Tribunal held that  neither the AO nor the CIT(A) disputed the fact that the assessee made payment of service tax to its distributors who had actually paid the amount of service tax to the exchequer and, thus, it was a kind of reimbursement of service tax liability of the assessee to its distributor.  It was further noted that application of new taxation of law such as GST and the issue as to whether such liability was to be borne by the distributors of the assessee-company or the assessee was not settled up to that point of time. The ITAT therefore held that CIT(A) was right in concluding that the payment made by the assessee are directly related to the business activity of the assessee and it was incurred wholly and exclusively for the purpose of business of the assessee due to commercial expediency and the same was allowable as business expenditure. Accordingly Department’s appeal was dismissed. (AY. 2012-13)