DCIT, NEW DELHI vs. M/S. MARUTI INSURANCE DISTRIBUTION SERVICE LTD., NEW DELHI

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ITA 5194/DEL/2015Status: DisposedITAT Delhi26 October 2017AY 2006-073 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Delhi High Court had reversed the earlier ITAT order, allowing the assessee's appeal. Consequently, the revenue's appeal became infructuous.

What were the facts?

The assessee, a corporate insurance agent, made payments of remuneration to its dealers. The Assessing Officer disallowed a portion of these payments as excessive. The CIT(A) deleted this disallowance, but the ITAT initially set aside the matter for fresh adjudication.

What were the issues?

Whether the disallowance of remuneration paid to dealers was justified, considering a subsequent High Court ruling that overturned a prior ITAT decision.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 254

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “d”: NEW DELHI

Before: SHRI H.S.SIDHU & SHRI PRASHANT MAHARISHI

For Appellant: Shri Rohit Jain, CA, Ms Tejaswi Jain, CA
For Respondent: Shri Shravan Gotru, Sr. DR, Shri Rohit Jain, CA, Ms Tejaswi Jain, CA
Hearing: 24/08/2017Pronounced: 26/10/2017

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the revenue against the order of the ld CIT (A)-6, New Delhi dated 27.05.2015 for the Assessment Year 2006-07. 2. The Revenue has raised the following grounds of appeal:- “1. Whether on the facts and circumstances of the case and in law, the lc CIT(A) erred in deleting the disallowance of Rs. 8998913/- made on account of excessive payment of remuneration to dealers.

2. That the order of the ld CIT(A) is erroneous and is not tenable on facts and in law.”

3. Brief facts of the case are that assessee is a company engaged in the business of vehicle insurance as corporate insurance agent of insurance company. It conducts its business through the extensive Maruti dealer network consisting of over 300 sales outlets and 400 dealer workshops spread all over the country. The assessee is 100% wholly owned subsidiary of Maruti Suzuki India Ltd and has tied up with national insurance company limited as they are licensed corporate insurance agent and is actively involved in insurance business. Pursuant to the order of the Hon’ble national company law tribunal dated 27/06/2017 this company is merged with Maruti Suzuki India Ltd w.e.f. 01/04/2016.

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