THE ITO, Ward-1(1), Indore V. M/S. AGRO EQUIPMENT CO. P. LTD., Indore

ITA 803/IND/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5984 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Rule of consistency; Question of law; Commercial expediency

Judgement Text

ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., ..!', #$ # !% BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 49/IND/2013 ASSESSMENT YEAR: 2009-10 ACIT 4(1) INDORE :: APPELLANT VS M/S AGRO EQUIPMENT CO.PVT. LTD. INDORE PAN: AABCA 4685R :: RESPONDENT I.T.A. NO. 803/IND/2014 ASSESSMENT YEAR: 2010-11 ITO WARD 1(1) INDORE :: APPELLANT VS M/S AGRO EQUIPMENT CO.PVT. LTD. INDORE .#.& ./ PAN: AABCA 4685R :: RESPONDENT REVENUE BY SHRI MOHD. JAVED ASSESSEE BY SHRI SUDHIR PADLIA ! ' #$ DATE OF HEARING 9.11.2016 %&'( #$ DATE OF PRONOUNCEMENT 5.1.2017 ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 2 * O R D E R PER SHRI D.T. GARASIA, JM THESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDERS OF THE LEARNED CIT(A)-II, INDORE, DATED 27.11.2012 AND 30.9.2014. 2. THE COMMON ISSUE INVOLVED IN THESE APPEALS IS WHETHER THE LEARNED CIT(A) WAS JUSTIFIED IN ALLOWING T HE COMMISSION EXPENSES DISALLOWED BY THE ASSESSING OFFI CER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ELECTRONICALLY ON 29.9.2009 DEC LARING TOTAL INCOME AT RS.27,09,870/- FOR THE ASSESSMENT YEAR 2009-10 AND RS.7,40,450/- FOR THE ASSESSMENT YEAR 2010 - 11. THE ASSESSING OFFICER FOUND THAT IN THE PROFIT AN D LOSS ACCOUNT A SUM OF RS.14,15,925/- HAS BEEN SHOWN AS COMMISSION PAID TO MADHYA PRADESH LAGHU UDYOG NIGAM LIMITED. SIMULTANEOUSLY, COMMISSION AMOUNTING TO ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 3 RS.66,00,024/- HAS BEEN DEBITED AS PAID TO OTHER PERSO NS. THE ASSESSEE WAS ASKED BY THE ASSESSING OFFICER TO ESTABLISH THE GENUINENESS AS WELL AS REASONABLENESS OF EXPENDITURE IN QUESTION. THE ASSESSEE WAS FURTHER REQUI RED TO EXPLAIN THE SERVICES RENDERED AGAINST WHICH THE COMMISSION HAS BEEN CLAIMED AS EXPENDITURE. THE A.O. , AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OB SERVED THAT PRESENCE OF MIDDLEMEN IN GOVERNMENT TRANSACTION IS NOT WELCOMED BY THE GOVERNMENT. THUS NO GOVERNMENT OFFICER WOULD DARE TO PROPAGATE AND ALLOW PRESENCE OF MIDDLEMEN. THAT IS WHY THE GOVERNMENT IS FOLLOWING THE METHOD AND PRACTICE OF ASSIGNING THE TASK TO MADHYA PRADESH LAGHU UDYOG NIGAM. THE GOVERNMENT DEPARTMEN TS CONSTITUTE A PURCHASE COMMITTEE FOR BULK PURCHASES AND SEEK THE SERVICES OF MADHYA PRADESH LAGHU UDHOG NIG AM. THUS THERE IS NO SCOPE FOR ENTRY OF ANY MIDDLEMEN. IN THIS ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 4 VIEW OF THE MATTER, THE ASSESSING OFFICER DISALLOWED THE COMMISSION CLAIMED TO HAVE BEEN PAID BY THE ASSESSEE. 4. ON APPEAL, THE LEARNED CIT(A) ALLOWED THE CLAIM OF COMMISSION PAYMENT BY THE ASSESSEE WITH THE FOLLOWIN G OBSERVATIONS :- I HAVE GONE THROUGH THE ASSESSMENT ORDER AND ALSO SEEN THE SUBMISSION OF APPELLANT. APPELLANT IS INT O THE BUSINESS OF SUPPLY AND INSTALLATION OF SUBMERSIBLE PUMPS WHICH ARE PURCHASED BY GOVERNMENT DEPARTMENTS MAINLY BY PUBLIC HEALTH ENGINEERING DEP TT. FOR THIS PURPOSE SERVICES SERVICES OF COMMISSION AG ENT ARE REQUIRED IN ORDER TO GATHER THE QUANTITY AND TY PE OF SUBMERSIBLE PUMPS NEEDED BY VARIOUS GOVERNMENT DEPARTMENTS. AFTER PERSUING VARIOUS GOVT. AGENCIES, THE COMMISSION AGENT WORKS FOR ISSUING OF INDENTS FROM SUCH GOVT. OFFICES, QUOTING REQUIRMENT OF PUMPS. SU CH INDENTS ARE THEN SUBMITTED BY COMMISSION AGENTS TO ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 5 MADHYA PRADESH LAGHU UDYOG NIGAM LTD. (MPLUN). THEREAFTER COMMISSION AGENTS PURSUE MPLUN TO GET THE TENDERING PROCESS DONE ON SUCH INDENT AND THERE LIASONING AND PERSUASION IS REQUIRED FOR GETTING TH E PURCHASE ORDER FOR SUCH PUMPS BEING PLACED IN NAME OF APPELLANT. AFTER GETTING PURCHASE ORDERS IN FAVOUR OF APPELLANT, COMMISSION AGENTS ARE REQUIRED TO ENSURE N SUPPLY OF PUMPS IN TIME, GETTING THEM PROPERLY INST ALLED AND GET A FAVOURABLE INSPECTION REPORT FROM RESECTI VE GOVERNMENT DEPTT. SO THAT THE PAYMENT IS RELEASED B Y THAT DEPTT IN FAVOUR OF THE APPELLANT. HENCE THE ROLE OF MPLUN IN GOVERNMENT CONTRACT IS LIMITED TO JOB OF CALLING TENDERS FOR EVERY PURCHAS E ORDER AND FINALISATION OF TENDER PROCESS BY PLACING ORDER IN NAME OF ONE OF THE PARTIES. THE COMMISSION AGENTS ARE INVOLVED IN PRE-TENDER AND POST TENDER WORK. CONSIDERING THE DESCRIPTION GIVEN MPLUN AND ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 6 COMMISSION AGENTS ARE WORKING TOWARDS SAME GOAL OF PLACING GOVERNMENT WORK ORDERS, BUT THEY HAVE SEPARATE AND INDEPENDENT AREAS OF WORK WHICH ARE NO T OVERLAPPING. THE A.O.S VIEW THAT IN GOVERNMENT CONTRACTS THERE IS NO SPACE FOR COMMISSION AGENTS, IS NOT A CORRECT VIEW AND FACTS NARRATED ABOVE DISPROVE SU CH VIEW. THERE IS NO BAR ON COMMISSION AGENTS IN GETTING PRE-TENDER AND POST TENDER WORK DONE IN GOVERNMENT CONTRACTS. THEIR USE OF PERSUASIVE SKILLS IN GARNER ING GOVERNMENT ORDERS, THEIR INVOLVEMENT IN GETTING ALL THE CONDITIONS OF CONTRACT PROPERLY COMPLIED AND THEIR HELP IN GETTING THE INSPECTION REPORT OF SUCH WORK SIGNE D ARE ALL PARTS OF COMMERCIAL EXPEDIENCY.PAYMENT TO COMMISSION AGENTS IN GOVERNMENT CONTRACT IS CONSISTENTLY HELD AS AN ALLOWABLE EXPENSE BY VARIOU S COURTS NAMELY BHARAT MEDICAL STORES (2009) 308 ITR ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 7 373(P&H), LAXMI ENGINEERING INDUSTRIES (2008) 298 I TR 203 (RAJ.), NESTOR PHARMACEUTICALS (P) LTD. (2000) 33 DTR (DEL) ETC. THE ONLY PROHIBITION IS ON GAINING GOVERNMENT CONTRACTS THROUGH ILLEGAL GRATIFICATION OR COMMISSION PAYMENT TO GOVERNMENT OR ITS REPRESENTATION AS THAT IS AGAINST THE PUBLIC POLICY AND THAT IS DISALLOWABLE UNDER EXPLANATION TO SECTION 3 7(1) OF IT ACT. BUT IN PRESENT CASE NEITHER THERE IS ANY ALLEGATION OF SUCH PAYMENT, NOR THERE IS ANY PROOF OF THE SAME. THERE IS NO RESTRICTION ON PERSON OF RATLAM WORKIN G AS COMMISSION AGENT IN INDORE AND VICE VERSA. IT IS BASICALLY A LIASON WORK AND CAN BE DONE BY PERSON ACQUAINTED WITH OFFICERS OF GOVT. DEPTT. DEPENDING ON QUANTUM OF WORK, MORE THAN ONE COMMISSION AGENTS COULD BE DEPLOYED. ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 8 THERE IS ALSO NO BAR ON PAYMENT OF COMMISSION TO RELATIVES IF SERVICES ARE RENDERED BY THEM AS HELD IN COMPUTOR GRAPHICS LTD. (2006) 235 ITR 84(MAD) AND MICROTEX SEPARATORS LTD. (2007) 293 ITR 451(KAR.). PAYMENT OF COMMISSION IS MADE TO ONLY ONE RELATED PERSON NAMELY SHRI RAJESH GADIA WHO IS INSTRUMENTAL IN ORGANISING ENTIRE WORK OF APPELLANT COMPANY AND AS A RESULT OF SUCH COMMISSION PAYMENT THE TURNOVER OF APPELLANT HAS SUBSTANTIALLY IMPROVED OVER THE YEARS AS SHOWN IN TABLE GIVEN ABOVE. AFTER THE APPELLANT FILED DETAILS OF SERVICES RENDERED BY COMMISSION AGENTS, COPY OF THEIR LEDGER ACCOUNTS, COPY OF BILLS, DETAILS OF CHEQUE PAYMENTS TO SUCH AGENTS, THE ONUS SHIFTED ON A.O. TO DISPROVE S UCH FACTS. BUT A.O. DID NOT CONDUCT ANY ENQUIRIES AND N O EVIDENCE WAS GATHERED TO DISPROVE THE EVIDENCES PRODUCED BY APPELLANT. ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 9 ON THIS ISSUE OF COMMISSION PAYMENT, RULE OF CONSISTENCY HAS TO BE FOLLOWED. IT IS SEEN FROM SUBMISSION OF APPELLANT DATED 23.11.2012 THAT APPELLANT HAS CLAIMED SUCH COMMISSION EXPENSES IN A T LEAST 4 EARLIER YEARS I.E. IN A.Y. 2005-06 TO 2008- 09 AND COMMISSION EXPENSES HAVE BEEN ALLOWED TO APPELLANT IN ALL 4 YEARS, EVEN WHEN SCRUTINY ASSESSMENTS WERE CONDUCTED IN A.Y.2005-06 AND A.Y. 2006-07. FOLLOWIN G THE RULE OF CONSISTENCY, SUCH COMMISSION EXPENSES H AS TO BE ALLOWED TO APPELLANT IN A.Y. 2009-10 ALSO. FO R SUCH DECISION RELIANCE IS PLACED ON THE CAASE OF MANDEEP SINGH (2010) 328 ITR 169 (P&H). APPELLANT HAS FILED COPY OF ACKNOWLEDGEMENT FOR FILING RETURN AND COMPUTATION OF INCOME FOR A.Y. 20 05-06 OF ALL ITS COMMISSION AGENTS. IT IS SEEN FROM THE S AME THAT ENTIRE COMMISSION RECEIPT IS REFLECTED BY THEM IN THEIR RETURN OF INCOME AND AFTER CLAIMING ONLY MINO R ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 10 EXPENSES FROM IT, SUBSTANTIAL PART IS SHOWN IN THEI R NET INCOME. FOR EXAMPLE A COMMISSION OF RS. 2,05,912/- WAS PAID TO SHRI MUKESH RATANLAL KHANIWAL HUF, WHO HAS REFLECTED THIS RECEIPT IN RETURN AND AFTER CLAI MING EXPENSES OF RS.30912 HAS OFFERED NET INCOME ON THIS TRANSACTION AT RS.1,75,000/- IN HIS RETURN. SIMILAR FACTS ARE FOUND IN RETURNS OF OTHER COMMISSION AGENTS. CONSIDERING ALL THE FACTORS MENTIONED ABOVE, THE CLAIM OF COMMISSION EXPENSES OF RS.66,00,024/- ARE HELD AS EXPENDITURE INCURRED FOR BUSINESS AND SAME IS HELD ALLOWABLE EXPENSE. AS A RESULT GROUND NO. 2 OF THE APPEAL IS ALLOWED. AGAINST THE ABOVE FINDINGS OF THE LEARNED CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LEARNED DR SUBMITTED THAT IN THE CASE OF NATHULAL & SONS, ITA NO. 78/IND/2013 THE TRIBUNAL HAS DECIDED THE COMMISSION EXPENDITURE RELATING TO ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 11 GOVERNMENT SUPPLIER WHEREIN THE TRIBUNAL HAS DISCUSSED VARIOUS ISSUES WHEREIN IT WAS HELD THAT THE ASSESSEE SHOULD PRODUCE THE EVIDENCE FOR SERVICES RENDERED BY THE COMMISSION AGENT WHO WERE CLOSELY RELATED WITH THE ASSESSEE. THE COMMISSION PAYMENT MADE ONLY THROUGH CHEQUE IS NOT SUFFICIENT TO PROVE THE SERVICES RENDERED BY THE COMMISSION AGENT, THEREFORE, THE ISSUE WAS RESTORED TO THE FIL E OF THE ASSESSING OFFICER REGARDING THE SAME. THEREFORE , ON THIS ISSUE, THE FILE MUST BE RESTORED TO THE ASSESSING OFFICER AND THE LEARNED CIT(A) IS NOT JUSTIFIED IN ALLOWING THE CLAIM. 6. ON THE OTHER HAND, THE LEARNED AR OBJECTED TO THE SUBMISSIONS OF THE LEARNED DR ON THE GROUND THAT IN THIS CASE THE FACTS ARE ENTIRELY DIFFERENT WHEREAS IN THIS CASE THE ASSESSEE WAS NEVER ASKED T O PROVE THE GENUINENESS OF EXPENSES CLAIMED BY HIM ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 12 BUT THE SAME WAS DISALLOWED AS THUMB RULE THAT IN CASE OF GOVERNMENT SUPPLIES, NO MIDDLEMAN IS REQUIRED. MOREOVER, IN THIS CASE THE ASSESSEE HAS PAID LIASONING CHARGES TO VARIOUS PERSONS IN CONNECTION WITH THE SERVICES RENDERED BY THESE PERSONS RELATING TO CONTRACT ARRANGEMENT MADE WITH STATE GOVERNMENT THROUGH MPLUN. IN THIS CASE THE ASSESSEE HAS MADE SUPPLIES AGAINST THE ANNUAL RATE SYSTEM AND THOSE SUPPLIER WHO IS QUALIFIED IN FINANCIAL BID AND TECHNICAL BID ON TENDER SYSTEM DURING THE YEAR THE ASSESSEE WAS QUALIFIED TO SUPPL Y THE GOODS AT THE RATES APPROVED BY VARIOUS GOVERNMENT DEPARTMENTS. THE DEPARTMENT HAS LIBERTY TO CHOICE TO DISTRIBUTE THE ORDER CONSIDERI NG THE PRODUCTION CAPACITY OF UNIT, PAST PERFORMANCE O F VENDOR AND LOCATION OF THE VENDOR. ALL THIS PROCEDU RE WAS GIVEN TO THE DEPARTMENT. THE ASSESSEE HAS TO ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 13 CONVINCE THE DEPARTMENT FOR THE ASSESSEES ITEMS AND AFTER OBTAINING THE RATE CONTRACT, THE ASSESSEE HAS TO ATTAIN THEIR INDIVIDUAL REQUIREMENT. THEREFORE, AFTER CONSIDERING THIS, THE LEARNED CIT( A) HAS ALLOWED THE CLAIM. MOREOVER, IN THE ASSESSMENT YEARS 2005-06 TO 2008-09 COMMISSION HAS BEEN ALLOWED, THEREFORE, FOLLOWING THE RULE OF CONSISTEN CY, THE CLAIM HAS BEEN ALLOWED. MOREOVER, HE RELIED UPON THE DECISION OF THE HON'BLE M.P. HIGH COURT IN THE CASE OF CIT VS PURE PHARMA; 144 TAXMANN.364 (MP). 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT IN THIS CASE THE ASSESSING OFFICER HAS DISALLOWED THE COMMISSION EXPENSES INCLUDING COMMISSION PAID TO MPLUN OF RS.14,15,925/-, A CORPORATION OF M.P. STATE ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 14 GOVERNMENT ENJOYING THE SOLE RIGHT TO CONVERT THE INTEND OF PURCHASES. THE ASSESSEE HAS SHOWN THE COMMISSION RANGING FROM 7% TO 9% ABOVE THE COMMISSION TO MPLUN. THE EXPENDITURE IS SUPPORTED BY THE BILLS RAISED BY THE PAYEE. THE ASSESSEE HAS GIVEN PAN MENTIONING THE BILL. THE COMMISSION HAS BEEN PAID FOR COLLECTING THE REQUIREMENT FROM THE GOVERNMENT OFFICES LOCATED AT INDORE, KHARGONE, MANDLA, BALAGHAT, CHHINDWARA AND DEWAS. THE ASSESSEE IS ENGAGED IN MANUFACTURE OF SUB-MERSIBLE PUMPS AND DURING THE YEAR THE ASSESSEE HAS SUPPLIED THE PRODUCT OF THE ASSESSEE TO PUBLIC HEALTH ENGINEERING DEPARTMENT, GOVT. OF M.P. AND MANY OTHER GOVERNMENT DEPARTMENTS. THEREFORE, THE ASSESSEE HAS TO IDENTIFY VARIOUS PLACES, THEREAFTER FOR GETTING THE ORDERS THE ASSESSEE HAS TO MAKE INSTALLATION OF SUBMERSIBLE PUMPS AT THE VARIOUS ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 15 SITES IDENTIFIED BY PUBLIC HEALTH DEPARTMENT AND LIASONING CHARGES HAVE BEEN PAID BY THE COMMISSION ACCOUNT. THUS, THE ASSESSEE HAS MADE PAYMENT FOR THE SERVICES RENDERED. MOREOVER, THE ASSESSEE HAS EXPLAINED THE NATURE OF SERVICES RENDERED. THEREFOR E, WE ARE OF THE VIEW THAT THE LEARNED CIT(A) IS JUSTIFIED IN ALLOWING THE CLAIM. THE SAME KIND OF COMMISSION WAS ALLOWED IN FOUR EARLIER ASSESSMENT YEARS 2005-06 TO 2008-09 AND IT WAS ALLOWED IN SCRUTINY ASSESSMENTS FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07. THEREFORE, RULE OF CONSISTENCY IS FOLLOWED BY THE LEARNED CIT(A). WE ARE OF THE VI EW THAT THE LEARNED CIT(A) IS JUSTIFIED. MOREOVER, THE ASSESSEE HAS GIVEN SUFFICIENT EVIDENCE TO PROVE THE SAME. THEREFORE, WE DO NOT FIND ANY DISCREPANCY IN THE ORDER OF THE LEARNED CIT(A). WE ALSO GET SUPPOR T FROM THE DECISION OF THE HON'BLE HIGH COURT IN THE CASE ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 16 OF CIT VS. PURE PHARMA, (2005) 144 TAXMAN 364 (MP) IN WHICH IN PARA 3 & 4 IT WAS HELD AS UNDER :- 3, A FEW FACTS MATERIAL FOR DECIDING THE SAID APPE AL, IN SHORT, MAY BE MENTIONED AS UNDER : THE RESPONDENT/ASSESSEE COMPANY IS ENGAGED IN MANUF ACTURING AND SALE OF PHARMACEUTICAL FORMULATIONS. DURING THE PREVIOUS FINANCIAL YEAR, THE ASSESSEE HAD PAID TOTAL COMMISS ION OF RS. 13,35,336/-. OUT OF THIS, A SUM OF RS. 10,24,290/- WAS PAID AS COMMISSION ON SALES MADE TO THE GOVERNMENT AND ITS AGENCIES AND A SUM OF RS. 3,11,046/- WAS PAID AS COMMISSION TO N ON- GOVERNMENT PURCHASES. SINCE, A DOUBT WAS RAISED WIT H REGARD TO THE PAYMENTS MADE TO VARIOUS PARTIES AS COMMISSION, ENQUIRY WAS HELD. IT WAS FOUND THAT ALL THE PAYMENTS HAVE BEEN MADE AS COMMISSION TO VARIOUS PARTIES BY DEMAND DRAFTS, WHE REIN THE IDENTITY OF EACH OF THE AGENTS WAS ALSO ESTABLISHED . IT HAS ALSO BEEN FOUND THAT THE COMMISSION WAS PAID EXCLUSIVELY FOR BUSINESS PURPOSES ONLY. 4. ALL THESE ARE FINDINGS OF FACT AND NO SUBSTANTIA L QUESTION OF LAW, AS IS REQUIRED TO BE FORMULATED FOR DECIDING T HE APPEAL, ARISES IN THE SAME. THE TRIBUNAL HAS ALSO PLACED RELIANCE ON A JUDGMENT OF THE DELHI HIGH COURT REPORTED IN CIT VS. ELECTRI C CONSTRUCTION EQUIPMENT CO. LTD., [1990] 182 ITR 510, WHEREIN THE DELHI HIGH COURT DEALING WITH IDENTICAL QUESTION HAS ALREADY D ECIDED THE MATTER AGAINST THE PRESENT APPELLANT-REVENUE. 5. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AN D RESPECTFULLY FOLLOWING THE DECISION OF JURISDICTION AL HIGH COURT, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY, THE APPEAL OF THE REVENUE IN RESPECT O F ABOVE THREE GROUNDS IS DISMISSED. ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 17 THIS VIEW IS ALSO SUPPORTED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT AS RELIED UPON BY THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, THE HON'BL E HIGH COURT IN THE CASE OF CIT VS. PURE PHARMA, (2005) 144 TAXMAN 364 (MP) IN PARA 3 & 4 HELD AS UNDER :- 3, A FEW FACTS MATERIAL FOR DECIDING THE SAID APPEA L, IN SHORT, MAY BE MENTIONED AS UNDER : THE RESPONDENT/ASSESSEE COMPANY IS ENGAGED IN MANUF ACTURING AND SALE OF PHARMACEUTICAL FORMULATIONS. DURING THE PRE VIOUS FINANCIAL YEAR, THE ASSESSEE HAD PAID TOTAL COMMISSION OF RS. 13,35,336/-. OUT OF THIS, A SUM OF RS. 10,24,290/- WAS PAID AS COMMI SSION ON SALES MADE TO THE GOVERNMENT AND ITS AGENCIES AND A SUM O F RS. 3,11,046/- WAS PAID AS COMMISSION TO NON-GOVERNMENT PURCHASES. SINCE, A DOUBT WAS RAISED WITH REGARD TO THE PAYMENTS MADE T O VARIOUS PARTIES AS COMMISSION, ENQUIRY WAS HELD. IT WAS FOUND THAT ALL THE PAYMENTS HAVE BEEN MADE AS COMMISSION TO VARIOUS PARTIES BY DEMAND DRAFTS, WHEREIN THE IDENTITY OF EACH OF THE AGENTS WAS ALSO ESTABLISHED. IT HAS ALSO BEEN FOUND THAT THE COMMISSION WAS PAID EXCLUS IVELY FOR BUSINESS PURPOSES ONLY. 4. ALL THESE ARE FINDINGS OF FACT AND NO SUBSTANTIA L QUESTION OF LAW, AS IS REQUIRED TO BE FORMULATED FOR DECIDING THE APPEA L, ARISES IN THE SAME. THE TRIBUNAL HAS ALSO PLACED RELIANCE ON A J UDGMENT OF THE DELHI HIGH COURT REPORTED IN CIT VS. ELECTRIC CONST RUCTION EQUIPMENT CO. LTD., [1990] 182 ITR 510, WHEREIN THE DELHI HIGH ACIT VS. AGRO EQUIPMENT ITA NOS. 49/IND/2013 & 803/IND/2014 18 COURT DEALING WITH IDENTICAL QUESTION HAS ALREADY D ECIDED THE MATTER AGAINST THE PRESENT APPELLANT-REVENUE. 8 THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND RESPECTFULLY FOLLOWING THE DECISION OF JURISDICTION AL HIGH COURT, WE ARE NOT INCLINED TO INTERFERE WITH THE FIN DINGS OF THE LD. CIT(A). ACCORDINGLY, THE APPEAL OF THE REVENU E IS DISMISSED. 6. THE CO FILED BY THE ASSESSEE IS OF SUPPORTIVE NATURE, THEREFORE, SAME IS ALSO DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND CO FILED BY THE ASSESSEE ARE DISMISSED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 5.1.2017. SD/- SD/- (O.P. MEENA) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5.1.2017