IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY TUESDAY, THE 11TH JANUARY 2011 / 21ST POUSHA 1932 ITA.No. 95 of 2010() -------------------- ITA.291/2008 of I.T.A.TRIBUNAL,COCHIN BENCH ................... APPELLANT/APPELLANT:- ------------------------------------ THE COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/RESPONDENT:- ----------------------------------------- SOUTH TRAVANCORE DISTILLERUES AND ALLIED PRODUCTS, VIII/193, MARUTHOOR, NEYYATTINKARA, TRIVANDRUM. ADV. SRI.T.M.SREEDHARAN FOR R SRI.V.P.NARAYANAN FOR R SMT.C.K.SHERIN FOR R THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ALONG WITH ITA.NO.168/2010, THE COURT ON 11/01/2011 DELIVERED THE FOLLOWING: C.N.Ramachandran Nair & Bhabani Prasad Ray, JJ. =========================================== I.T.A.Nos.95 & 168 of 2010 =========================================== Dated this the 11th day of January, 2011. JUDGMENT Ramachandran Nair, J. 1. The question raised is whether the Tribunal was justified in confirming the order of the first appellate authority holding that the respondent assessee is eligible for deduction of commission paid to agents for sale of liquor to Kerala State Beverages Corporation Ltd. We have heard standing counsel for the Revenue which filed the appeals and also Adv.Sri.T.M.Sreedharan counsel for the respondent assessee. 2. Standing counsel has relied on a Division Bench judgment of this Court reported in Commissioner of Income Tax v. Premier Breweries Ltd. (Ker.) [2005] 279 ITR 51 (Ker.)] wherein this Court held that the Tribunal should allow the claim only on being satisfied about the genuineness of the claim and the purpose for which commission was paid. The contention of the Revenue is that liquor distribution in the ITA95&168/10 -:2:- State is the monopoly of the sole marketing agency, which is the KSBC, a wholly owned Kerala Government company. Accordingly, there is no scope for paying any commission for the sale of liquor to a Government company. We find force in this contention because, collection of commission or incentive if any by a Government company or its employees would amount to a corrupt practice. There is prohibition against advertisements of liquor for sales promotion. Therefore, it is essentially a matter of selection of manufacturers and brands which should not involve any payment of commission because the sole purchaser in Kerala happens to be a Government company. The Tribunal allowed the appeals following the orders of earlier years, which, though was challenged in this Court was not considered on merits for the reason that the department did not press the appeals. We do not think the claim can be allowed on a regular basis merely because it was allowed in one year or for several years. If a mistake has happened, it can always be corrected in a subsequent assessment. Therefore, we feel matters require critical examination by the assessing officer. The assessee should be given full ITA95&168/10 -:3:- opportunity to give the entire details of the expenditure claimed under commission payments or if marketing expenses incurred are claimed as commission, the details thereof. We, therefore, allow the appeals by setting aside the orders of the Tribunal and that of the 1st appellate authority and remand the matter to the assessing officer to decide the matter afresh after giving opportunity to the assessee and if necessary, after calling for particulars or clarification from KSBC Ltd. C.N.Ramachandran Nair, Judge. Bhabani Prasad Ray, Judge. sl.