Commissioner of Income Tax vs Tusker Dye Chem.

The revenue is aggrieved by an order dated 13-4-2007 passed by the Tribunal, Delhi Bench ''C in ITA No. 817/Del/2005 relevant for the assessment year 2001-02.

The revenue has raised two contentions before us. The first relates to bad debts having been written off by the assessee to the extent of Rs. 6,81,500.

Learned Counsel for the parties agreed that in view of the decision of this Court in Commissioner of Income Tax Vs. Autometers Ltd., the issue is no longer res Integra and the fact that the assessee had written off the amounts as bad debts would indicate that it was entitled to a deduction in terms of Section 36(1)(vii) of the Income Tax Act, 1961 (the Act).

The second issue relates to payment of commission to various agents of the assessee.

Before the assessing officer, the assessee had claimed that it had paid a commission to a large number of its agents for services rendered by them. The assessing officer disbelieved the expenditure incurred by the assessee in respect of 12 such agents. The view taken by the assessing officer was upheld by the Commissioner (Appeals) (Commissioner (Appeals)) but on further appeal, the Income Tax Appellate Tribunal (the Tribunal) upset the conclusion of the assessing officer as well as the Commissioner (Appeals).

The issue that has been raised is essentially a question of fact and does not raise any substantial question of law even though learned Counsel for the revenue submits that the conclusion arrived at by the Tribunal is perverse.

We find, from a reading of para 15 of the order passed by the Tribunal that in respect of these 12 agents, the assessee had furnished substantial material in the form of copies of bills on the basis of which commission was paid, confirmation letters issued by the agents, their names, addresses, Income Tax details, etc. The Tribunal has also noted that in respect of at least 9 of these 12 agents, the assessee had a continuing relationship and commission paid to them for similar services was accepted by the revenue in assessments completed u/s 143(3) of the Act for the assessment year 2003-04. In respect of some of the agents, commission paid by the assessee in respect of earlier assessment years from 1998-99 was also accepted by the revenue.

In view of the overwhelming set of facts, the Tribunal came to the conclusion that the assessing officer as well as the Commissioner (Appeal) had erred in disallowing the commission expenditure.

We may note that the Tribunal has individually dealt with the case of each agent and we do not think that it is necessary- for us to again go into each one of the cases to determine the genuineness of the expenditure incurred. The Tribunal has considered the material on record and the facts which have led it to accept the contention of the assessee that not only were the parties genuine but also the payments made to them for services rendered were genuine, though the payments were made with some delay, as per the trade practice which requires payment to be made after the sale amount has been received by the assessee.

In view of the above, in our opinion, no substantial question of law arises. Dismissed.