2014 (6) TMI 153

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.... of law arises for consideration: - "Did the Tribunal fall into error in upholding the disallowance to the tune of Rs.89,98,913/- made on account of remuneration to dealers." 3. The brief facts necessary to decide the case are that the assessee is engaged, inter alia, in the business of corporate insurance agency; it conducts business through extensive Maruti dealers' networks consisting of over 300 sales outlets and 400 dealer workshops spread throughout the country. It is a 100% owned subsidiary of Maruti Suzuki India Ltd, and has a business arrangement with National Insurance Co. Ltd as its licensed corporate insurance agent. It filed a return for AY 2006-07 declaring an income of Rs.2,66,26,206/-. The AO issued notice under Sectio....

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....s Court in respect of the main order of the Tribunal dated 30.11.2009. 5. It is contended that the Commissioner (Appeals), in his findings, had examined the entire records including the fact that for the previous period, i.e., AY 2005-06, the CIT had considered and noticed that the percentage of commissions shared with dealers had been in the range of 93.67%, 79% and 70.09%. It was contended that the Tribunal itself noticed order of 9.10.2009 and upheld the CIT (A)'s factual findings in 2005-06 in the following terms: - "7. The learned counsel for the assessee, on the other hand, placed reliance on Tribunal's order dated 9.10.2009 in the assessee's own case for A.Y.2005-06 in ITA no.1590 & 1924/Del/09 (copy of order has been filed), w....

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.... examined and decided afresh in accordance with law, after affording adequate opportunity of being heard to the assessee. The AO shall deal and decide the issue independent of the comparison with the remuneration paid in the earlier years with that of the year under consideration. We order accordingly." Arguing against the Tribunal's findings (that the disallowance in this case made by the AO beyond 60% was unjustified), learned counsel submitted that the sole discretion as regards the amount of commission to be given, parted or shared, (being a commercial decision) lies exclusively within the domain of enterprise, i.e., the assessee. So long as the AO is satisfied whether the amounts were actually paid and the expenses incurred were gen....