ACIT, CHENNAI vs. TEXTILE FOR HOMES, CHENNAI

This appeal by the revenue is directed against the order of the CIT(A) -15, Chennai dated 04.02.2016 and pertains to Assessment Year 2011-12.

When the appeal was taken up for hearing, no one appeared for the assessee even though the notice of hearing was served on the assessee. Therefore, we have heard the learned Representative for the Department and proceeded to dispose off the appeal on merit. Shri Supriyo Pal, the learned representative for the department submitted that the assessee paid export commission under Section 40(a)(ia) to the extent of Rs.31,43,645/- without deducting the tax. Therefore, the Assessing Officer disallowed the claim of the assessee under Section 40(a)(ia) of the Act. On appeal by the assessee, the CIT(A) allowed the claim of the assessee by placing reliance on the decision of this Tribunal in the case of ACIT vs. M.M.Forgings Ltd. In dated 19.06.2015. According to the learned Department Representative, the revenue has already filed an appeal against the decision of the Tribunal in the case of M.M.Forgings cited supra and the same is pending before the High Court. Therefore, to keep the matter alive, the revenue has filed the appeal.

We have considered the submissions of the learned representative of the department and also perused the material available on record. From the material available on record, the assessee paid export commission for the agents who operates outside India and render service outside India. The CIT(A) further found that the foreign agents procured the orders from foreign buyers and follow up for the payments due from them. The CIT(A) further found that procuring orders cannot be said to be either rendering technical service or consultancy service. Therefore, by placing reliance on the decision of this bench of the Tribunal in the case of M.M.Forgings Ltd. cited supra, the CIT(A) allowed the claim of the assessee. Now, the contention of the department representative before this Tribunal is that the revenue has already filed an appeal against the order of the Tribunal in the case of M.M.Forgings Ltd. cited supra. Therefore, just to keep the matter alive, the appeal is filed before this Tribunal.

This Tribunal is of the considered opinion that the order passed by this Tribunal is binding all officers of the department in the state of Tamil Nadu and Pondicherry. Mere pendency of the appeal against the order of this Tribunal before the High Court cannot be a reason for not following the order of the Tribunal. It is not the case of the revenue that the operation of the order of the Tribunal in M.M.Forgings was stayed by the High Court. Therefore, this Tribunal is of the considered opinion that the CIT(A) has rightly placed his reliance on the orders of the Tribunal in M.M.Forgings Ltd. and allowed the claim of the assessee. This Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed.

In view of the above, the appeal of revenue stands dismissed.