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| The Tax Publishers2020 TaxPub(DT) 0531 (Guj-HC) INCOME TAX ACT, 1961
Section 37(1)
Where Tribunal took the view that CIT(A) ought not to have confirmed the disallowance only on the ground that only service rendered by commission agents was that of introducing the potential customers to assessee, which would not fall within the ambit of 'Service' so as to make the claim of commission eligible for deduction under section 37, therefore, appeal of Revenue was dismissed.
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Business expenditure - Addition on account of commission expense - Allowability -
Revenue filed appeal before this Court against the order of Tribunal contending that whether Appellate Tribunal had erred in law and on facts by deleting addition of Rs. 20,08,977 made on account of commission expense paid by assessee to its commission agent. Held: Tribunal took the view that CIT(A) ought not to have confirmed the disallowance only on the ground that the only service rendered by commission agents was that of introducing the potential customers to assessee, which would not fall within the ambit of 'Service' so as to make the claim of commission eligible for deduction under section 37 Tribunal held that commission paid to persons for referring the names of customers, is allowable under section 37 for the purpose of introducing potential customers to the assessee and the same would fall within the ambit of 'Service'. Therefore, appeal of Revenue was dismissed.
REFERRED : DCIT v. Vishal Engineering and Galvanizers [ITA No. 2316/Ahd/2014, ITA Nos. 2945, 3055/Ahd/2015, CO No. 271/Ahd/2014, dt. 25-6-2019] : 2019 TaxPub(DT) 7758 (Ahd-Trib)
FAVOUR : In assessee's favour
A.Y. :
IN THE GUJARAT HIGH COURT
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