Section 254(1) which confers power upon the Tribunal to decide the appeal clearly states that after giving an opportunity of being heard to both the parties, it may “pass such an order thereon as thinks fit”. No doubt, when the Tribunal is called upon to decide an issue on merits and sufficient evidence/material is on record to decide that issue, it is supposed to render its decision on that issue. However, the Tribunal in the instant case has referred the matter back to the AO, categorically recording that there was no sufficient material placed before it to demonstrate as to what were the services rendered by the DSAs from which it could be ascertained as to how allowability to pay such brokerage had arisen and could be worked out. According to the Tribunal, a mere agreement was not sufficient for this purpose as it does not reveal on what basis the brokerage is payable and is looked into what and how the assessee would be liable to pay such brokerage. Thus, the Tribunal was justified in remitting the matter to the AO.
Issue as to Allowability of commission paid to DSA — Tribunal was justified in remitting matter to the AO as there was no sufficient material placed before it to demonstrate as to what were the services rendered by the DSAs from which it could be ascertained as to how allowability to pay such brokerage had arisen and could be worked out — as held by DelHC in Citi Financial Consumer Finance India Ltd v CIT — In favour of: Others ; ITA No. 213 of 2010
Decided on: 3 June 2011
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