2002 (11) TMI 22

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....itting the said appeals issued notice on the following questions of law: "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in restricting the commission to the extent of 7 per cent. of the turnover? 2. Whether the Appellate Tribunal was justified in disallowing the commission over and above 7 per cent. on the ground that it is clearly hit by section 40A(2) and it is not wholly and exclusively incurred for the purpose of business? 3. Whether the Appellate Tribunal was justified in disallowing the commission in the light of the agreement, services rendered, and other evidence?" The brief facts are: The appellant is a manufacturer of aluminium electrolytic capacitors and it is a subsidiary ....

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....sessing authority was not justified in calculating the commission on the basis of profit and limited the commission paid to 7 per cent. of the turnover. Both the Department and the assessee filed appeals against the said orders before the Tribunal and the Tribunal by separate orders dismissed both the appeals on this point. Sri P. Balachandran, learned counsel appearing for the appellant, submits that the appellant had entered into an agreement as in the past for entrusting the sale of all types of aluminium electrolytic capacitors and other products manufactured by the appellant to their holding company, KSEDC Ltd., and as per the agreement, besides the sale of the products, the KSEDC has to collect from time to time and at periodical int....