TaxTMI 
TaxTMI 
2011 (1) TMI 1340
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.... in the appeal, was remitted to the file of the AO, to be decided afresh. 2. The AO had restricted the claim of deduction of remuneration paid by the assessee to its dealers at 6% of the total commission receipts amounting to ₹ 5,39,93,482/-. The balance payment of ₹ 89,98,913/- was disallowed, treating it to be unreasonable and excessive. The ld. CIT(A) directed the AO to delete the addition, following the first appellate order for assessment year 2005-06. 3. In our order dated 30.11.2009(supra) we observed, inter alia, that:- "However, we find substance in the submission of the Department that in the initial years, in view of the setting up of the outlets, the payment of the remuneration was the same and that being so over ....
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....ercentage of remuneration payable to the dealers by the assessee out of commission from the insurance company had no corelation with number of dealers; that it had never been agreed by the assessee that the matter be remitted to the file of the AO, rather the matter was covered by the Tribunal decision in the assessee's case for assessment year 2005-06; and that therefore, the order dated 30.11.2009 be suitably modified, dismissing the appeal of the revenue. 5. The learned counsel for the assessee has broadly reiterated the contents of the application, as above. The ld. DR, on the other hand, has strongly relied on the Tribunal order. 6. Having heard the parties and having perused the material on record, we find that indeed an error has c....
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....ent year. The Tribunal has noted so, for that year. In para 4 of the order dated 9.10.2009, in ITA Nos. 1590 and 1924(Del)09 (copy on record), the Tribunal has observed, inter alia, as follows:- "4. Aggrieved with the order of the AO, the assessee filed an appeal before the CIT(A) and submitted before him that the assessee is engaged in the business of vehicle insurance as Corporate Insurance Agent and conducts his business through Maruti dealers network consisting of over 300 vehicle sales outlets and 400 dealers workshops spread all over the country………………." The above position remains undenied. Therefore, our observation that a drastic decline in the payment of remuneration was warranted, is a mi....
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....on the payments shown to the dealers and the required details of these dealers like the addresses etc. have been provided to the AO but disallowing part of the remuneration without effecting any enquiries to prove the case otherwise will definitely not be of any help to the AO. Though the principle of 'res judicata' is not applicable to the income tax proceedings but definitely, if in the earlier years, no addition had been made by the Department then without basing the findings on any other concrete evidences, there is no justification for the disallowance. In view of the above mentioned reasons, I do not see any reason on the part of the AO to reject the books of accounts." 9. It has also been contended that though the assessee never agr....