DCIT, Bangalore V. Smt. Devika Shekar, Bangalore

ITA 922/BANG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2290 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-06-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 20-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BIJOY KUMAR PANDA
• Assessee Lawyers: P A BHAT
• Keywords: Maximum Marginal Rate; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N. BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NO.922/BANG/2012 ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 9(1), BANGALORE. VS. SMT. DEVIKA SHEKAR, SF-1, KARUNA COMPLEX, 337, SAMPIGE ROAD, 11 TH CROSS, MALLESWARAM, BANGALORE 560 003. PAN : ADOPS 5059A APPELLANT RESPONDENT C.O. NO.21/BANG/2013 (IN ITA NO.922/BANG/2012) ASSESSMENT YEAR : 2007-08 SMT. DEVIKA SHEKAR, SF-1, KARUNA COMPLEX, 337, SAMPIGE ROAD, 11 TH CROSS, MALLESWARAM, BANGALORE 560 003. PAN : ADOPS 5059A VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 9(1), BANGALORE. CROSS OBJECTOR RESPONDENT REVENUE BY : SHRI BIJOY KUMAR PANDA, ADDL.CIT(DR) ASSESSEE BY : SHRI P.A. BHAT, ADVOCATE DATE OF HEARING : 10.6.2013 DATE OF PRONOUNCEMENT : 10.06.2013 ITA NO.922/BANG/2012 & CO NO.21/BANG/2013 PAGE 2 OF 11 O R D E R PER BENCH ITA 922/B/12 IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 21.05.2012 OF THE CIT(APPEALS)-V, BANGALORE RELATIN G TO ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS FILED CROSS OBJECTION IN CO NO.21/B/13 AGAINST THE VERY SAME ORDER OF THE CIT(APPEALS). 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL AND THE CO IS WITH REGARD TO THE CORRECTNESS OF THE ORDER O F CIT(A) PARTLY DELETING THE DISALLOWANCE OF EXPENSES UNDER THE HEAD COMMIS SION MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SEC TION 40A(2)(B) OF THE INCOME TAX ACT, 1961 (THE ACT). 3. THE MATERIAL FACTS GIVING RISE TO THE APPEAL AND THE CROSS OBJECTION ARE AS FOLLOWS. THE ASSESSEE IS AN INDIVIDUAL. SH E IS ENGAGED IN THE BUSINESS OF MANUFACTURE OF ENGINEERING COMPONENTS. WHILE COMPUTING INCOME FROM BUSINESS, THE ASSESSEE CLAIMED A DEDUCT ION OF RS.34,12,034 UNDER THE HEAD COMMISSION PAID TO ONE SHRI V.K. S HEKAR, WHO HAPPENS TO BE THE HUSBAND OF THE ASSESSEE. ACCORDING TO THE A O, SINCE THE PAYMENT WAS MADE TO A PERSON COVERED U/S. 40A(2)(B) OF THE ACT, ALLOWABILITY OF SUCH EXPENSES HAS TO BE JUDGED KEEPING IN MIND THE PARAMETERS LAID DOWN IN THE SECTION 40A(2)(A) OF THE ACT VIZ., PAYMENT MADE FOR ANY EXPENDITURE PAID TO RELATED PARTY SHOULD NOT BE EXCESSIVE OR UN REASONABLE HAVING ITA NO.922/BANG/2012 & CO NO.21/BANG/2013 PAGE 3 OF 11 REGARD TO THE FAIR MARKET VALUE OF THE SERVICES FOR WHICH THE PAYMENT IS MADE. THE AO WAS OF THE VIEW THAT THE AFORESAID PA YMENT MADE TO SHRI V.K. SHEKAR WAS EXCESSIVE AND UNREASONABLE. IN TH IS REGARD, HE WAS OF THE VIEW THAT V.K.SHEKAR WAS ONLY A B.COM. DEGREE HOLDER. THE ASSESSEE WAS PAYING V.K.SHEKAR 5% COMMISSION ON SAL E. APART FROM DIRECT SALES, THE ASSESSEE WAS ALSO DERIVING COMMIS SION FOR SERVICES RENDERED IN CONNECTION WITH ASSISTING FOREIGN PRINC IPALS IN GETTING DIRECT ORDERS FOR IMPORT TO INDIA. OVER AND ABOVE THE COM MISSION OF 5% ON SALES MADE BY THE ASSESSEE, THE ASSESSEE WAS ALSO PAYING V.K.SHEKAR, 25% OF THE COMMISSION RECEIVED BY THE ASSESSEE FOR SERVICE S RENDERED IN CONNECTION WITH ASSISTING FOREIGN PRINCIPALS IN GET TING DIRECT ORDERS FOR IMPORT TO INDIA. THE TOTAL COMMISSION PAID TO V.K. SHEKAR DURING THE PREVIOUS YEAR WAS A SUM OF RS.34,12,034. THE BREAK -UP OF THE COMMISSION PAID AS UNDERSTOOD BY THE AO IS AS FOLLO WS: (I) 5% COMMISSION ON SALES BY ASSESSEE: 26,11,884 (WRONGLY MENTIONED AS RS.27,45,044 IN THE ORDER OF ASSESSMEN T). (II) 25% OF THE COMMISSION RECEIVED BY THE ASSESSE E FOR SERVICES RENDERED IN CONNECTION WITH ASSISTING FOREIGN PRINC IPALS IN GETTING DIRECT ORDERS FOR IMPORT TO INDIA RS.8,00,150/-. 4. DURING THE PREVIOUS YEAR THE ASSESSEE RECEIVED A S COMMISSION FOR SERVICES RENDERED IN CONNECTION WITH ASSISTING FORE IGN PRINCIPALS IN GETTING DIRECT ORDERS FOR IMPORT TO INDIA A SUM OF RS.32,00 ,610 OUT OF WHICH 25% ITA NO.922/BANG/2012 & CO NO.21/BANG/2013 PAGE 4 OF 11 WAS PAID TO V.K.SHEKAR AS COMMISSION. THE AO HELD THAT THE ASSESSEE WAS GETTING COMMISSION FOR SERVICES RENDERED IN CON NECTION WITH ASSISTING FOREIGN PRINCIPALS IN GETTING DIRECT ORDERS FOR IMP ORT TO INDIA. ACCORDING TO THE AO TO PAY FURTHER 25% OUT OF THE SAID COMMISSIO N TO SRI V.K.SHEKAR, WHO WAS ONLY A COMMERCE GRADUATE, WAS COMPLETELY UN REASONABLE. IN THIS REGARD THE AO ALSO HELD THAT NO SPECIFIC DETAILS HA VE BEEN FURNISHED AS TO THE EFFORTS OF SRI V.K.SHEKAR IN TERMS OF SERVICES RENDERED IN CONNECTION WITH ASSISTING FOREIGN PRINCIPALS IN GETTING DIRECT ORDERS FOR IMPORT TO INDIA. HE THEREFORE CONCLUDED THAT PAYMENT IS CLEARLY AND DELIBERATELY MADE TO REDUCE THE INCOME OF THE ASSESSEE BY INFLATED PAYME NT OF COMMISSION TO SRI V.K.SHEKAR. THUS, A SUM OF RS.8,00,150/- BEING 25% OF COMMISSION RECEIVED BY THE ASSESSEE FOR SERVICES RENDERED IN C ONNECTION WITH ASSISTING FOREIGN PRINCIPALS IN GETTING DIRECT ORDE RS FOR IMPORT TO INDIA VIZ., A SUM OF RS.32,00,610 WAS DISALLOWED BY INVOKING PROV ISIONS OF SECTION 40A(2)(B). 5. WITH REGARD TO REASONABILITY OF REMAINING COMMI SSION PAYMENT OF RS.26,11,884 (WRONGLY REFERRED AS TO AS RS.27,45,04 4/- IN THE ORDER OF ASSESSMENT, THE AO EXAMINED SHRI V.K. SHEKAR WITH R EGARD TO THE SERVICES RENDERED FOR WHICH COMMISSION WAS PAID BY THE ASSES SEE. IN ANSWER TO Q.5, HE HAD REPLIED THAT COMMISSION IS PAID TO HIM EVEN WHEN SALES ARE EFFECTED THROUGH HIM OR OTHER STAFF. THE AO ALSO N OTICED THAT SHRI V.K. SHEKAR WAS PAID SEPARATELY FOR BOARDING, LODGING AN D TRAVELLING. THE AO WAS OF THE VIEW THAT CONSIDERING SHRI V.K. SHEKARS QUALIFICATION, HE COULD ITA NO.922/BANG/2012 & CO NO.21/BANG/2013 PAGE 5 OF 11 GET ONLY 1/4 TH OF RS.27,45,045. ACCORDINGLY A SUM OF RS.20,58,78 4 BEING 75% OF RS.27,45,045 WAS ALSO DISALLOWED BY THE AO. THUS, IN ALL, A SUM OF RS.28,58,937 OUT OF COMMISSION EXPENSES WAS DISALLO WED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 6. BEFORE CIT(A), THE ASSESSEE FILED DETAILED SUBM ISSION ALONG WITH A NUMBER OF DOCUMENTS AND FINANCIAL STATEMENTS OF THE ASSESSEE AND THAT OF HER HUSBAND SRI. V.K. SHEKAR. IT WAS POINTED OUT TH AT SRI. V. K. SHEKAR HAD 30 YEARS EXPERIENCE IN MARKETING ELECTRONIC TOOLS A ND HE IS THE MAIN PERSON MANAGING THE MARKETING DIVISION OF THE BUSIN ESS OF THE ASSESSEE. IN SUPPORT OF THE CLAIM OF THE ASSESSEE DOCUMENTS W ERE ALSO FILED. IT WAS ALSO SUBMITTED THAT THE REVENUE HAD ACCEPTED THE P AYMENT OF COMMISSION BY THE ASSESSEE TO HER HUSBAND IN EARLIER AND SUBSE QUENT ASSESSMENT YEARS AND ALSO FILED COPIES OF THE ASSESSMENT ORDER S. 7. THE DOCUMENTS FILED BY THE ASSESSEE BEFORE CIT(A ) WERE FORWARDED TO THE A.O FOR EXAMINATION AND REPORT. IN HIS REMAN D REPORT THE A.O AGREED THAT THERE WAS AN AGREEMENT BETWEEN THE ASSE SSEE AND SRI. V. K SHEKAR WITH REGARD TO PERCENTAGE OF COMMISSION TO B E PAID. THE AO ALSO ACCEPTED THAT THERE WAS NO MUCH REVENUE LOSS TO TH E DEPARTMENT AS MR. SHEKAR HAD FILED HIS RETURN OF INCOME FOR THE A.Y : 2007-08 DECLARING GROSS TOTAL INCOME OF RS. 35,35,151/- WITH THE ITO, WARD- 9(4), BENGALURU, WHICH INCLUDES THE COMMISSION INCOME RECEIVED FROM THE AS SESSEE. THE CIT(APPEALS) DELETED THE ADDITION MADE BY THE AO HO LDING AS FOLLOWS:- ITA NO.922/BANG/2012 & CO NO.21/BANG/2013 PAGE 6 OF 11 6. I HAVE CAREFULLY CONSIDERED THE STAND TAKEN BY THE A.O IN THE ASSESSMENT ORDER, THE STAND TAKEN BY THE PRESEN T A.O IN THE REMAND REPORT, THE COMMENTS OF THE ADDL. CIT WHILE FORWARDING THE REMAND REPORT AND THE FACTS PRESENTE D AND THE ARGUMENTS MADE ON BEHALF OF THE APPELLANT. IT IS NO TICED THAT SRI. V. K. SHEKAR IS ASSESSED TO TAX AS PARTNER OF M/S. ELECTRONICS CONTINENTAL FROM THE A.Y: 1980-81 ONWARDS AND HE HA S BEEN FUNCTIONING IN THIS LINE OF BUSINESS FOR THE LAST 3 DECADES. HOWEVER, IT IS ALSO NOTICED THAT THOUGH PAYMENT IS MADE TO HIM BY THE APPELLANT IN THE NAME OF COMMISSION, WHAT SR I. SHEKAR IS GETTING IS REMUNERATION FOR THE SERVICES RENDERED B Y HIM. DURING THE YEAR THE APPELLANT HAD PAID RS. 34,12,034/- AS COMMISSION AND IN HIS RETURN OF INCOME SRI. SHEKAR HAD OFFERED NET INCOME FROM THIS SOURCE ONLY AT RS. 32,06,878/- AFTER CLAI MING MANY EXPENSES. THEREFORE, I AM OF THE OPINION THAT IT WI LL BE FAIR AND JUST IF THE PAYMENT OF COMMISSION IS RESTRICTED TO RS. 32,06,878/-. THEREFORE, I DIRECT THE A.O TO DISALLOW COMMISSION PAYMENT U/S- 40A(2)(B) TO THE EXTENT OF RS. 2,05,156/-. IN OTHER WORDS THE ADDITION MADE BY THE A.O IS RESTRICTED TO RS. 2,05, 156/- AND THE APPELLANT GETS A RELIEF OF RS. 26,53,778/-. 8. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), DELE TING ADDITION TO THE EXTENT OF RS.26,53,778, THE REVENUE HAS PREFERRED T HE PRESENT APPEAL BEFORE THE TRIBUNAL. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS) SUSTAINING A MINOR PORTION OF THE ADDITION MADE BY THE AO TO T HE EXTENT OF RS.2,05,156, THE ASSESSEE HAS FILED THE CO. 9. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR. THE LD. DR REITERATED THE STAND OF THE AO AS REFLECTED IN THE ASSESSMENT ORDER. THE LD. COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE CIT(APPEALS). ITA NO.922/BANG/2012 & CO NO.21/BANG/2013 PAGE 7 OF 11 10. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE ASSES SEE HAS EXPLAINED AS TO WHY V.K.SHEKAR IS BEING PAID COMMISSION ON TH E DIRECT IMPORT BY THE INDIAN PURCHASER FROM THE FOREIGN PRINCIPALS OF THE ASSESSEE. THERE ARE CERTAIN PURCHASERS LIKE UNITS SITUATED AT 100% E.O. U. WHO WOULD LIKE TO PURCHASE DIRECTLY FROM THE FOREIGN MANUFACTURERS TO AVAIL THE DUTY AND TAX BENEFIT. THE ASSESSEES HUSBAND THROUGH TRADE JOURN ALS WOULD LOCATE THE POTENTIAL PURCHASER AND QUOTE IN FOREIGN CURRENCY A ND IF CONTRACT IS ACCEPTED, THE FOREIGN MANUFACTURER WILL SUPPLY THE GOODS/EQUIPMENT TO THE INDIAN PURCHASER WITH A REQUEST TO THE ASSESSEE TO INSTALL THE SAID EQUIPMENT. THE ASSESSEE SENDS HER HUSBAND TO INSTAL L THE EQUIPMENT AND AFTER TRIAL RUN OF THE TOOLS, A REPORT WILL BE GIVE N TO THE PURCHASER ABOUT THE FUNCTIONING OF THE UNIT. THE ASSESSEE IN TERMS OF T HE PURCHASE CONTRACT TRAINS THE PURCHASERS PEOPLE ABOUT THE WORKING OF THE UNIT AND DURING THE WARRANTY PERIOD, IF THE UNIT DEVELOPS ANY MALFUNCTI ONING, THE ASSESSEE DEPUTES HER HUSBAND FOR REPAIR AND SUCCESSFUL WORKI NG. AFTER ALL THESE WORKS ARE DONE THE ASSESSEE GETS A COMMISSION OF 20 % OF THE VALUE OF THE GOODS AND THE ASSESSEE PAYS 5% I.E., 25% OF THE GRO SS COMMISSION TO HER HUSBAND. THUS THE COMMISSION IS PAID NOT JUST BECAU SE THERE IS AN IMPORT, BUT TO LOCATE THE POTENTIAL PURCHASER, QUOTE THE RA TE AND IF ACCEPTED SEE THAT THE PAYMENTS ARE MADE IN TERMS OF THE CONTRACT , INSTALL THE TOOLS/EQUIPMENT AT THE PURCHASERS PLACE, ATTEND ANY REPAIR DURING WARRANTY PERIOD. AS THE ASSESSEES HUSBAND IS THE ONLY COMPE TENT PERSON WHO CAN INSTALL EQUIPMENT AND ATTEND THE REPAIR WORK, THE A SSESSEE HAS PAID 25% OF ITA NO.922/BANG/2012 & CO NO.21/BANG/2013 PAGE 8 OF 11 THE GROSS COMMISSION. THE ASSESSEE IN HER OBJECTION HAS DETAILED THE NATURE OF THE WORK AND HAS ALSO GIVEN THE INSPECTIO N REPORT (CIPLA LTD. AND OTHERS) TO SHOW THAT HOW HER HUSBAND WAS WORKING. THE ORDER OF THE AO DOES NOT REFER TO ALL THESE ASPECTS. EVEN IN THE R EMAND REPORT OF THE AO BEFORE CIT(A), THE ABOVE ASPECTS ARE NOT DISPUTED. THUS, WE HOLD THAT THE PAYMENT OF COMMISSION BEING 25% OF THE COMMISSION R ECEIVED BY THE ASSESSEE FOR SERVICES RENDERED IN CONNECTION WITH A SSISTING FOREIGN PRINCIPALS IN GETTING DIRECT ORDERS FOR IMPORT TO I NDIA, IS REASONABLE, NOT EXCESSIVE AND WERE FOR LEGITIMATE SERVICES AND NEED S OF THE ASSESSEE. 11. WITH REGARD TO PAYMENT OF 5% COMMISSION ON SALE S, THE ASSESSEE HAS EXPLAINED THAT MR.V.K. SHEKAR, THE HUSBAND OF T HE ASSESSEE WAS PARTNER IN A FIRM ELECTRONIC CONTINENTAL WAY BACK I N THE YEAR 1979-80 AND THE SAID FIRM WAS DEALING IN ELECTRONIC EQUIPMENTS AND TOOLS. WHILE HE WAS PARTNER, HE USED TO REPRESENT THE FIRM FROM PUNE AN D USED TO TRAVEL A LOT ENQUIRING ABOUT THE REQUIREMENTS OF THE VARIOUS IND USTRIES. IN THE YEAR 1984 ONWARDS HE USED TO REPRESENT PHOTONICS INTERNATIONA L ALONG WITH THE ELECTRONICS CONTINENTAL. HER HUSBAND THUS WAS EXPOS ED TO THE WORKING OF VARIOUS EQUIPMENTS OF SIMPLE NATURE AND IN THE YEAR 1985-86 FOR TAKING IN- HOUSE TRAINING VISITED EUROPEAN COUNTRIES. AFTER CE ASING TO BE THE PARTNER, MR. SHEKAR USED TO WORK ON COMMISSION BASIS. FROM T HE COMMISSION AND THE REMUNERATION, HE PURCHASED 2 FLATS ONE FOR OFFI CE PURPOSES AND ANOTHER FOR RESIDENTIAL PURPOSES AT PUNE. WHEN THE ASSESSEE STARTED THE BUSINESS REPRESENTING FOREIGN MANUFACTURERS, HER HUSBAND WOR KED ON SALARY BASIS ITA NO.922/BANG/2012 & CO NO.21/BANG/2013 PAGE 9 OF 11 INITIALLY AND WHEN THE FIRM STARTED TRADING, ASSESS EES HUSBAND WAS APPOINTED ON COMMISSION BASIS AS THE WORK LOAD INCR EASED. AT THAT TIME HER HUSBAND WAS NOT ONLY REPRESENTING THE FIRM BUT ALSO USED TO REPRESENT OTHER COMPANIES, FIRMS AND USED TO GET COMMISSION, SERVICE COMMISSION FOR SALES AND SERVICING THE EQUIPMENTS, TOOLS. THUS THE ASSESSEES HUSBAND HAS HIS OWN BUSINESS UNIT NAMELY SAMTECH SE RVICES HAVING OFFICE AT SF2, KARUNA COMPLEX, I.E. ADJACENT TO THE ROOM O F ASSESSEES PLACE OF BUSINESS. ASSESSEES HUSBAND USED TO FILE THE RETU RN OF INCOME AS THE PROPRIETOR OF SAMTECH SERVICES, CLAIMING EXPENSES L IKE RENT, SALARY CONSUMABLES, POWER, PHONE, ETC. AS AGAINST THE PAYM ENTS FROM IMS AND OTHERS. THUS THE PAYMENTS ARE NOT JUST FOR HAVING S OLD THE EQUIPMENTS BUT FOR PROVIDING SERVICES AFTER SALES, TRAINING THE PU RCHASERS PEOPLE OF OPERATING THE EQUIPMENTS AND OTHER WORKS LIKE ATTEN DING REPAIR AFTER WARRANTY ETC. THE ABOVE EXPLANATION OF THE ASSESSE E HAS NOT BEEN REBUTTED BY THE AO. 12. THE ASSESSEE ALSO SUBMITTED THAT THE EQUIPMENTS DEALT WITH BY THE ASSESSEE ARE COMPLICATED TOOLS BUT SIMPLE TOOLS USE D FOR SOLDERING AND DESOLDERING FOR WHICH THE ASSESSEES HUSBAND HAS UN DERGONE TRAINING AT THE MANUFACTURERS PLACE. AS THE ASSESSEES TOOLS IN QUESTION DOESNT REQUIRE AN ENGINEER OR SCIENCE GRADUATE BUT A PERSO N WHO HAS EXPERIENCE OF HANDLING THE DIFFERENT TYPES OF PEOPLE AND THE A SSESSEES HUSBAND BEING EXPOSED TO THE SALES BUSINESS FOR THE LAST 25 YEARS , THE AO WAS NOT JUSTIFIED IN DISALLOWING ON THE GROUND THAT THE HER HUSBAND WAS ONLY B.COM. ITA NO.922/BANG/2012 & CO NO.21/BANG/2013 PAGE 10 OF 11 GRADUATE. AS RIGHTLY SUBMITTED ON BEHALF OF THE ASS ESSEE, IT IS NOT THE PROFESSIONAL DEGREE THAT MATTERS, BUT THE ARTICULAT ION AND CONVINCING CAPACITY THAT MATTERS AND MR.V.K. SHEKAR, THE ASSES SEES HUSBAND AS SEEN FROM HIS EXPERIENCE AND RESULTS PRODUCED HAS BEEN Q UITE SUCCESSFUL IN THIS AS THE BUSINESS HE HAS DONE IS MORE THAN THE OTHER PEOPLE WHO WORK ON COMMISSION PUT TOGETHER AND THEREFORE THE PAYMENT I S JUSTIFIED. DURING THE YEAR COMMISSION AGENTS HAVE DONE BUSINESS TO TH E TUNE OF RS.1.25 CRORE AND THE REMAINING BUSINESS WAS DONE BY THE AS SESSEES HUSBAND AND THEREFORE THERE IS NO JUSTIFICATION IN DISALLOW ING COMMISSION PAYMENT. 13. ANOTHER ASPECT IS THAT THERE IS NO LEAKAGE OF R EVENUE BECAUSE V.K.SHEKAR HAS OFFERED INCOME RECEIVED IN THE FORM COMMISSION FROM THE ASSESSEE TO TAX. BOTH THE ASSESSEE AND V.K.SHEKAR ARE TAXED AT THE MAXIMUM MARGINAL RATES. IN SUCH CIRCUMSTANCES, WE DO NOT SEE ANY ATTEMPT TO AVOID TAX BY THE ASSESSEE BY CLAIMING EX CESSIVE EXPENDITURE IN THE FORM OF COMMISSION. 14. CONSIDERING ALL THE ABOVE FACTS, THE CIT(A), IN OUR VIEW, WAS RIGHT IN RESTRICTING THE DISALLOWANCE ON ACCOUNT OF COMMISSI ON TO RS.2,05,156/-. WE DO NOT FIND ANY GROUNDS TO INTERFERE WITH THE OR DER OF THE CIT(A). 15. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERITS IN THE APPEAL BY THE REVENUE OR CO BY THE ASSESSEE. ACCORDINGLY THE SAM E ARE DISMISSED. ITA NO.922/BANG/2012 & CO NO.21/BANG/2013 PAGE 11 OF 11 16. IN THE RESULT, THE APPEAL AS WELL AS CO ARE DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF JUNE, 2013. SD/- SD/- ( N. BARATHVAJA SANKAR ) ( N.V. VASU DEVAN ) VICE PRESIDENT JUDIC IAL MEMBER BANGALORE, DATED, THE 10 TH JUNE, 2013. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.