1996 (2) TMI 61

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... holding that the amount of commission paid by the assessee to Vallabh Textile and Wool Traders, Ludhiana, a proprietary concern of one of the partners of the assessee-firm, was deductible in computing the total income of the assessee and that the provisions of section 40(b) of the Income-tax Act, 1961, were not attracted ? " Briefly stated, the facts of the case are that the assessee is a registered firm carrying on the business in the name and style of "Bhatia Industries", Indore. At its head office, it had business in wholesale of cloth. It has, at its branch office, a concern for manufacturing woollen yarn out of waste. The assessee was originally assessed on the basis of regular assessment. Later, the Income-tax Officer reopened the a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rse to section 256(2) of the Act in this court. This court made the directions in M. C. C. No. 95 of 1985 (see [1988] 171 ITR 539). The Tribunal, then, referred the aforesaid question of law. We have heard Shri D. D. Vyas, learned counsel for the applicant, and Shri G. M. Chaphekar, learned senior counsel, with Shri Subhash Samvatsar, for the non-applicant-assessee. Counsel for the non-applicant submitted that the Tribunal itself has taken the same view in I. T. A. No. 860/(Ind) of 1981 for the assessment year 1976-77 filed by the assessee and in I. T. A. No. 924/(Ind) of 1982 for the assessment year 1976-77 filed by the applicant-Department and as such, the aforesaid question deserves to be answered against the Department and in favour o....