MILAP TEXTILE MILLS Vs. DY CIT

JUDGEMENT

(1.) These two cross appeals by department and assessee are directed against the order of Commissioner (Appeals) dated 13-12-1993. Since the main issue involved is common and the appeals were heard together, so these are being disposed of by this consolidated order for the sake of convenience.

(2.) The only issue raised by the assessee and ground No. 2 in departmental appeal relate to the sustenance/deletion of commission expenses.

(3.) Before the learned Commissioner (Appeals) it was stated that the commission paid to the sister concern was not abnormal and was quite in consonance with the rate of commission payment made to third party. It was stated that such commission was paid in the past also but no disallowance had been made. The assessee agreed that in the subsequent year commission payment to this party had been reduced to 2.75 per cent, however stated that the assessing officer had not seen the background for reduction in rate of commission. Therefore, he was not justified in disallowing the commission at 0.75 per cent.