TaxTMI 
TaxTMI 
2008 (2) TMI 281
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....tivity in electrical equipments, such as circuit breakers. During the previous year relevant to the assessment year 1997-98 the assessee claimed expenses on account of commission and discount of Rs. 18,78,623. Out of this we are concerned with an amount of Rs. 9,05,862 said to have been paid as commission to M/s. Ram Agencies. 3. According to the assessee, it had made total sales of Rs. 1,50,97,708 and on this amount M/s. Ram Agencies was paid commission at 6 per cent. pertaining to the financial years 1994-95, 1995-96 and 1996-97. 4. The Assessing Officer found that there was no agreement between the assessee and M/s. Ram Agencies and there was no document on the basis of which it could be said that the commission was due and payable to ....
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....upplied by M/s. Ram Agencies and payments were made to M/s. Ram Agencies by account payee cheques. It was consequently held that there was no reason to doubt the genuineness of the transactions between the parties. On this basis, the assessment order was set aside by the Commissioner of Income-tax (Appeals). 8. Feeling aggrieved, the Revenue preferred an appeal before the Tribunal which was allowed and that is how the assessee is before us in appeal under section 260A of the Income-tax Act, 1961 (for short "the Act"). 9. On a perusal of the material on record, and after hearing learned counsel for the parties, we find that the only material in support of the case of the assessee is the internal note dated August 31, 1996, to the effect th....
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....lling agents or payment of certain amounts as commission, assuming there was such payment, that does not bind the Income-tax Officer to hold that the payment was made exclusively and wholly for the purposes of. the assessee's business. The Supreme Court observed as follows (page 446) "Although there might be such an agreement in existence and the payments might have been made, it is still open to the Income-tax Officer, to consider the relevant factors and determine for himself whether the commission said to have been paid to the selling agents or any part thereof is properly deductible under section 37 of the Act." 12. On the basis of the above principle and facts, the Assessing Officer as well as the Tribunal examined the entire case of....