TaxTMI 
TaxTMI 
2014 (7) TMI 553
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....er:- a) Commission expenses; b) Claim for damaged goods; and c) Foreign travelling expenses. 3. In respect of foreign travelling expenses, the learned CIT(A) has partially confirmed the addition and hence, the assessee has filed cross objection challenging the addition confirmed by the learned CIT(A). 4. The facts relating to the case are stated in brief. The assessee is engaged in the business of manufacturing, trading and export of shoes and also carrying other allied activities. The additions made by the AO in respect of commission expenses, claim for damaged goods were fully deleted by learned CIT(A). The additions made by the AO in respect of foreign travelling exp....
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....ssing Officer. With regard to the observation of the AO that the assessee did not deduct TDS from the commission amounts, the learned CIT(A) placed reliance on the circulars issued by the CBDT, viz., Circular No.23 of 1969 and Circular No.786 of 2000, which were in force during the assessment year under consideration and held that the assessee is not required to deduct tax at source from the commission amount paid to foreign agents. Even though the above said two circulars were withdrawn by another Circular No.7 of 2009, dated 22.10.2009, the learned CIT(A) took the view that the Circular No.7 of 2009 shall have prospective effect only and the old circulars shall apply for the year under consideration. 7. The Learned D.R contended that t....
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....er two Circulars would be operative only from 22.10.2009 and not prior to that date. Since the view taken by Ld CIT(A) on this issue is in accordance with the decision of the Hon'ble Allahabad High Court cited above, we uphold his view that Circular No.23 of 1969 and Circular No. 786 of 2000 are applicable for the year under consideration. 10. With regard to the payment of commission made to M/s Trading Post, the assessee filed an agreement dated 1-9-2009 entered between M/s Trading Post and assessee herein and submitted that the payment was made to M/s Trading Post in connection with the services rendered by it and it was a non-resident. The Ld A.R submitted that the recipients of commission amount have procured orders for the asses....
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....ue and restore the matter back to the file of the AO for examining the same afresh by duly considering the additional evidences and such other evidences that may be filed by the assessee before him. The AO may seek further explanations and information from the assessee. Considering all the relevant facts and materials, the AO may decide the issue in accordance with law. 15. The next issue relates to disallowance relating to foreign travel expenses. The assessee claimed foreign travel expenses of Rs. 33,91,814/- as deduction. The AO asked the assessee to justify the said claim by furnishing necessary details and documents. Though the assessee submitted that the partners of the assessee firm has undertaken travel to Italy & Germany to atte....
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....stricting the disallowance to 10% of the claim. 18. The Ld A.R submitted that the family member Ms. Priya was actually assisting the partners in the foreign trips. He submitted that she was taken to assist them, since the partners have to necessarily take somebody to carry the bags containing samples, display them and explain the features. He submitted that such kind of assistance was given by Ms. Priya. He further submitted that the expenses incurred on the travel of Ms. Priya was only Rs. 1,74,311/-. He further submitted that the assessee has been incurring expenses on the travel of Ms. Priya in the subsequent years also. He submitted that the assessing officer has examined the expenses incurred on the travel of Ms. Priya in assessment....