ACIT, CHENNAI vs. TRACTORS AND FARM EQUIPMENTS LTD., CHENNAI

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) – 11, Chennai, dated 10.02.2015 and pertains to assessment year 2007-08.

Shri Ajit Kumar Varma, the Ld. Departmental Representative, submitted that the only issue arises for consideration is with regard to disallowance under Section 40(a)(i) of the Income-tax Act, 1961 (in short 'the Act') in respect of the commission paid to non-resident selling agents, reimbursement of expenditure to TAFE Inc, USA.

We have heard Sh. R. Vijayaraghavan, the Ld.counsel for the assessee also. According to the Ld. counsel, the issue is identical with that of assessment year 2006-07. Since the Tribunal has already remitted back the issue to the file of the Assessing Officer for the assessment year 2006-07, the Ld.counsel submitted that he has no objection in remitting back the issue to the file of the Assessing Officer for the year under consideration also.

We have considered the rival submissions on either side and perused the relevant material available on record. The only issue arises for consideration is with regard to disallowance made by the Assessing Officer under Section 40(a)(i) of the Act in respect of the commission paid to the non-resident selling agents and reimbursement of expenditure. The CIT(Appeals) simply followed his own order for the assessment year 2006-07 in the assessee's own case and allowed the claim of the assessee. When the Revenue challenged the order of the CIT(Appeals) for the assessment year 2006-07, before this Tribunal in this Tribunal by an order dated 30.09.2013, set aside the orders of the lower authorities and remitted back the matter to the file of the Assessing Officer for reconsideration. Since, admittedly, facts are identical, this Tribunal is of the considered opinion that the issue of disallowance under Section 40(a)(i) of the Act made by the Assessing Officer for the year under consideration also needs to be remitted back to the file of the Assessing Officer for reconsideration in the light of the observation made by this Tribunal for the assessment year 2006-07. Accordingly, we set aside the orders of the authorities below and the entire issue raised before this Tribunal is remitted back to the file of the Assessing Officer for reconsideration afresh in the light of the observation made by this Tribunal for the assessment year 2006-07 and thereafter decide the same in accordance with law after giving reasonable opportunity to the assessee.

In the result, appeal of the Revenue is allowed for statistical purposes.