COMMISSIONER OF INCOME-TAX Vs. PURE PHARMA PVT LTD

JUDGEMENT

(1.) SHRI R. L. Jain, learned senior counsel with Smt. Sonali Gupta for the appellant.

(2.) HEARD on admission. This appeal under Section 260a of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), is at the instance of the Revenue against an order passed by the Income-tax Appellate Tribunal in I. T. A. No. 16/ind of 1997 for the assessment year 1993-94 decided on May 23, 2003. The appeal before the Tribunal was also at the instance of the appellant-Revenue against the appellate order passed by the Commissioner of Income-tax (Appeals ).

(3.) A few facts material for deciding the said appeal, in short, may be mentioned as under : The respondent/assessee company is engaged in manufacturing and sale of pharmaceutical formulations. During the previous financial year, the assessee had paid total commission of Rs. 13,35,336. Out of, this, a sum of Rs. 10,24,290 was paid as commission on sales made to the Government and its agencies and a sum of Rs. 3,11,046, was paid as commission to non-Government purchases. Since, a doubt was raised with regard to the payments made to various parties as commission, enquiry was held. It was found that all the payments have been made as commission to various parties by demand drafts, wherein the identity of each of the agents was also established. It has also been, found that the commission was paid exclusively for business purposes only.