Maxim Tubes Co. Pvt. Ltd., Ahmedabad V. The Asstt. Commissioner of Income Tax, Circel-2(1)(2), Ahmedabad

ITA 88/AHD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8319 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Ahmedabad
• Assessment Year: 2013-2014
• Appeal Filed On: 10-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L P JAIN DATES OF HEARING OF
• Assessee Lawyers: A C SHAH
• Keywords: Advance ruling; TDS
• Section: 195; 72; 37

Judgement Text

MAXIM TUBE CO . PVT . LTD ITA NO. 88/AHD/2017 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD C BENCH, AHMEDABAD [ CORAM : HON BLE JUSTICE P . P BHAT T , PRESIDENT AND PRAMOD KUMAR, VP ] ITA NO . 88 / AHD / 2017 ASSESSMENT YEAR : 2013 - 14 MAXIM TUBE CO . PVT . LTD . ............. APPELLANT B - 92, RIVERA ANTILIA, NR . PINACLE CORPORATE ROAD PRAHLADNAGAR, VEJALPUR, AHMEDABAD 380051 ( PAN NO . AAECM8083E ) VS ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE - 2 ( 1 )( 2 ) ....... RESPONDENT AHMEDABAD APPEARANCES BY A . C SHAH FOR THE APPELLANT L . P JAIN FOR THE RESPONDENT DATES OF HEARING OF THE APPEAL : DECEMBER 20 TH , 2019 DATE OF PRONOUNCING THIS ORDER : MARCH 12 TH , 2020 O R D E R PER BENCH: 1 . THIS APPEAL, FILED BY THE ASSESSEE, IS DIRECTED AGAINST LEARNED CIT ( A ) S ORDER DATED 23 RD DECEMBER 2016, IN THE MATTER OF ASSESSMENT UNDER SECTION 143 ( 3 ) OF THE INCOME TAX ACT 1961, FOR THE ASSESSMENT YEAR 2013 - 14 . MAXIM TUBE CO . PVT . LTD ITA NO. 88/AHD/2017 PAGE 2 OF 7 2 . IN THE FIRST GROUND OF APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GRIEVANCE : - 1 . THE LEARNED CIT ( A ) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF COMMISSION OF RS . 33,98,868 /- ON THE GROUND THAT THERE IS NO EVIDENCES THOUGH FURNISHED IN AS MUCH AS THE COMMISSION PAID IS GENUINE AND THAT ALL THE EVIDE NCES WERE PRODUCED BEFORE THE CIT ( A ). 1 . 1 THE APPELLANT SAYS AND SUBMITS THAT THE LEARNED CIT ( A ) FAILED TO APPRECIATE THE EVIDENCES SUBMITTED WITHOUT ANY INQUIRY . 3 . SO FAR AS THIS GRIEVANCE OF THE ASSESSEE IS CONCERNED ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF . DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DISALLOWED RS . 57,02,641 /- UNDER SECTION 40 ( A )( I ) ON ACCOUNT OF NON - DEDUCTION AT SOURCE FROM COMMISSION PAYMENTS TO NON - RESIDENTS . ON MERITS WHILE ASSESSING OFFIC ER DID TAKE NOTE OF THE FACT THAT THE COPIES OF COMMISSION AGREEMENTS, BASIS OF COMMISSION CHARGED, COPIES OF DEBIT NOTES ETC . WERE FILED, HE REJECTED THE SAME BY NOTING THAT AGREEMENTS ARE NOT NOTARIZED AND DO NOT EVEN HAVE THE OFFICE SEAL OF THE COMMISSI ON AGENT AND BILLS RAISED BY THE AGENTS ARE NOT SIGNED BY THE AUTHORIZED PERSONS . IT WAS ALSO NOTED THAT GENUINENESS OF THE TRANSACTIONS AND THE JUSTIFICATION AGENT DOES NOT COMMENSURATE WITH THE PROGRESS OF THE SALES COMPARED TO THE PRECEDING YEARS . A D IS ALLOWANCE OF RS . 57,02,641 /- WAS THUS MADE . AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT ( A ) BUT WITHOUT MUCH SUCCESS . SO FAR AS PAYMENT OF COMMISSION PAYMENT OF RS 23,03,773 /- WAS CONCERNED, FOLLOWING DECISION OF THE TRIBUNAL IN ASSESS EE S OWN CASE, THE DISALLOWANCE WAS DELETED . THE BALANCE AMOUNT OF RS . 33,98,868 /- WAS CONFIRMED . THE ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BEFORE US . 4 . WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD ANY DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION . 5 . WE HAVE NOTED THAT SO FAR AS THE DISALLOWANCE UNDER SECTION 40 ( A )( I ) IS CONCERNED, IT DOES NOT COME INTO PLAY AT ALL BECAUSE THE COMMISSION TO FOREIGN AGENT, RENDERING SERVICES OUTSIDE INDIA AS IN THIS CASE DOES NOT CONSTITUTE INCOME TAXABLE IN INDIA, AS HELD BY US IN ASSESEE S OWN CASE FOR THE ASSESSMENT YEAR 2013 - 14 WHEREIN WE HAVE, INTER ALIA, OBSERVED AS FOLLOWS :- 6 . WE HAVE NOTED FROM THE MATERIAL PLACED BEFORE US IN THE PAPER BOOK THAT THERE WAS AGREEMENT BETWEEN THE ASSESSEE AND GRITECH STEEL PRODUCTS & SERVICES, MILANO INASMUCH AS THE SAID COMMISSION AGENT VIDE LETTER DATED 01 . 12 . 2011 HAS CONFIRMED THAT MAXIM TUBE CO . PVT . LTD ITA NO. 88/AHD/2017 PAGE 3 OF 7 THE SAID CONCERN IS ACTING AS SALES AGENCY ON BEHALF OF MAXIM TUBES COMPANY P VT . LTD . AND THAT THE SALES ACTIVITY IS BASED ON AN AGREED COMMISSION LEVEL . WE HAVE ALSO PERUSED COPIES OF E - MAILS EXCHANGED BETWEEN THE ASSESSEE AND THE AGENT WHICH CONSTITUTE CONTEMPORANEOUS EVIDENCE OF THE SERVICE RENDERED BY THE AGENT . THE DETAILS OF COMMISSION INVOICE AS ALSO THE SALE INVOICE IN RESPECT OF WHICH SAID COMMISSION WAS PAID IS PLACED ON RECORD IN THE PAPER BOOK FILED BEFORE US . THE PAYMENT OF COMMISSION HAS BEEN MADE THROUGH BANKING CHANNELS . IN THESE CIRCUMSTANCES, THE EXISTENCE OF COMM ISSION AGENT OR HIS IDENTITY, AS ALSO THE FACT OF RENDITION OF SERVICE CANNOT BE DISPUTED . IN THIS VIEW OF THE MATTER, SO FAR AS DISALLOWANCE HAVING BEEN MADE UNDER SECTION 37 ( 1 ) IS CONCERNED, THE SAME CANNOT BE SUSTAINED . 7 . AS REGARDS THE DISALLOWANCE UN DER SECTION 40 ( A )( I ) , WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF A CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ITO VS . EXCELL CHEMICALS INDIA LIMITED ( 2016 ) 72 TAXMANN . COM 284 WHEREIN THE CO - ORDINATE BENCH HAS INT ER ALIA OBSERVED AS FOLLOWS :- 5 . THE BASIC CONTENTION OF THE ASSESSING OFFICER IS THAT IN VIEW OF THE SCOPE OF DEEMING FICTION UNDER SECTION 9 ( 1 )( I ) , WHICH INTER ALIA HOLDS THAT ANY INCOME 'ARISING DIRECTLY OR INDIRECTLY FROM ANY BUSINESS CONNECTION IN I NDIA' WILL BE DEEMED TO ACCRUE OR ARISE IN INDIA, READ WITH THE SCOPE OF CHARGING SECTION 5 ( 2 ) , WHICH ENABLES TAXABILITY OF A NON - RESIDENT IN RESPECT OF ' INCOME ACCRUING OR ARISING OR DEEMED TO ACCRUE OR ARISE, IN INDIA, INCOME ARISING IN THE HANDS OF THE NON - RESIDENT COMMISSION AGENT IS TAXABLE IN INDIA . WHAT HE OVERLOOKS, HOWEVER, IS THE IMPACT OF EXPLANATION 1 TO SECTION 9 ( 1 )( I ) WHICH STATES THAT ' FOR THE PURPOSE OF THIS CLAUSE [ I . E . 9 ( 1 )( I )] , IN THE CASE OF A BUSINESS OF WHICH ALL THE OPERATIONS ARE NOT CARRIED OUT IN INDIA, THE INCOME OF THE BUSINESS DEEMED UNDER THIS CLAUSE TO ACCRUE OR ARISE IN INDIA SHALL BE ONLY SUCH PART OF THE INCOME AS IS REASONABLY ATTRIBUTABLE TO THE OPERATIONS CARRIED OUT IN INDIA '. ONLY IF HE WAS TO TAKE INTO ACCOUNT THE S COPE OF EXPLANATION 1 TO SECTION 9 ( 1 )( I ) , COUPLED WITH THE FACT THAT ADMITTEDLY NO PART OF OPERATIONS OF THE NON - RESIDENT COMMISSION AGENT WERE CARRIED OUT IN INDIA, HE WOULD HAVE REALIZED THAT EVEN THOUGH DEEMING FICTION UNDER SECTION 9 ( 1 )( I ) IS TRIGGERED ON THE FACTS OF THIS CASE, ON ACCOUNT OF COMMISSION AGENT'S BUSINESS CONNECTION IN INDIA, IT HAS NO IMPACT ON TAXABILITY IN THE HANDS OF COMMISSION AGENT BECAUSE ADMITTEDLY NO BUSINESS OPERATIONS WERE CARRIED OUT IN INDIA, AND, THEREFORE EXPLANATION 1 TO SECTION 9 ( 1 )( I ) COMES INTO PLAY . THE SEEMINGLY ERUDITE MAXIM TUBE CO . PVT . LTD ITA NO. 88/AHD/2017 PAGE 4 OF 7 ANALYSIS BY THE ASSESSING OFFICER IS BASED ON A HALFBAKED LEGAL THEORY, AND THE CONCLUSIONS, THEREFORE, CLEARLY FALLACIOUS . 6 . AS FOR THE AAR RULING IN THE CASE OF SKF BOILERS AND DRIERS ( P .) LTD . ( SUP RA ) , ON WHICH SO M UCH RELIANCE HAS BEEN PLACED BY THE ASSESSING OFFICER, WE FIND THAT THIS DECISION MERELY FOLLOWS THE EARLIER RULING IN THE CASE OF RAJIV MALHOTRA ( SUPRA ) WHICH, IN OUR CONSIDERED VIEW, DOES NOT TAKE INTO ACCOUNT THE IMPACT OF EXPLANATION 1 TO SECTION 9 ( 1 )( I ) PROPERLY . THAT WAS A CASE IN WHICH THE NON - RESIDENT COMMISSION AGENT WORKED FOR PROCURING PARTICIPATION BY OTHER NONRESIDENT ENTITIES IN A FOOD AND WINE SHOW IN INDIA, AND THE CLAIM OF THE ASSESSEE WAS THAT SINCE THE AGENT HAS NOT CARRIED OUT ANY BUSINESS OPERATIONS IN INDIA, THE COMMISSION AGENT WAS NOT CHARGEABLE TO TAX IN INDIA, AND, ACCORDINGLY, THE ASSESSEE HAD NO OBLIGATION TO DEDUCT TAX AT SOURCE FROM SUCH COMMISSION PAYMENTS TO THE NON - RESIDENT AGENT . ON THESE FACTS, THE AUT HORITY FOR ADVANCE RULING, INTER ALIA, OPINED THAT ' NO DOUBT THE AGENT RENDERS SERVICES ABROAD AND PURSUES AND SOLICITS EXHIBITORS THERE IN THE TERRITORY ALLOTTED TO HIM, BUT THE RIGHT TO RECEIVE THE COMMISSION ARISES IN INDIA ONLY WHEN EXHIBITOR PARTICIPA TES IN THEINDIA INTERNATIONAL FOOD & WINE SHOW ( TO BE HELD IN INDIA ) , AND MAKES FULL AND FINAL PAYMENT TO THE APPLICANT IN INDIA AND THAT THE COMMISSION INCOME WOULD, THEREFORE, BE TAXABLE UNDER SECTION 5 ( 2 )( B ) READ WITH SECTION 9 ( 1 )( I ) OF THE ACT '. THE AUT HORITY FOR ADVANCE RULING ALSO HELD THAT THE FACT THAT THE AGENT RENDERS SERVICES ABROAD IN THE FORM OF PURSUING AND SOLICITING PARTICIPANTS AND THAT THE COMMISSION IS REMITTED TO HIM ABROAD ARE WHOLLY IRRELEVANT FOR THE PURPOSE OF DETERMINING SITUS OF HIS INCOME WE DO NOT CONSIDER THIS APPROACH TO BE CORRECT . WHEN NO OPERATIONS OF THE BUSINESS OF COMMISSION AGENT IS CARRIED ON IN INDIA ,THE EXPLANATION 1 TO SECTION 9 ( 1 )( I ) TAKES THE ENTIRE COMMISSION INCOME FROM OUTSIDE THE AMBIT OF DEEMING FICTION UNDER SE CTION 9 ( 1 )( I ) , AND, IN EFFECT, OUTSIDE THE AMBIT OF INCOME 'DEEMED TO ACCRUE OR ARISE IN INDIA' FOR THE PURPOSE OF SECTION 5 ( 2 )( B ). THE POINT OF TIME WHEN COMMISSION AGENT'S RIGHT TO RECEIVE THE COMMISSION FRUCTIFIES IS IRRELEVANT TO DECIDE THE SCOPE OF EXPLANATION 1 TO SECTION9 ( 1 )( I ) , WHICH IS WHAT IS MATERIAL IN THE CONTEXT OF THE SITUATION THAT WE ARE IN SEISIN OF . THE REVENUE'S CASE BEFORE US HINGES ON THE APPLICABILITY OF SECTION9 ( 1 )( I ) AND, IT IS, THEREFORE, IMPORTANT TO ASCERTAIN AS TO WHAT EXTENT WOULD THE RIGOUR OF SECTION 9 ( 1 )( I ) BE RELAXED BY EXPLANATION 1 TO SECTION 9 ( 1 )( I ). WHEN WE EXAMINE THINGS FROM THIS PERSPECTIVE, THE INEVITABLE CONCLUSION IS THAT SINCE NO PART OF THE OPERATIONS OF THE BUSINESS OF THE COMMISSION AGENT IS CARRIED OUT IN I NDIA, NO PART OF THE MAXIM TUBE CO . PVT . LTD ITA NO. 88/AHD/2017 PAGE 5 OF 7 INCOME OF THE COMMISSION AGENT CAN BE BROUGHT TO TAX IN INDIA . IN THIS VIEW OF THE MATTER, VIEWS EXPRESSED BY THE HON'BLE AAR, WHICH DONOT FETTER OUR INDEPENDENT OPINION ANYWAY IN VIEW OF ITS LIMITED BINDING FORCE UNDER S . 245S OF THE ACT, DO NOT IMPRESS US, AND WE DECLINE TO BE GUIDED BY THE SAME . THE STAND OF THE REVENUE, HOWEVER, IS THAT THESE RULINGS, BEING FROM SUCH A HIGH QUASI - JUDICIAL FORUM, EVEN IF NOT BINDING, CANNOT SIMPLY BE BRUSHED ASIDE EITHER, AND THAT T HESE RULINGS AT LEAST HAVE PERSUASIVE VALUE . WE HAVE NO QUARREL WITH THIS PROPOSITION . WE HAVE, WITH UTMOST CARE AND DEEPEST RESPECT, PERUSED THE ABOVE RULINGS RENDERED BY THE HON'BLE AUTHORITY FOR ADVANCE RULING . WITH GREATEST RESPECT, BUT WITHOUT SLIGHTEST HESITATION, W E HUMBLY COME TO THE CONCLUSION THAT WE ARE NOT PERSUADED BY THESE RULINGS . 7 . IN VIEW OF THE ABOVE DISCUSSIONS, IN OUR CONSIDERED VIEW, LEARNED CIT ( A ) WAS INDEED JUSTIFIED IN HOLDING THAT GIVEN THE UNDISPUTED AND UNCONTROVERTED FACTS OF THIS CASE, THE N ON - RESIDENT COMMISSION AGENTS WERE NOT TAXABLE IN INDIA IN RESPECT OF THEIR COMMISSION EARNINGS FROM ORDERS PROCURED ABROAD . 8 . IT IS ALSO NOW WELL SETTLED IN LAW THAT WHEN THE PAYMENT MADE TO A NON - RESIDENTDOES NOT HAVE AN ELEMENT OF INCOME, TAX DEDUCTIO N SOURCE REQUIREMENTS UNDERSECTION 195 ( 2 ) DO NOT COME INTO PLAY AT ALL . HON'BLE SUPREME COURT, IN THE CASEOF G E INDIA TECHNOLOGY CENTRE ( P .) LTD . V . CIT [ 2010 ] 327 ITR 456 / 193 TAXMAN234 / 7 TAXMANN . COM 18, HAS INTER ALIA OBSERVED AS FOLLOWS : IN OUR VIEW, SECTION 195 ( 2 ) IS BASED ON THE ' PRINCIPLE OF PROPORTIONALITY '. THE SAID SUB - SECTION GETS ATTRACTED ONLY IN CASES WHERE THE PAYMENT MADE IS ACOMPOSITE PAYMENT IN WHICH A CERTAIN PROPORTION OF PAYMENT HAS AN ELEMENT OF ' INCOME ' CHARGEABLE TO TAX IN INDIA . IT IS IN THIS CONTEXT THAT THE SUPREME COURT STATED, ' IF NO SUCH APPLICATION IS FILED, INCOME - TAX ON SUCH SUM IS TO BE DEDUCTED AND IT IS THE STATUTORY OBLIGATION OF THE PERSON RESPONSIBLE FOR PAYING SUCH 'SUM' TO DEDUCT TAX THEREON BEFORE MAKING PAYMENT . HE HAS TO DISCHARGE THE OBLIGATION TO TDS '. IF ONE READS THE OBSERVATION OF THE SUPREME COURT, THE WORDS ' SUCH SUM ' CLEARLY INDICATE THAT THE OBSERVATION REFERS TO A CASE OF COMPOSITE PAYMENT WHERE THE PAYER HAS A DOUBT REGARDING THE INCLUSION OF AN AMOUNT I N SUCH PAYMENT WHICH IS EXIGIBLE TO TAX IN INDIA . IN OUR VIEW, THE ABOVE OBSERVATIONS OF THIS COURT IN TRANSMISSION CORPORATION CASE ( SUPRA ) WHICH IS PUT IN ITALICS HAS BEEN COMPLETELY, WITH RESPECT, MISUNDERSTOOD BY THE MAXIM TUBE CO . PVT . LTD ITA NO. 88/AHD/2017 PAGE 6 OF 7 KARNATAKA HIGH COURT TO MEAN THAT I T IS NOT OPEN FOR THE PAYER TO CONTEND THAT IF THE AMOUNT PAID BY HIM TO THE NONRESIDENT IS NOT AT ALL ' CHARGEABLE TO TAX IN INDIA ' , THEN NO TDS IS REQUIRED TO BE DEDUCTED FROM SUCH PAYMENT . THIS INTERPRETATION OF THE HIGH COURT COMPLETELY LOSES SIGHT OF T HE PLAIN WORDS OF SECTION 195 ( 1 ) WHICH IN CLEAR TERMS LAYS DOWN THAT TAX AT SOURCE IS DEDUCTIBLE ONLY FROM ' SUMS CHARGE ABLE ' UNDER THE PROVISIONS OF THE I . T . ACT, I . E . , CHARGEABLE UNDER SECTIONS 4, 5 AND 9 OF THE I . T . ACT . ( EMPHASIS BY UNDERLINING SUPPLIE D BY US ) 9 . CLEARLY, THEREFORE, FOR APPLICATION OF SECTION 195, IT IS SINE QUA NON THAT THE PAYMENT TO NO - RESIDENT MUST HAVE AN ELEMENT OF INCOME LIABLE TO BE TAXED UNDER THE INDIAN INCOME TAX ACT, 1961 . ON THE FACTS OF THIS CASE, AS WE HAVE ALREADY CONCLU DED, NO PART OF THE REMITTANCE TO THE COMMISSION AGENT WAS TAXABLE IN INDIA . THE ASSESSEE WAS, THEREFORE, NOT UNDER ANY OBLIGATION, ON THE FACTS OF THIS CASE, TO DEDUCT ANY TAX AT SOURCE FROM THE COMMISSION PAYMENTS TO THE NONRESIDENTS . SINCE THERE WAS NO OBLIGATION TO DEDUCT TAX AT SOURCE, THE VERY FOUNDATION OF IMPUGNED DISALLOWANCE UNDER SECTION 40 ( A )( I ) CEASES TO HOLD GOOD IN LAW . LEARNED CIT ( A ) WAS, THEREFORE, QUITE JUSTIFIED IN DELETING THE IMPUGNED DISALLOWANCE . WE UPHOLD HIS ACTION, AND DISMISS THE GRIEVANCE RAISED BY THE ASSESSING OFFICER . 8 . THE DECISION OF THE AUTHORITY FOR ADVANCE RULING, IN THE CASE OF IN THE CASE OF RAJIVE MALHOTRA [ 2006 ] 286 ITR 564, ON WHICH RELIANCE HAS BEEN PLACED BY THE AUTHORITIES BELOW HAS BEEN DISCUSSED AND DISTINGUISHED IN THE AFORESAID DECISION . WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE COORDINATE BENCH . ACCORDINGLY, THE DISALLOWANCE UNDER SECTION 40 ( A )( I ) WHICH HAS BEEN CONFIRMED BY THE LEARNED CIT ( A ) IS ALSO DEVO ID OF LEGALLY SUSTAINABLE MERITS . IN VIEW OF THESE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE DISALLOWANCE OF RS . 22,48,659 /- IN RESPECT OF COMMISSION PAID TO THE NONRESIDENT WHICH WAS UPHELD BY THE LEARNED CIT ( A ) DESERVES TO BE DELETED . WE DIRECT SO . 6 . WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER ON THIS ASPECT, AND, ACCORDINGLY, THE VERY CONCEPTUAL JUSTIFICATION FOR DISALLOWANCE UNDER SECTION 40 ( A )( I ) CEASES TO HOLD GOOD IN LAW . SO FAR AS DISALLOWANCE UNDER SECTION 37 ( 1 ) IS CONCERNED, WE FIND THAT EXCEPT FOR PAYMENT OF RS . 76,952 /- TO M / S ONDREJOVIA AND OF RS . 2,65,749 /- TO M / S . TAD, ALL THE DETAILS, INCLUDING COMMISSION AGREEMENTS AND COMPLETE DETAILS, WERE PLACED ON RECORD, AND NO SPECIFI C LEGALLY SUSTAINABLE OBJECTIONS WERE RAISED BY THE ASSESSING OFFICER . THE LACK OF OFFICE SEAL AND NOTARY MAXIM TUBE CO . PVT . LTD ITA NO. 88/AHD/2017 PAGE 7 OF 7 VERIFICATION CANNOT BE REASON ENOUGH TO DISALLOW THE COMMISSION EXPENSES . SIMILARLY, WHETHER OVERALL SALES HAVE GONE UP OR NOT IS AN IRRELEVANT CONSID ERATION, NOT GERINANE IN THIS CONTEXT . EVEN THE PAYMENT OF RS . 76,952 /- TO M / S ONDREJOVICA AND OF RS . 2,65,749 /- TO M / S TAD IS MADE THROUGH BANKING CHANNELS, RELEVANT INVOICE DETAILS ARE ON RECORD, AND, LOOKING TO SMALLNESS OF AMOUNTS, THE NEED OF FORMAL AGREEMENT CANNOT BE REASON FOR MAKING THE IMPUGNED DISALLOWANCE . IN THE LIGHT OF THESE DISCUSSIONS, AND BEARING IN MIND ENTIRETY OF THE CASE, WE DELETE THE IMPUGNED DISALLOWANCE OF RS . 33,98,868 /- AS WELL . THE ASSESSEE GETS THE RELIEF ACCORDINGLY . 7 . GROUN D NO 1 IS THUS ALLOWED . 8 . IN THE SECOND GROUND OF APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUND :- 2 . THE LEARNED CIT ( A ) HAS ERRED IN CONFIRMING THE ROC FEES OF RS . 1,75,000 /- UNDER SECTION 35D ON THE GROUND THAT THERE IS NO SUCH PROVISION IN SECTION 35D IN AS MUCH AS THERE IS CLEAR PROVISION IN SECTION 35D ABOUT ELIGIBLE EXPENDITURE UNDER SECTION 35D . 9 . LEARNED COUNSEL FOR THE ASSESSEE DID NOT, FOR SMALLNESS OF AMOUNT, PRESS THIS GROUND OF APPEAL . IT IS, ACCORDINGLY, DISMISSED AS NOT PRESSED . 10 . GROUND NO 2 IS THUS DISMISSED . 11 . IN THE RESULT, THE APPEAL IS PARTLY ALLOWED IN THE TERM INDICATED ABOVE . ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON THE NOTICE BOARD. SD/ - SD/ - JUSTICE P . P BHATT PRAMOD KUMAR ( PRESIDENT ) ( VICE PRESIDENT ) AHMEDABAD, DATED THE 12 TH DAY OF MARCH , 2020 COPIES TO : ( 1 ) THE APPELLANT ( 2 ) THE RESPONDENT ( 3 ) CIT ( 4 ) CIT ( A ) ( 5 ) DR ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD