2018 (5) TMI 2092

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.... 1 to 3 of grounds of appeal of Revenue is regarding the deletion of disallowance of commission expenses paid to M/s. Toshbro Controls Pvt. Ltd. 3. Briefly stated the facts are that, assessee which is engaged in the business of manufacture and trading in electronic equipment and consultancy filed return of income on 29.09.2012 declaring income of Rs..14,58,590/-. The assessment was completed u/s. 143(3) of the Act on 26.03.2015 determining the income at Rs..1,33,93,600/-. While completing the assessment the Assessing Officer disallowed Rs..1,11,84,279/- out of commission expenses incurred by the assessee. In the course of the assessment, Assessing Officer noticed that assessee paid commission to related party namely M/s. Toshbro Controls....

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....y evidences and this impugned expenditure is not allowable as deduction. On appeal the Ld.CIT(A) deleted the disallowance against which the Revenue is in appeal before us. 4. The Ld. DR vehemently supported the orders of the Assessing Officer. On the other hand, the Ld. Counsel for the assessee strongly supported the orders of the Ld.CIT(A). Further the Ld. Counsel for the assessee referring to Page No. 31 of the Paper Book, submitted that similar disallowance of commission to sister concern was deleted by the Ld.CIT(A). Ld. Counsel for the assessee further referring to the details of sales commission to M/s. Toshbro Controls Pvt. Ltd. and breakup of the sales submitted that during the Financial Year 2011-12 relevant to the Assessment Ye....

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....g that the recipient company is a loss making company and is not a ground for disallowance of commission. He also accepted the submissions of the assessee that M/s. Toshbro Controls Pvt. Ltd. is known to customers by its flag ship company and may not be aware of the subsidiary company and therefore the customer might have stated that they have got materials directly from the assessee company M/s. Nova Controls Pvt. Ltd. which is the flag ship company. 6. We further find from the details that similar commission has been paid to M/s. Toshbro Controls Pvt. Ltd., during the Financial Years 2007-08 to 2014-15 and the percentage of total sales made through the M/s. Toshbro Controls Pvt. Ltd. by the assessee ranges from 58.30% to 78.78% and the....