2001 PLP 3175 (PTD)

Held, that in each year what would be the expenditure incurred for commission payment depends upon the facts arising in that year. Considering the various facts as stated in. the order,, the Tribunal had accepted the disallowance of Rs.40,000 as made by the. Commissioner of Income‑tax (Appeals) as reasonable. This conclusion was arrived at on the basis, of facts arising in the assessment year under consideration. The Tribunal's order could not be interfered with. C.V. Raj an for the Commissioner. P.P.S. Janarthana Raja for the Assessee: K.A. THANIKKACHALAM, J.‑‑‑At the instance of the Department, the Tribunal has referred the following question for the opinion of this Court under section 256(1) of the Income Tax Act, 1961: "Whether, on the facts and in the circumstances of the, case, the Tribunal was correct in holding that a disallowance of Rs.40,000 (against Rs.1,20,000 disallowed by the income‑tax offitcer) under commission payments would be sufficient" In the assessment year 1979‑80, the assessee‑company was engaged as shipping agents. For the assessment year 1979‑80, the assessee claimed commission payment of Rs.6,05,336, out of which the Income‑tax Officer disallowed 20 per cent., i.e., Rs.1,20,000, for the same reasons as for the earlier years. On the assessee's appeal, the Commissioner reduced the disallowance to Rs.40,000 referring to his predecessor's order for the assessment year 1978‑79, as also the order of the Tribunal for the earlier years. On the Department's further appeal, the Tribunal upheld the Commissioner's disallowance for the reasons given by it. Before us, learned standing counsel for the Department submitted that in the earlier years; this Court was pleased to remit back this issue for fresh consideration and, therefore, this assessment year also it should be remitted back for fresh disposal. In the order of the Tribunal, it is stated that the payments including the assessee's employees canvassed the business and commission was paid to them for the overtime, and reimbursement was made to meet the incidental expenses. In the assessment year 1975‑76, the commission paid was Rs.4,94,

530. The Income‑tax Officer disallowed a sum of Rs.4,94,530; the Commissioner of Income‑tax (Appeals) disallowed a sum of Rs.2,47,265 and the Tribunal has disallowed a sum of Rs.25,

000. In the year 1976‑77, out of Rs.5,11,741 commission paid, the Income‑tax Officer disallowed a sum of Rs.5,11,741, but the Commissioner of Income‑tax (Appeals) disallowed a sum of Rs.25,000 and the same was accepted by the Tribunal. In the assessment year 1977‑78, out of the commission payment of Rs.6,29,930, the Commissioner of Income‑tax (Appeals) disallowed a sum of Rs.35,000, which was accepted by the Tribunal. So also in the assessment year 1978‑79, out of Rs.6,49,306 commission paid, the Commissioner of Income‑tax disallowed a sum of Rs.35,000, which was accepted by the Tribunal. In the present case, for the assessment year 1979‑80 towards the commission payment of Rs.6,05,336, the Commissioner of Income‑tax (Appeals) disallowed a sum of . Rs.40,000 and the Tribunal had accepted the same. In each year what would be the expenditure incurred for commission payment depends upon the facts arising in that year. Considering the various facts as stated in the order, the Tribunal has accepted the disallowance of Rs.40,000 as made by the Commissioner of Income‑tax (Appeals) as reasonable. This conclusion was arrived at on the basis of facts arising in the assessment year under consideration. Since, no change of circumstance was shown to us to deviate from the conclusion arrived at by the Tribunal, which was based upon the order passed by the Commissioner of Income‑tax (Appeals), we do not want to interfere with the order of the Tribunal. Accordingly, we answer the question referred to us in the affirmative and against the Department. No costs. M.B.A./398/FC Order accordingly.