Stallion Laboratories Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-8(2), Ahmedabad

ITA 1981/AHD/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9573 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 06-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Assessment record; Onus to prove; TDS
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 191; 13; 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NOS. 1981 & 2404/A HD/2015 (ASSESSMENT YEAR:2011-12) M/S. STALLION LABORATORIES PVT. LTD. 8 TH FLOOR, DEV PATH, B/H LAL BUNGALOW, C.G. ROAD, NAVRANGPURA, AHMEDABAD 380009 APPELLANT VS. ITO, WARD-8(2) / WARD-4(1)(2), AHMEDABAD RESPON DENT / CROSS OBJECTOR PAN: AACCS6205N /BY ASSESSEE : SHRI KETAN H SHAH, A.R. /BY REVENUE : SHRI JAMES KURIAN, SR. D.R. /DATE OF HEARING : 02.01.2017 /DATE OF PRONOUNCEMENT : 06.01.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THE ASSESSEE AND REVENUE HAVE INSTITUTED INSTANT CR OSS APPEALS FOR ASSESSMENT YEAR 2011-12 AGAINST THE CIT(A)-9, AHMED ABADS ORDER DATED 29.05.2015, IN APPEAL NO. CIT(A)-9/374/WD.8(2)/14-1 5, DELETING DISALLOWANCE OF COMMISSION PAYMENTS OF RS.67,77,001 /- AS MADE BY THE ITA NOS. 1981 & 2404/AHD/2015 ( M/S. STALLION LABOR ATORIES PVT. LTD. VS. ITO) A.Y. 2011-12 - 2 - ASSESSING OFFICER IN ASSESSMENT ORDER DATED 20.03.2 014 WITH A DIRECTION TO FIRST VERIFY THE RATE OF THE ABOVE COMMISSION PAYME NT AND RESTRICT THE SAME TO THAT @ 3%, IN PROCEEDINGS UNDER SECTION 143(3) OF T HE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. WE COME TO RIVAL PLEADINGS FIRST. THE ASSESSEE S SOLE SUBSTANTIVE GROUND PLEADS THAT THE CIT(A) HAS ERRED IN DIRECTIN G THE ASSESSING OFFICER TO VERIFY ITS ABOVE COMMISSION PAYMENTS AND HOLD THE S AME AS ALLOWABLE @ 3%. THE REVENUES GRIEVANCE ON THE OTHER HAND IS THAT T HE CIT(A) OUGHT NOT TO HAVE DELETED THE ABOVE COMMISSION PAYMENTS DISALLOW ANCE AS MADE BY THE ASSESSING OFFICER. WE COME TO RELEVANT FACTS FIRST. 3. THE ASSESSEE/A COMPANY IS ENGAGED IN PHARMACEUTI CAL BUSINESS. IT MADE COMMISSION PAYMENTS TO 13 PARTIES TOTALING TO RS.67,77,001/-. THE ASSESSING OFFICER DISALLOWED THE SAME IN ASSESSMENT ORDER AFTER HOLDING THAT ALTHOUGH THE ASSESSEE HAS FILED ALL THE RELEVANT DE TAILS ALONGWITH CONFIRMATIONS, PAN PARTICULARS, TDS DEDUCTIONS, COM MISSION/LIASONING AGREEMENTS OF THE ABOVE PAYEES WHO HAD ALSO FILED T HEIR RESPONSES IN FURTHERANCE TO SCRUTINY NOTICES, THERE WAS NO PROOF OF THE PAYEES SERVICES RENDERED TO THE ASSESSEE. HE FURTHER OBSERVED THAT MERE PAYMENT AND FURNISHING OF THE ABOVE PARTICULARS WOULD NOT RENDE R THE IMPUGNED COMMISSION PAYMENTS AS ALLOWABLE IN ABSENCE OF ACTU AL PROOF OF THE MARKETING /LIASONING SERVICES RENDERED. 4. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) PARTL Y ACCEPTS ITS CONTENTIONS AS FOLLOWS: 2.3 DECISION: ITA NOS. 1981 & 2404/AHD/2015 ( M/S. STALLION LABOR ATORIES PVT. LTD. VS. ITO) A.Y. 2011-12 - 3 - I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND T HE SUBMISSIONS GIVEN BY THE APPELLANT. THE AO HAS GIVEN PROPER OPPORTUNITY TO T HE APPELLANT AND ASKED FOR THE CONFIRMATIONS FROM THE PARTIES TO WHOM COMMISSION A ND DISTRIBUTION CHARGES HAVE BEEN PAID. THE SHOW CAUSE FOR COMMISSION PAID ACCOU NT OF RS. 42,32,375/- HAS BEEN GIVEN. FURTHER, IN THE ASSESSMENT ORDER, THE AO HAS RELIED ON FOLLOWING CASE LAWS: (I) ASSAM PESTICIDES VS. CIT [227 ITR 846], GAUHATI HC (II) CIT VS. PREMIER BREWERIES LTD. [279 ITR 5 1 (KER.)] (III) BHARGAV REFRIGERATION INDUSTRIES PVT. LTD. V S. ITO [28 TTJ 587], ITAT, DELHI BENCH (IV) ITO VS. MADDI LAXMAIAH & CO. (P) LTD. [31 ITJ 71 (HYD)] SR NAME ADDRESS PAN NO. AMOUNT TDS NET 1 JIGNA SANIDH SHAH (OLD) 121,MANEKBAUG SOCIETY, AMBAWADI, AHMEDABAD ANKPS7883 E 597,000.00 59,700.00 537,300.00 2 JADUMANI DASH (OLD) PLOT NO.90, LANE NO.3, JAGANNATH VIHAR, BARAMUNDA, BHUBNESHWAR - 751003 AIEPD5322Q 117,635.00 12,116.00 105,519.00 3 SPECTRUM ' ENTERPRISE(OLD) SHOPNO.1-A, 4NO. GANESH PARK (ANAND PARK),CHINCHWAD GAON, PUNE-411033 ACLPL1316K 259,680.00 26,747.00 232;933.00 4 VENUS INTERNATIONAL (OLD) B/603, CORROLA JEWEL, MILITARY ROAD, MAROL, ANDHERI (E), MUMBAI AAYPM2525 L 48,200.00 4,820.00 43,380.00 5 VIJAY J. SHAH (OLD) 26/B, JAIN MERCHANT SOCIETY, PALDI, AHMEDABAD - 380007 ANTPS6602 C 2,777,426.00 279,303.00 2,498,123.00 6 B. BHUSHAN KUMAR (NEW) 11/202, PHASE- V, BRAHMAND CHS LTD., AZAD NAGAR, THANE(W), MUMBAI APMPK7685 Q 20,460.00 2,108.00 18,352.00 7 SKY TRADE SERVICES(NEW) 103, HAASH COMPLEX, NR. NAGRI EYE HOSPITAL, ELLISBRIDGE, AHMEDABAD AHCPN377Q 2,844.00 --- 2,844.00 8 KALPESH SHAH (NEW) 306, SHANTINATH, NR. ASHIRVAD FLATS, BEH. DHARAM CINEMA, MEHSANA. BHHPS5254F 20,000.00 2,000.00 18,000.00 9 ANUPAM PARMAR (NEW) DISTRIBUTION EXP. 2, VARD HMANNAGAR, COLLEGE ROAD, JAYNAGAR, BHUJ, KUTCH APHPP5938 G 381,930.00 7,639.00 374,291,00 TOTAL 4,225,175.00 ITA NOS. 1981 & 2404/AHD/2015 ( M/S. STALLION LABOR ATORIES PVT. LTD. VS. ITO) A.Y. 2011-12 - 4 - AS PER AO * 4,232,375.00 (*) APPEARS TO BE CALCULATION MISTAKE BY THE AO. THE AO HAS EMPHASIZED THAT THE MERE PAYMENT BY ITSE LF DOES NOT QUALIFY FOR DEDUCTION IN COMPUTING THE INCOME UNLESS, THE NECES SITY FOR SUCH PAYMENT WAS ALSO SHOWN AS FOR THE PURPOSE OF BUSINESS. NO RECOURSE T O SECTION 40(A)(2)(B) OF THE I.. T. ACT, 1961 HAS BEEN TAKEN FOR RELATED PARTIES. ON THE OTHER HAND, THE APPELLANT HAS FILED DIFFERE NT CASE LAWS AND DISTINGUISHED THE DECISION OF SWADESHI COTTON MILLS CO. LTD. REPORTED AT [63 ITR 57 (SC)] AND INSTEAD FELLED ON THE DECISION OF ANUP AM SYNTHETICS REPORTED AT [104 TTJ 119 (DEL.)]. THE APPELLANT HAS FILED CONFIRMATI ON FROM THE PARTIES, TDS DETAILS, FULL ADDRESSES WITH PA NO. AND SUBMITTED T HAT IN THEIR PHARMA BUSINESS THE COMMISSION PAYMENT IS A USUAL PRACTICE AND WITHOUT THE PAYMENT OF SUCH COMMISSION, THE CONDUCTING OF BUSINESS IS NOT EXPED IENT. THEREFORE, IT IS CLAIMED THAT THE EXPENDITURE INCURRED IS GENUINE THROUGH BA NKING CHANNEL AND THE SAME HAS BEEN DONE AS IT WAS NECESSITY 0F ITS BUSINESS. THE FACT REMAINS THAT THE AO HAS NOT PROVED THAT THIS WAS NON-GENUINE EXPENDITURE. T HE AO ALSO COULD NOT EXTRACT POSITIVE EVIDENCES FOR REVENUE BY RECORDING STATEME NTS U/S. 131 OF THE I. T. ACT, 1961 OF THE COMMISSION AGENTS TO PROVE THAT NO SUCH SERVICES WERE RENDERED TO THE APPELLANT. THE FULL DETAILS WERE ON RECORD AND THE AO COULD HAVE DONE THE SAME AS HE IS BESTOWED WITH SUCH POWERS WHICH WOULD HAVE BE EN VERY MUCH WITHIN THE DEPARTMENTAL PROCEDURE. I HAVE ALSO GONE THROUGH TH E COPY OF EACH OF THE APPOINTMENT LETTERS ISSUED BY THE APPELLANT COMPANY TO THE COMMISSION AGENTS. THE SPECIFIC WORK OR TERRITORY OF OPERATION IS MENT IONED IN SUCH APPOINTMENT LETTERS. THE WORKING OF COMMISSION / DISTRIBUTION C HARGES TO BE PAID ALONG WITH BRIEF NOTE FOR EACH OF THE PARTIES, HAS ALSO BEEN P LACED ON RECORD AND GONE THROUGH THE OTHER DETAILS SUBMITTED AND NOT REPRODUCING FOR SAKE OF BREVITY (PP 13 TO 33 OF PB). A COPY OF LEDGER ACCOUNT GIVING DETAILS ABOUT TDS IS ALSO FILED. THE INFORMATION SUBMITTED BY APPELLANT IS REPRODUCED IN TABULAR FORM BELOW: IN REFERENCE TO DISTRIBUTION EXPENDITURE OF RS.3,81 ,930/- PAID TO SHRI ANUPAM PARMAR, IT IS FOUND THAT THE ASSESSEE HAS SU BMITTED COPY OF AGREEMENT ENTERED INTO WITH HIM. THE A.O. CAME TO THE CONCLUS ION THAT NO SERVICE HAS BEEN RENDERED WITHOUT EXAMINING SHRI PARMAR AND ALSO WIT HOUT EXAMINING AFORESAID COMMISSION AGENTS. IT IS FURTHER FOUND THAT THE ASS ESSEE HAS MADE PAYMENT ACCORDING TO THE AGREEMENT ENTERED INTO AND IN REFE RENCE TO ALL THE ABOVE NINE PARTIES TDS HAS BEEN DEDUCTED. CONFIRMATION RECEIVE D FROM ALL THE PARTIES WHICH ARE ALSO ON RECORD ALONGWITH TDS CERTIFICATE IN FOR M NO.16A. IT IS FURTHER FOUND THAT THE ASSESSEE HAS GIVEN REPLY DATED 22.12.2012 PLACED ON PAPER BOOK PAGE 13 TO 15, WHEREIN IN PARA 9, IT INTER ALIA REQUESTED T HE A.O TO KINDLY EXAMINE AFORESAID ALL NINE PARTIES IN CASE ADDITION WAS CON TEMPLATED. AS PER RECORDS, THE AO HAS NOT EXAMINED ANY OF THE NINE PARTIES AND WENT ON TO MAKE ADDITION AS PER PRECEDENTS OF THE CASE. THE APPELLANT HAS BE;EN ABLE TO DISCHARGE ITS ONUS [63 TTJ 191 (DEL.)] - INSTRUMED (INDIA) INTERNATIONAL VS. ITO AND SUCCESSFULLY SHIFTED THE BURDEN TO PROVE ON REV ENUES AS HAS BEEN HELD IN A/ [159 ITR 78 (SC)] - ORISSA CORPORATION. THE APPELLA NT HAS ALSO FILED RELEVANT JUDGMENT TO ADVANCE ITS ARGUMENT IN THE CASE OF BHA RAT BIJLI LTD. REPORTED AT [71 ITA NOS. 1981 & 2404/AHD/2015 ( M/S. STALLION LABOR ATORIES PVT. LTD. VS. ITO) A.Y. 2011-12 - 5 - ITD 412 (MUM.)]. I AM INCLINED TO ACCEPT THE ARGU MENT OF APPELLANT AND RELY ON THE RATIO LAID DOWN BY HON'BLE GUJARAT HIGH COURT I N THE CASE OF ROHINI BUILDERS REPORTED AT [256 ITR 360 (GUJ.)]. THE RATIO LAID DO WN BY ITAT, AHMEDABAD IN THE CASE OF DEPUTY COMMISSIONER OF INCOME TAX VS. TYCO VALVES & CONTROL INDIA (P) LTD. [(2013) 81 DTR (AHD) (TRIB) 48] IS RELEVANT AN D HAS BEEN RELIED, 'ASSESSEE HAVING FURNISHED THE STATEMENT OF COMMISS ION PAYMENT GIVING THE NAMES OF THE COMMISSION AGENTS AND THE SERVICES REN DERED BY THEM AS WELL AS VOUCHER NUMBERS, DATES OF PAYMENTS, PANS OF THE AGENTS, AMOUNT OF INVOICES, RATE OF COMMISSION, ETC. AND THE AO HAVIN G NOT FOUND THE PAYMENT OF COMMISSION TO BE BOGUS PAYMENTS, DEDUCTION THERE OF IS ALLOWABLE.' THE APPELLANT HAS SUBMITTED COPY OF APPOINTMENT LET TERS ISSUED TO THE COMMISSION AGENTS STIPULATING CONDITIONS OF THEIR CONTRACT, TH E BUSINESS PLAN HAS BEEN EXECUTED AND WORKING OF COMMISSION THEREON SUBMITTED, INDICA TES THAT THE SERVICES HAVE BEEN RENDERED FOR APPELLANT'S BUSINESS BY THESE COM MISSION AGENTS. IN MY OPINION, THE APPELLANT HAS DISCHARGED ITS ONUS BY FILING ALL POSSIBLE DETAILS INCLUDING CONFIRMATIONS (OF ALL THE NINE PARTIES) AND TDS AND SUCCESSFULLY ESTABLISHED THAT THE GENUINE EXPENDITURE HAS BEEN EXPENDED FOR THE B USINESS PURPOSES. ON THE OTHER HAND, THE AO COULD NOT GATHER THE POSITIVE EVIDENCE S FOR THE DEPARTMENT AND TAKEN DECISION BASED ON PRESUMPTIONS AND NOT ON THE FACTS ON RECORD. IT IS ALSO NOTED THAT MAJOR AMOUNT HAS BEEN PAID TO FIVE OLD PARTIES FOR WHICH FINDINGS WERE ALSO CONTAINED IN MY ORDER FOR A. Y. 2009-10. IN VIEW OF ABOVE FACTS OF THE CASE, I AM INCLINED TO ACCEPT THE SUBMISSION OF THE APPELLANT AND THE GROUND OF APPEAL IS ALLOWED. APPELLANT'S A.R. RELIED ON THE SUBMISSION MADE FOR EARLIER A.Y. 2009-10 & 2010-11 AS WELL AS APPEAL ORDERS PASSED BY LD.CIT(A ) FOR A.Y. 2009-10 & 2010-11 AS THE FACTS ARE IDENTICAL FOR CURRENT A.Y. 2011-12 . THE APPELLANT'S A.R. FILED DETAILS OF COMMISSION STATEMENT, LEDGER ACCOUNT OF COMMISSION EXPENSES, DEBIT NOTES, CONFIRMATION OF ACCOUNTS, CERTIFICATE IN FOR M NO.16A ISSUED TO THE PARTIES, COPY OF THE AGREEMENT WITH PARTIES AS UNDER: SR. NAME OF THE PARTY ADDRESS P.A. NO. AMOUNT OF COMMISSION 1 ANUPAM PARMAR B/60, MANOKAMNA TENAMENT NR. KHARAWALA FACTORY ISANPUR, AHMEDABAD APHPP5938G 26,000/- 2 GOKUL TRADERS NATIONAL CHAMBERS NR. CITY GOLD ASHRAM ROAD AHMEDABAD-3 80009 ABJPS1381E 1,86,167/- 3 VENUS INTERNATIONAL B-603, COROLLA JEWEL MILITARY ROAD, MAROL, ANDHERI, MUMBAI AAYPM2525E 1,12,452/- ITA NOS. 1981 & 2404/AHD/2015 ( M/S. STALLION LABOR ATORIES PVT. LTD. VS. ITO) A.Y. 2011-12 - 6 - 4 KETAN NARESHCHANDR A THAKKAR E-4, KUNDAN FLAT VIBHAG 2, VASNA AHMEDABAD-7 AAAHPT3877B 1,31,444/- 5 PURVI ASSOCIATES 817DEVPATHBLDG B/H LAL BUNGLOW ELLISBRIDGE, C.G. ROAD AHMEDABAD AELPS4823P 1,66,025/- 6 SUTARIA SERVICES 24 ASIA HOUSE NR.SWASTIK CROSS ROAD, NAVRANGPURA AHMEDABAD ACIPS7791Q 1,56,184/- 7 ACE ENTEPRIRSE A/402, MANGALYA TOWER NR.ANJALI CROSS ROAD BHATTA, PALDI, AHMEDABAD ACMPT9447J 1,56,185/- 8 VIDUR CORPORATION 304, RUTURAJ CHAMBER SWASTIK CROSS ROAD NAVRANGPURA AHMEDABAD ALEPT5316R 2,03,704/- 9 RAJENDRA B.LATTAKAR PUNE MAHARASHTRA AAKHR6322L 2,22,400/- 10 SHREEJINA KETAN & CO. F/61 SATELLITE CENTER AHMEDABAD- 15 AAEPT5628H 1,90,832/- 11 MRS.ANANTHA LAXMI MYSORE AGCPA3781A 5,82,043/- 12 MANLAX LIFESCIENCES INC 124, AASHAR ENCLAVE KOLSHET ROAD G.B. ROAD THANE WEST- 400607 APMPK7685Q 82,917/- 13 VIJAY J SHAH 1 9/A JAIN MERCHANT SOCIETY, MAHALAXMI FIVE ROADS, PALDI, AHMEDABAD-7 ANTPS6602C 45,60,648/- TOTAL 67,77,001/- I HAVE GONE THROUGH THE ASSESSMENT RECORDS AND IT I S SEEN THAT THOUGH THE APPELLANT HAS FILED REQUISITE DETAILS BUT THE A.O. HAS FAILED TO TAKE COGNIZANCE OF THE SAME AND TREATED THEM UNVERIFIED, WHICH IS NOT JUSTIFIED ON THE PART OF AO, AS ITA NOS. 1981 & 2404/AHD/2015 ( M/S. STALLION LABOR ATORIES PVT. LTD. VS. ITO) A.Y. 2011-12 - 7 - ALL THE CONFIRMATIONS ARE PART OF ASSESSMENT RECORD S. THE AO NEEDS TO BE MORE CARE FULL IN THIS REGARD. HOWEVER, AFTER PERUSAL OF THE DOCUMENTS .FURNISHED BY THE APPELLANT'S A.R. I AM OF THE OPINION THAT APPELLANT HAS NOT DISCHARGED ITS ONUS FULLY IN RESPECT OF COMMISSION PAYMENT MADE TO THE ABOVE MENTIONED PARTIES. IN THE AGREEMENT ENTERED WITH THE PARTIES, THE RATE OF COM MISSION PAYABLE IS NOT SPECIFICALLY MENTIONED. THE APPELLANT HAS ALSO NOT PRODUCED EITHER IN THE ASSESSMENT PROCEEDINGS OR IN THE APPELLATE PROCEEDI NGS DETAILS OF SALES MADE THROUGH THESE PARTIES SHOWING NAME OF PARTIES, AREA , CITY, COUNTRY, QTY. RATE OF COMMISSION ETC. FOR THE PURPOSE OF AUTHENTICITY OF SUCH COMMISSION PAYMENTS. THE APPELLANT HAS ALSO FAILED TO PRODUCE ANY EVIDENCE I N THE SHAPE OF DOCUMENTS, SUCH AS LETTER OR EMAIL WRITTEN BY THESE PERSONS TO WHOM COMMISSION HAVE BEEN PAID, THAT TOO ON SUCH A HIGH RATE, TO THE CONCERNED PART IES IN CONNECTION OF PROCURING ORDERS ON BEHALF OF APPELLANT. THE APPELLANT HAS ALSO FAILED TO PRODUCE THE BILLS OF CONCERNED PARTIES CONFIRMING THAT THESE PERSONS WERE AGENTS OF APPELL ANT AND LIABLE FOR PAYMENT OF COMMISSION. MOREOVER, WHILE GOING THROUGH THE ASSES SMENT RECORDS, IT IS OBSERVED THAT RATE OF COMMISSION PAYMENT IS RANGING FROM 2% TO 24% WHICH SEEMS TO BE ON EXTREMELY HIGHER SIDE. THERE IS NO UNIFORMITY AND B ASIS FOR PAYING SUCH COMMISSION TO THESE PERSONS. MOREOVER, THE COMMISSI ON PAYMENT IS ALSO MADE TO CLOSELY RELATED PARTY, VIZ. SHRI VIJAY J. SHAH WHO IS DIRECTOR IN THE APPELLANT COMPANY. I HAVE ALSO OBSERVED THAT THAT EVERY YEAR MAJOR PORTION OF COMMISSION, WHICH IS MORE THAN 50% OF TOTAL COMMISSION PAYMENT MADE BY APPELLANT, HAS BEEN PAID TO SHRI VIJAY J SHAH, WHO IS THE DIRECTOR OF T HE APPELLANT COMPANY AND HE HAS BEEN EARNING SALARY AND INTEREST INCOME FROM THE AP PELLANT COMPANY APART FROM COMMISSION. GENERALLY, IN THIS TRADE 2% TO 3% COMMI SSION IS NORMAL, WHEREAS IT IS SEEN THAT THE APPELLANT HAS PAID EXORBITANTLY HIGH COMMISSION TO DIFFERENT PERSONS PARTICULARLY TO ITS DIRECTOR SHRI VIJAY J SHAH WITH OUT ANY VALID REASON . ACCORDINGLY FOLLOWING THE APPELLATE ORDERS PASSED B Y LD.CIT(A) FOR A.Y. 2009-10 & 2010-11 IN THE CASE OF APPELLANT THE ADDI TION MADE AGAINST COMMISSION PAYMENT OF RS.67,77,001/- IS DELETED WITH FOLLOWING REMARK. HOWEVER IN VIEW OF OBSERVATION MADE BY ME, WRT TO RATE OF COMMISSION P AID BY APPELLANT COMPANY, THE A.O. IS DIRECTED TO ALLOW THE CLAIM OF APPELLANT AF TER VERIFYING THE RATE OF COMMISSION PAYMENT AND RESTRICTING THE RATE OF COMM ISSION PAYMENT @ 3%. SUBJECT TO THIS CONDITION, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 5. HEARD BOTH SIDES REITERATING THEIR RESPECTIVE ST ANDS IN SUPPORT OF AND AGAINST THE IMPUGNED DISALLOWANCE. LEARNED AUTHORI ZED REPRESENTATIVE FIRST OF ALL INVITES OUR ATTENTION TO THE FACT THAT THE V ERY ISSUE HAD ARISEN IN THE PRECEDING TWO ASSESSMENT ORDERS AS WELL WHEREIN A C O-ORDINATE BENCH OF THIS TRIBUNAL IN REVENUES APPEAL ITA NOS. 1162 & 2145/A HD/2013 DECIDED ON 02.03.2013 ACCEPTED ASSESSEES CONTENTIONS TO HOLD THAT SUCH COMMISSION EXPENSES ARE A ROUTINE PRACTICE IN PHARMACEUTICAL B USINESS IN ORDER TO BOOST ITA NOS. 1981 & 2404/AHD/2015 ( M/S. STALLION LABOR ATORIES PVT. LTD. VS. ITO) A.Y. 2011-12 - 8 - THE SALES. HE THEN STATES THAT NEITHER THE ASSESSI NG OFFICER NOR THE CIT(A) HAVE GIVEN ANY COGENT REASON TO ADOPT A DIFFERENT A PPROACH IN THE IMPUGNED ASSESSMENT ORDER. LD. DEPARTMENTAL REPRESENTATIVE AT THIS STAGE STRONGLY SUPPORT ASSESSING OFFICERS ACTION IN ORDER TO REST ORE THE ENTIRE DISALLOWANCE FIGURE. WE MAKE IT CLEAR THAT THERE IS NOT DISPUTE THAT THE ASSESSEE HAS ACTUALLY MADE THE IMPUGNED COMMISSION PAYMENTS AFTE R DEDUCTING TDS THEREUPON AT THE PRESCRIBED RATES IN FURTHERANCE TO VARIOUS AGREEMENTS WITH ITS PAYEES FOR MARKETING AND OTHER ALIKE SERVICES. IT HAS FURTHER PLACED ON RECORD THEIR CONFIRMATIONS BY WAY OF CONTRA ACCOUNTS AND D EBIT NOTES. THE SAME IS NOWHERE DOUBTED BEFORE BOTH THE LOWER AUTHORITIES S INCE THE ASSESSING OFFICER IS OF THE VIEW THAT THERE IS NO EVIDENCE OF THE ACTUAL SERVICES RENDERED FOLLOWED BY CIT(A)S OPINION THAT THERE IS NOT PRES CRIBED RATE OF THE COMMISSION PAYMENTS IN AGREEMENT CONCERNED AND FURT HER THAT THESE PAYMENTS RANGING BETWEEN 2% TO 24% ARE ON EXTREMELY HIGHER SIDE. WE FURTHER FIND THAT THERE IS NO DISTINCTION DRAWN BET WEEN FACTS OF THE IMPUGNED ASSESSMENT YEAR VIS--VIS THOSE IN EARLIER YEARS HE REINABOVE. COMING TO THE CIT(A)S OBSERVATION TERMING THE ASSESSEES COMMISS ION PAYMENTS TO BE EXCESSIVE, WE NOTICE THAT THERE IS NO COMPARATIVE T ABULATION WITH MARKET RATE OF SUCH PAYMENTS; IF ANY BEFORE ARRIVING AT THE SAI D CONCLUSION. WE ACCORDINGLY OBSERVE THAT THE LD. CIT(A) HAS ERRED I N DIRECTING THE ASSESSING OFFICER TO RESTRICT ASSESSEES COMMISSION PAYMENTS @3% AFTER OBSERVING THAT THE SAID AUTHORITY HAD NOT BEEN CAREFUL BEFORE DISA LLOWING THE IMPUGNED PAYMENTS WHEREIN THE ASSESSEE HAS PLACED ON RECORD ALL POSSIBLE DETAILS IN ORDER TO DISCHARGE ITS ONUS ON THE ONE HAND WHEREAS THE COMMISSION PAYMENTS HAVE BEEN HELD TO BE EXCESSIVE WITHOUT ANY SUCH COMPARISON ON THE OTHER. WE THUS ACCEPT ASSESSEES ARGUMENTS SUPPORT ING ITS SOLE SUBSTANTIVE GROUND AND TO DIRECT THE ASSESSING OFFICER TO ALLOW ITS ENTIRE CLAIM OF COMMISSION PAYMENTS AMOUNTING TO RS.67,77,001/-. T HE REVENUES ITA NOS. 1981 & 2404/AHD/2015 ( M/S. STALLION LABOR ATORIES PVT. LTD. VS. ITO) A.Y. 2011-12 - 9 - CONTENTIONS SEEKING TO RESTORE ENTIRE DISALLOWANCE AMOUNT ARE ACCORDINGLY REJECTED. 6. THE ASSESSEE SUCCEEDS IN ITS APPEAL ITA NO.1981/ AHD/2015 WHEREAS REVENUES APPEAL ITA NO.2404/AHD/2015 IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 06 TH DAY OF JANUARY, 2017.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 06/01/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0