Commission paid to a foreign agent is allowable u/s 37:

AO disallowed commission paid by the assessee to a foreign agent. ITAT observed that the export sale proceeds received by the assessee were only net amount i.e. gross bill amount less agent’s commission. There was no dispute regarding the commission paid by the assessee and even the foreign buyer had stated that the commission would be distributed to agents abroad. Hence, it was held that assessee was eligible for deduction u/s 37 in respect of the said commission paid to a foreign agent. The said view was also upheld by the Hon’ble High Court.

[VISHAL JANAKKUMAR AGARWAL - TAX APPEAL NO.550 of 2011 - GHC &  SUPREME (INDIA) IMPEX LTD.  - TAX APPEAL NO.563 of 2011 - GHC]