COMMISSIONER OF INCOME TAX vs. AJAY INDUSTRIAL CORPORATION

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 961/2010 . . . . COMMISSIONER OF INCOME TAX ..... Appellant Through: Ms. Rashmi Chopra, Advocate. . versus . AJAY INDUSTRIAL CORPORATION ..... Respondent Through: Mr. O.S. Bajpai, Senior Advocate with Mr. B.K. Singh, Advocate. . . CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN . O R D E R 29.07.2010 Heard Ms. Rashmi Chopra, learned counsel for appellant and Mr. O.S. Bajpai, learned senior counsel for respondent. In this appeal preferred under Section 260A of the Income Tax Act, 1961 (for brevity ?the Act), the legal sustainability of the order dated 29th May, 2009 passed by the Income Tax Appellate Tribunal (in short ?tribunal?) is called in question. . ITA 961/2010 page 1 of 3. . . The singular question that arose before the tribunal was whether the assessee was entitled to deduction for the commission paid by it to the authorised agents who were dealing with the matters pertaining to Government tender. On a perusal of the order passed by the tribunal it is perceptible that the tribunal has referred to the order of the CIT(A) who in turn has referred to the earlier assessments orders for the years 1999-2000, 2000-2001, 2001-2002 and 2002-2003 and granted deduction. The tribunal took note of the fact that the payment of commission as a matter of fact was not disputed. It was contended before the tribunal that the same was not admissible under Section 37 of the Act. It is worth noting that the tribunal has not only referred to the orders passed by the CIT(A), but also referred to the details submitted by the assessee and come to hold that the said deduction is allowable. Ms. Rashmi Chopra, learned counsel for appellant contended that the payment of commission could be allowed as a business expenditure but there has to be deduction at source. Mr. O.S. Bajpai, learned senior counsel for respondent submitted that in the notice inviting tender, there is a stipulation that ITA 961/2010 page 2 of 3. . the Principal or the authorised agent can negotiate and carry on the details afterwards. It is also submitted by Mr. Bajpai that the question of deduction at source was never raised by the revenue before any of the authorities. In view of the aforesaid, we are of the considered opinion that the order passed by the tribunal totally rests on facts and there is no question of law involved. In the result, the appeal, being devoid of merit, stands dismissed without any order as to costs. . . . . CHIEF JUSTICE . . . MANMOHAN, J JULY 29, 2010 js . . . . . . . . . . . . ITA 961/2010 page 3 of 3. . 9 $