AIR PAC EXPORTS Vs. ASSISTANT COMMISSIONER OF INCOME TAX
INCOME TAX APPELLATE TRIBUNAL
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(1.) THESE three appeals are filed at the instance of the assessee firm and they are directed against the orders passed by the CIT(A) -31, Mumbai.
(2.) THOUGH several grounds were raised by the assessee in the appeals filed for A.Y. 2000 -01 to 2002 -03, at the time of hearing the learned counsel for the assessee pressed only ground No. 3 in all these appeals.
In other words, the plea of the assessee is that the learned CIT(A) erred in confirming the disallowance
referable to commission paid on exports made to Iraq under "Food for Oil Programme", based on the
findings in the Volcker Committee Report.
(3.) FACTS necessary for disposal of the appeals are stated in brief. The assessee firm is engaged in the business of export of machines used in pharmaceutical industry. Though, in the short note filed before us,
it is stated that the assessee is engaged in the business for over 25 years, in the statement of facts filed
before the CIT(A) it was stated that the assessee is in the business for the last more than 10 years as
General Merchant and Exporter and the entire sales were by way of exports. It is not in dispute that the
exports were made to Iraq under the "Food for Oil Programme" run by the United Nations. For the years
under consideration it declared income earned therefrom and claimed deduction under section 80HHC of
the Act and also furnished tax audit report, etc. in support of its claim.
It is not in dispute that the contract was with the Government of Iraq and it was approved by the United Nations Security Council. The case of the assessee is that it paid commission to various parties in
connection with its export and such payments were made through agency of Reserve Bank of India, which
in turn approved for release of funds after proper verification. During the assessment proceedings as well
as in the remand proceedings the assessee claimed to have furnished the following documents: -
(a) Copies of the contract with Iraq Government for supply of medical machineries.
(b) Approval of the United Nation Security Council for the said contract.
(c) Details of sales made.
(d) Details of commission paid on export to Iraq and to other countries.
(e) Copies of the debit notes raised by the Commission Agents and the documentary evidence showing proof of remittance to the said agents as well factum of services rendered.
(f) As per the contract the commissioning and installation was to be done by the assessee, which were arranged by the Agents.
(g) Details such as names, addresses, and bank accounts of the concerns to whom the payments were made.
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