CIT Vs. RAM PISTONS & RINGS LTD

JUDGEMENT

(1.) C .M. APPL. No.804/2012 (for exemption) in ITA No.45/2012. Exemption allowed subject to all just exceptions. The application stands disposed of. These appeals by the Revenue under section 260A of the Income Tax Act, 1961, (Act, for short) pertain to the assessment years 1998-99, 2000-01, 2001-02, 2002-03 & 2004-05. We are inclined to dispose of these appeals by this common order as the issue raised is ibidem and identical. The appeal for the assessment years 2000-01 to 2002-03 were disposed of by the Income Tax Appellate Tribunal (Tribunal, for short) vide order dated 25th February, 2011 and the appeals for the assessment years 1998-99 and 2004-05 were disposed of by the tribunal vide order dated 31st May, 2011.

(2.) WE note one distinguishing factor in respect of assessment year 1998-99. The tribunal by an earlier order dated 24th April, 2003 in ITA No.1814/2002 had passed an order of remit and restored the matter to the Assessing Officer to examine the question the payment of commission to agents.

(3.) IN the assessment year 1998-99, the Commissioner of Income Tax(Appeals) had allowed the application filed by the respondent-assessee for additional evidence under Rule 46A of Income Tax Rules, 1962. The respondent-assessee had placed on record the new supply contract issued by the Association of the State Road Transport Undertakings, which included names of the agents. The CIT(Appeals) referred to the factual matrix/accounts and had highlighted the fact that the assessee had claimed commission expense of Rs.3.34 crores and discount of Rs.14.58 crores during the year. Out of this, commission of Rs.22,94,485/- was paid to various agents in respect of supplies made to State Road/Municipal Transport Corporation/Undertakings. The Assessing Officer had disallowed commission payment on the supplies made to the State Road/Municipal Transport Corporation/Undertakings and not in respect of other sales. We may only note here that the figures are virtually identical or similar in other years. The CIT(Appeals) allowed the appeal of the respondent-assessee but restricted the claim of commission to 4.5% of the total sales made to the State Road/Municipal Transport Corporation/Undertakings.