2001 (1) TMI 49

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....AYAT C. J.-At the instance of the Revenue, the following questions have been referred for the opinion of this court under section 256(2) of the Income-tax Act, 1961 (in short the "Act"), by the Income-tax Appellate Tribunal (in short, the "Tribunal") : "Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the income of Rs. 4,000 per month ea....

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.... of the other company ?" The questions are common to the two cases which relate to the assessment years 1971-72 and 1972-73. The factual position in both the cases is as follows : The assessee a private limited company was incorporated on September 16, 1961, and was engaged in the business of construction of multistoreyed flats. In the first year ended on November 30, 1970, the assessee e....

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....f Atma Ram Construction (P.) Ltd. The payments were disallowed on the ground that the expenditure was not incurred for the purpose of the assessee's business. The assessee carried the matter in appeal before the Appellate Assistant Commissioner (in short, "the AAC") who upheld the conclusion of the Assessing Officer. In further appeal, the Tribunal held that a sum of Rs. 2,000 per month was to be ....

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....d therefore, the finding of the Tribunal cannot be maintained. There is no appearance on behalf of the respondent. Though essentially the conclusions of the Tribunal are factual, we find that there are certain contradictory observations made by the Tribunal. At one place in its order, it observed that no service was rendered by the assessee to the other company and therefore the amount in quest....