2014 (2) TMI 188

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....nt as well as learned counsel for the respondent assessee. The substantial questions of law that arise for consideration in the appeal are as under: "Whether, on the facts and in the circumstances of the case is not the order of the assessing officer diminishing the export turnover by reducing the foreign commission and thereby reducing the claim under section 80HHC of the Income Tax Act in acc....

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....ding to the assessing officer, payment of commission is an instance of charge attached to the export order, therefore, it becomes a pre-charge created on the export orders canvassed by the agent, hence, what the assessee receives in reality is export proceeds and therefore commission amount cannot be included in the export turnover of the assessee. This came to be challenged before the first appel....

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....at the said issue has to go against the revenue and confirmed the order of the Commissioner of Income Tax (Appeals). Aggrieved by the same, the present appeal is filed. 3. The entire controversy arose as the assessing officer disallowed the commission paid to foreign agent on the ground, it is hit by the provisions of Section 40(a) of the Act. He took support from Toshoku Ltd's case (Supra). In....

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....f business would reduce proportionately when divided by the total turnover. The question is whether the commission paid by the foreign agent has anything to do with the export turnover declared by the assessee. Though such commission paid to the foreign agent could be claimed as expenditure, it cannot go out of the export turnover as indicated by the assessing officer, because the nature of income....