TaxTMI 
TaxTMI 
1997 (5) TMI 46
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....out any services rendered by the agent, Agro India ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the view of the Assessing Officer that the agreement was sham and only a device to reduce the income of the family by applying to the other members of the family ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in ignoring the existence of Agro India, the commission agent, which has been duly constituted as a registered firm and assessed to taxes by the Assessing Officer comprising incomes from commission during the relevant assessment year ? " The question that arises in this reference is whether the assessee is entitled to the ....
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.... in the line. He also noted that the agreement was made on a stamp paper of Rs. 7 which was purchased on April 5, 1979, though the agreement was purported to have been drawn up and executed on April 1, 1979. He, therefore, concluded that the agreement was bogus and false. He also found that the areas covered continued to be the same even after the introduction of the agent, i.e., Agro India. He noted that the agreement made was simply a device to reduce the income of the assessee by applying the same to other members of the family of the partners, who, in fact, did not render services to the assessee. He disallowed the claim. The assessee took up the matter before the Commissioner of Income-tax (Appeals) who heard both the sides. He cons....
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....fficer remains undislodged by the Commissioner of Income-tax (Appeals). The Appellate Tribunal noted that the Assessing Officer mentioned that no new territory was covered with the help of the representative of Agro India and that this finding was not dislodged by the Commissioner of Income-tax (Appeals). The Appellate Tribunal found no material or reason on the basis of which the Commissioner of Income-tax (Appeals) has made the observation that the date, i.e., April 1, 1979, mentioned in the deed of agreement to have been misplaced. The Appellate Tribunal in its detailed discussion came to the conclusion that it was difficult to sustain the order of the Commissioner of Income-tax (Appeals) in the circumstances. The order of the Commiss....
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....y the Income-tax Officer as well as the Tribunal was on the ground of purported irregularity or illegality of the agreement executed on April 1, 1979. According to learned counsel, when the assessee incurred the expenditure on payment of discount to the sister concern, the assessee was entitled to the deduction under the law. In support of his contention, Mr. Joshi referred to the decision of this court in Narsingdas Surajmal Properties (P.) Ltd. v. CIT [1981] 127 ITR 221. In addition to the aforesaid decision, Mr. Joshi also referred to and relied upon the decisions in CIT v. Om Parkash Behl [1981] 132 ITR 342 (P & H) and Grace Pharma Distributors v. CIT [1988] 169 ITR 231 (AP). Dr. A. K. Saraf, learned counsel appearing on behalf of th....
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....led on the ground of perversity or illegality. In the instant case, the Income-tax Officer upon evaluation of the material facts disallowed the deduction as claimed by the assessee holding the same to be a sham transaction. The said order was set aside by the Commissioner of Income-tax (Appeals). The Tribunal in appeal considered the respective cases of the parties and upheld the conclusion of the Income-tax Officer and set aside the order of the Commissioner of Income-tax (Appeals). The appellate authority took into consideration all the relevant aspects and upheld the decision on an analysis of the factual materials. The authority tried to ascertain the real nature of the transaction from the commercial point of view in the light of the s....
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....mate business needs of the assessee. It is for the taxpayer to establish by evidence that a particular allowance is justified. The conclusion arrived at by the Assessing Officer to the effect that no services were rendered by Agro India or by the partners was not interfered with by the Commissioner of Income-tax (Appeals). In the absence of any services rendered by the agent, there cannot be any valid reason from the commercial point of view in making such payment of commission/discount. The increase in the volume of business by itself without anything more does not ipso facto lead to the conclusion that the said increase is relatable to the services rendered by Agro India. The concerned authority on an appraisal of facts reached its con....