Case Law Details
CIt Vs. Sayaji Industries Ltd (Gujarat High Court)- There were voluminous records suggesting that the LGDA is not only the sole selling agent of the assessee, but it also does not undertake any other task except to promote the sales of the assessee company. Additionally, the assessee has larger number of customers and the LGDA supports such customers and maintains its agents and branches across the country. In view of such complex set up, between the assessee and the LGDA, we are of the opinion that the Tribunal committed no error in accepting the entire commission paid to LGDA. In fact, as already recorded, CIT(Appeals) had restricted the dis-allowance made by the Assessing Officer from Rs.1.25 crores as claimed by the assessee to Rs.7.50 lakhs. Even with respect to some handful of customers, sales might have been made directly, but it cannot be stated that the LGDA was not entitled to commission qua the sales made to such agents. LGDA was the sole selling agent and was responsible for the promotion of sales. In the process, services rendered could not have been bifurcated as rightly done by the Tribunal vis-a-vis a handful of customers as against more than 2000 customers whose requirements the LGDA would be satisfying.
HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL No. 1277 of 2010
With
TAX APPEAL No. 1278 of 2010
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