned by the assessee from such transactions. The Tribunal further found that the commission was not deducted from the export invoices in an ad hoc manner and it was clearly under an agreement between the buyer and the seller, as also between the buyer and the agent. Consequently, the assessee was under an obligation to deduct commission from the gross invoice value. In the present case, there was a compulsion to deduct the commission from the export invoices which was clearly indicated in the confirmation letters of the agents, and that the ingredients which were necessary for such deduction of commission to be treated as diversion of income by over riding title was clearly present. It was ....