- (1.) THIS appeal has been admitted in terms of the following questions : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that Circular No. 648, dt. 30th March, 1993, issued by the CBDT would be applicable in the case of the appellant for the relevant asst. yr. 1989-90 irrespective of the fact that circular was not in existence when the return was filed on 29th Jan., 1991 ?" "Whether ceiling laid down by the Circular No. 648, dt. 30th March, 1993, for the purpose of allowability of expenses from LIC commission would be applicable, if the income earned by the appellant is more than Rs. 60,000 from LIC commission ?"
(2.) THE appellant is LIC agent and existing assessee since 1974-75 with the IT Department. THE appellant filed its income-tax return on 29th Jan., 1991, for the asst. yr. 1989-90 declaring an income for tax at Rs. 45,870. THE appellant also received an income of Rs. 1,73,715 from LIC as commission during this year and claimed rebate of 50 per cent on this commission income to the tune of Rs. 87,813. THE case was selected for scrutiny by the Department and notice under s. 143 (2) was issued. In response to the notice and as required by the AO, necessary details required were filed and placed on record, which were discussed and expenses on commission was allowed only Rs. 30,000 taking Rs. 60,000 for allowances under the circular. In appeal, CIT(A) has taken the view that assessee is entitled to claim 50 per cent deduction on the entire commission i.e., Rs. 1,73,715. In appeal before the Tribunal, Tribunal has placed reliance on the Circular No. 648, dt. 30th March, 1993, according to that the ceiling for allowing the expenses on commission income from the LIC is 20,000. THErefore, he directed that assessee is entitled for deduction only for Rs. 20,000. Mr. Kasliwal, learned counsel for the appellant, submits that as in the case of this very assessee, assessment year is 1989-90, therefore, circular dt. 30th March, 1993, has wrongly been applied and that is applicable from the asst. yrs. 1993-94 onwards. He further submits that in the year under consideration, though the circular issued in 1984 is relevant, but as the commission income of the assessee exceeds Rs. 60,000, therefore, even that circular has also no application, therefore, his commission income should be assessed in view of the provisions of the IT Act, 1961. Ms. Parinitoo Jain, learned counsel for the respondents, has not controverted this fact that the circular dt. 30th March, 1993, has no application in the year 1989-90. Considering the submissions and the fact that circular dt. 30th March, 1993, has application only from 1993-94 and subsequent years, the Tribunal has committed error in applying this circular. The relevant circular is asst. yr. 1989-90 is the circular issued on 6th Jan., 1984. The circular of 1984 provides that if the commission income from the LIC is less than Rs. 60,000, the expenditure may be allowed 50 per cent on that commission income. As in the case in hand, commission income is Rs. 1,73,715, therefore, the circular of 1984 also has no application as how the commission income from the LIC should be assessed. When the circular of 1984, as well as the circular of 1993 has no application, in that case the commission income should be assessed and taxed in the hands of the assessee in accordance with the provisions of the IT Act. Learned counsel for the assessee submits that all the required details for taxing the income were submitted before the AO. But, Ms. Parinitoo Jain submits that assessee has not maintained the books of accounts nor the required details were furnished.
(3.) IN appeal, we cannot go into the question as what details are furnished and what details are not furnished. But in the assessment order itself, in the opening para, the AO has mentioned that in compliance of the notice under s. 143(2) of the Act, necessary details, as asked for, have been filed and placed on record. We are not concerned at this stage, as what was the expenditure, that is a question of fact. In the interest of justice, we remit the matter back to the AO with a direction that tax the commission income of the assessee in accordance with the provisions of law and material available on record. If the expenditure is genuine, to that extent that expenditure should be allowed. The appeal stands disposed of with the above directions.;