TaxTMI 
TaxTMI 
2014 (7) TMI 1247
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....al activity." 2. The first ground of appeal is against deleting the disallowance of Rs. 46,46,867/- made on account of payment of commission to M/s Sadem India Ltd.. The assessee is engaged in the business of manufacturing of current and potential transformers & electrical control equipments from Bhiwadi industrial area. During the year under consideration, the assessee had paid commission to M/s Sadem India Ltd. at Rs. 46,46,867/-. The learned Assessing Officer gave reasonable opportunity of hearing on this issue and asked to prove the services rendered by M/s Sadem India Ltd.. The assessee filed reply vide letter dated 27/09/2007, which has been reproduced by the learned Assessing Officer on pages 6,7, and 8 of the assessment order. It was submitted by the assessee that the reasons recorded for reopening the case u/s 147 of the Income Tax Act, 1961 (in short the Act) were based on the assessment of M/s Sadem India Ltd.. The assessment of the learned Assessing Officer of M/s Sadem India Ltd. cannot be the valid base for reopening of a case for A.Y. 2004-05. Further, it was submitted that the commission paid to M/s Sadem India Ltd. on the basis of service rendered by it. There w....
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....08 & ITA No. 996/JP/2008 dated 30/09/2008. It reveals from the order that M/s Sadem India Ltd. is doing business for other people also to procure order from BSNL. It is stated that Mr. Satish Kumar Dhanda is having good political and public relations and has been Chairman of Engineering Export Council of India from the year 2000 as well as Member of Board of Trade constituted by the Ministry of Commerce from 1998. Further it is stated that agreement for expenses incurred have been approved by the share holders in the AGM of the payer and recipient companies. Moreover, TDS has been deducted and deposited with the Central Govt.. The appellant has informed in his submission that services and guidance of a local party for updating about advertisements for purchase of transformers, for acquiring application forms, for properly and accurately completing them and submitting them in time, for quoting the correct rate, for getting drawings approved, for recovery of payments after delivery of goods etc. was needed because of cutthroat competition. It is stated that only after inspection by the customers regarding quality specification delivery of finished goods is done. Further it i....
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....of the business or profession shall be allowed in computing the income chargeable under the head "Profits and gains of business or profession". The activities described by the appellant as having been undertaking during the course of business and interaction with M/s Sadem India Ltd. are of similar nature as are described in the order of Hon'ble ITAT dated 30/09/2008. The appellant's case is supported by the ratio of the cases decided by the Hon'ble ITAT in the matter of DCIT Vs. Vhanketeshwar Wires Pvt. Ltd., Vhanketeshwar Wires Pvt. Ltd. Vs. DCIT & ACIT Vs. Vhanketeshwar Wires Pvt. Ltd. in ITA No. 901/JP/2007, ITA No. 692/JP/2008 & ITA No. 996/JP/2008 dated 30/09/2008. In view of the forgoing, respectfully following the decision of the Hon'ble ITAT as per their order dated 30/09/2008 specified above, the addition made after disallowance of commission to M/s Sadem India Ltd. at Rs. 4646867/- is hereby deleted." Now the Revenue is in appeal before us. 4. In this case the Coordinate Bench of ITAT Jaipur in ITA No. 215/JP/2009 A.Y. 2004-05 vide order dated 26/02/2010 has allowed the Revenue's appeal ex parte by observing that:- "The A.O. while passing the order in the ....
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....formulated above, is liable to be answered and is hereby answered in favour of the assessee. 10. Consequently, the appeal is allowed. Impugned order of the Tribunal dated 26/02/2010 is set aside and the case is remitted back to the Tribunal for decision on merits, afresh. However, cost of Rs. 21,000/- (Rs. Twenty one thousand) is imposed on the assessee. If the amount of cost is deposited in the Department within a period of four weeks and receipt thereof is furnished in the Tribunal, then the Tribunal will decide the matter afresh on merits, after hearing both the parties, otherwise this appeal will be deemed to have been dismissed and no further opportunity will be granted to the assessee. 11. Parties are directed to appear before the Income Tax Appellate Tribunal, jaipur Bench 'B', Jaipur on 28/05/2012. No fresh notice in this regard will be issued to the parties by the Tribunal." This case as per direction of the Hon'ble High Court was refixed and heard. 5. The learned D.R. supported the order of the Assessing Officer and argued that there is no involvement directly or indirectly in the procurement of order from the Electricity Board, the Electricity Boa....
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....he assessee benefited the assistant and expertise of M/s Sadem India Ltd. for procuring the orders through tenders. It is further argued that on increase income by not allowing the commission paid to M/s Sadem India Ltd., the learned Assessing Officer had not allowed 80IB deduction on it. As per law, this income is also part of the income from the industrial income, which has not been allowed by the Assessing Officer at the time of addition on account of commission payment. Alternatively, he argued that the assessee was getting benefit u/s 80IB of the Act on 30% of income of industrial income. It is further argued that the assessee every year has been paying commission from A.Y. 2002-03 to A.Y. 2006-07. It varies from year to year on sales of the appellant consistently increasing. Thus, he requested to confirm the order of the learned CIT(A) The learned A.R. also placed reliance the following case laws:- i. Mobile Communication (India) (P) Ltd. Vs. DCIT 125 ITD 309 (Del.) (Trib.) ii. V.I.P. Industries Ltd. Vs. IAC 36 ITD 70 (Bom)(Trib)(TM). iii. Anupam Synthetics (P) Ltd. Vs. JCIT 104 TTJ 119 (Del.(Trib.) iv. CIT Vs. Ishwar Prakash & Bros. 159 IT....
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....ining the quality, timely payment etc. The recipient has declared the commission in his return of income and has confirmed to have rendered the services to the assessee. In the circumstances and facts of the case, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. and has rightly directed to enhance the allowance of deduction u/s 80IB of the Act. Thus Ground No. 2 of the Revenue is dismissed." Respectfully following the decision on identical issue by the Coordinate 'B' Bench of ITAT, Jaipur, we confirm the order of the learned CIT(A). 8. Ground No. 2 of the Revenue's appeal is against no allowing deduction u/s 80IB of the Act on interest on bank FDRs amounting to Rs. 2,75,187/-. The learned Assessing Officer observed that the assessee had claimed 80IB deduction @ 30% on bank FDR interest of Rs. 2,75,187/- at Rs. 82,554/-. The learned Assessing Officer did not find this income from the industrial undertaking, thus, he disallowed 80IB deduction at Rs. 82,554/-. The learned CIT(A) held that these FDRs were taken for bank guarantee in favour of the Electricity Board and other customers. It was stated by the assessee that with....