TaxTMI 
TaxTMI 
2017 (2) TMI 336
X X X X Extracts X X X X
X X X X Extracts X X X X
....ating the Income Tax Appeal No. 100 of 2003 as the leading case. This is department's appeal filed under Section 260-A of the Income Tax Act, 1961 against an order dated 17.6.2002 of the tribunal for the assessment year, 1998-99. The question of law sought to be answered in this appeal is hereunder: "Whether the Hon'ble Tribunal was justified in cancelling the order under Section 263 passed on 18.12.2001 in spite of the fact that the issue of paying of commission to the sales agency was not examined earlier by the Assessing Officer?" The facts of the case are that the assessment of the company was completed under Section 143 (3) vide order dated 29.12.2000. The returned income of Rs. 2,47,23,220/- was accepted. As ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re CIT, Ghaziabad. The fact that the necessary enquiry was made by the AO who himself was the Addl. Commissioner of Income-tax is beyond dispute. The AR of the assessee has made a dates chart of the proceedings before the AO which clearly shows that the assessment was made after detailed enquiry and investigation, not only with regard to several heads of expenditure but also with regard to other aspects of the expenditure. Detailed questionnaires were issued vide order sheet entries through which specific queries were raised. After issue of notice u/s 142 records of the assessee were examined which took place on many dates running for several hours at a stretch. We are, therefore, of the opinion that the basic premises of CIT, Ghaziabad, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... it also participated in a Trade Fair in Germany which is also not an annual feature. These two events had led it to spend more than 25 lakhs in this year vis- a- vis the amount spent in the previous year. In addition the selling agent is a tax payer and is assessed in Special Range 27, Delhi and in the year under review, assessment had been done by JCIT, New Delhi and disallowances etc. had been made in respect of foreign travelling and exhibition expenses against which the sole selling agent had filed appeals. These are separate proceedings and no adverse inference should have been drawn in respect thereof, especially when the selling agent is a large tax payer for the last twenty years and had paid tax every year before and every year af....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the market." After examining all these conditions the tribunal came to conclusion that assessee was in no way in control of the selling agent. Further the tribunal also examined the documents relating to the approval granted by the Government of India, Ministry of Law, Justice & Company Affairs issued under Section 294 AA of the Companies Act, as this approval was required to be taken by the companies, which had to be taken paid up capital of more than Rs. 50 lakhs. This too reflected the genuineness of the commission which was granted by the assessee, who is selling agent. It is on the basis of above material that the tribunal has come to conclusion that the learned CIT had made an error in revising the order under Section 263 of the ....