2017 (7) TMI 1014

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....which was the provision in force during the relevant period, i.e. Assessment Year 1983-84. In the return filed by the assessee for that year, it had stated that a sum of Rs. 4,60,433/- was paid by the assessee to one Mr. Jack Barouk of Brussels who was appointed by the assessee as its commercial agent in the said country for the sale of the assessee's goods. The aforesaid provision, i.e. Section 35B(1)(b)(iv), provides for weighted deduction that is in addition to the actual amount spent, one-third thereof as an additional expenditure, which provision was introduced to give the benefit to the assessee. This provision reads as under: "Section 35B(1)(b) (iv): Where an assessee, being a domestic company or a person (other than a company....

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....as the payment was made to Mr. Jack Barouk a resident of Brussels. It is also not in dispute that this payment was made against some sales of carpets belonging to the assessee, made by the said Mr. Jack Barouk. The only dispute is as to whether he could be treated as "agent" of the assessee. The appellant had filed appeal against the order of the Assessing Officer refusing to give benefit of the aforesaid provision, with Commissioner of Income Tax (Appeals) ['CIT (Appeals)], which was dismissed. However, in further appeal preferred before the Income Tax Appellate Tribunal (ITAT), the appellant succeeded. A perusal of the judgment of the ITAT reveals that ITAT had looked into the agreement that was entered into between the assessee and t....

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.... territories mentioned therein namely, Benelux and France. This communication further states that he will be given 5% commission on all goods shipped by the assessee to the aforesaid territories on the orders procured by the said Mr. Jack Barouk. The assesseee had accepted and agreed on the aforesaid terms contained in the said communication and there is a specific endorsement to this effect by the assessee that the said communication, on acceptance by the assessee, became a valid and enforceable agreement between the parties. The aforesaid terms clearly state that Mr. Jack Barouk had agreed to work as an agent of the assessee and on the orders procured he was to get 5% commission. This aspect that the agreement was in fact an agency agreem....